Politicians like to cater to important sectors of voters with small business always being an area their talks praise and their promises supposedly assist.
For one thing, small and medium business owners are part of that middle class, everyone but the NDP wants to address.
A study for the Family Enterprise Xchange Foundation by the Conference Board of Canada lays out just how small to medium family-owned business impacts the Canadian economy.
The foundation believes “the future health and growth of the Canadian economy depends on a vibrant family enterprise community.
“From the corner coffee shop to the home builder and the local manufacturer, from the farmer and the fish processor to the commercial real estate developer – family enterprises are found in all sectors of the economy.”
Family-owned businesses account for 6.9 million jobs across Canada. Non-family owned enterprises generate five million jobs, compared with 3.7 million jobs in government and 2.8 million self-employed persons.
Money-wise, family-owned businesses produced 35 per cent of Canada’s gross domestic product in 2017. That $574 billion is a lot of cash generation.
Sector-wise, family business are everywhere: amounting to 80 per cent of agriculture, 75 per cent of accommodation and hospitality services, nearly 70 per cent of retailers, 65 per cent of mining and manufacturing.
They account for about 62 per cent of enterprises in all sectors.
In employment, family-owned business payrolls make up 80 per cent of agriculture and transportation/warehousing jobs, 70 per cent of accommodation and hospitality services and nearly 70 per cent of construction.
On average, this business category has 8.1 employees compared with 17 for other types of business. Annual net income is $189,000 on average compared with $383,000 for non-family-owned operations.
The mostly smaller-sized family businesses indicate why outrage was so strong when the federal government pulled back some of the tax benefits enjoyed by incorporated family-owned business.
The federal tax changes were intended to make the small businesses corporations’ practice fairer with non-incorporated business. The feds backed away from some changes.
No wonder politicians pay so much lip service to this area of voters. Not only are family businesses an essential part of the country but their employees understand the critical needs of business to keep them working.
Most business studies of this nature would conclude by recommending changes in tax policy. This study makes reference to the need for competitiveness in taxes, but no call is made for lower taxes.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
