New Defender of Small Business

By Louis Sapi

Welcome to my first in a series of articles. I’m a defender of small business and writing to defend them against archaic and often times painfully foolish policies. These policies hinder the key economic engines of our society: i.e. small business and the families that own them.

I’m a Chartered Accountant, and an ardent defender of small business. I’m also known to mute diplomacy in favour of candid, hard hitting and pragmatic advice.  I call it as I see it……. much to the chagrin of my own teen children.  We will see if the editor still wants me after the first couple of articles….

Here is my passion:  To initiate a new thought process regarding how families who run small business should be both viewed and treated by society and all levels of government.  We know that general business and tax policies are used to motivate economic sectors as well as ensure that government generates enough revenues to carry out its socio-economic mandates. As an experienced Chartered Accountant, helping small business for over 25 years, I’ve gained plenty of insight into what small business really needs. I don’t accept typical regulations and laws without first asking “why” and then challenging the status quo.  It’s my view that many of these policies are misguided when applied to families who run a small business.

Here is my opinion: There is a very serious and unwise disconnect in the Government’s understanding and appreciation of small business. This disconnect manifests itself in the way certain law and tax policy is set; all too often being the same for all business irrespective of size and substance. With respect to my “disconnection premise” first let me explain who small independent business is.

In the vast majority of cases, small business is nothing more than “entrepreneurial families” or (EF’s) that have taken on the opportunities, threats and obligations that come with running a small business.  EF’s create the bulk of employment in our economy – some say up to 80%!  These are the people that Canada must nurture and embrace to support their courage and fortitude, rather than hinder with poorly thought through policies.

Here is my philosophy: We need to educate the various government bureaucracies that when dealing with EF’s they must understand they are dealing with “people” not just a “business” and that their policies need to recognize the difference between the two.  It is irrelevant that these EF’s run a business through an incorporated entity; they still deserve the same protection under the Charter of Rights as any individual and should not be expected to share the same legal burdens as large corporations. For the last 50 years, our governments have been fixated with worker rights now it’s time for EF rights!

Unlike the EF business owners, the CEO’s and presidents of big business do not have their personal homes as collateral on an operating line. They don’t have a direct and personal liability to labor laws since their companies are large enough to insulate them from personal liability. They have more flexibility through much greater resources to deal with challenges of the business. These are not subtle differences.

The challenges faced by EF’s are compounded and directly impact their families unlike big business.  Almost all laws, be it labor laws or taxation policy do not differentiate between a General Motors and a small family owned retailer or manufacturer.  Size does not matter to the governments, the legal and tax obligations thrust upon the EF’s effectively creates a significant social injustice due to the disproportionate burdens and risks placed upon them which ultimately hinders the singularly largest economic engine they represent to Canada.

Over the next few issues of this magazine, I will illustrate how EF’s are being not only taken for granted, but are also borderline abused.

Watch for my comments on –
– the foolishness of WSIB policy toward EF’s
– how income taxation policy needs to change to effectively motivate EF small business to create more wealth and employment
– the biased inequity in the way payroll taxes are structured
– the injustice and the discrimination against EF’s that our labour laws propagate

I encourage readers to write to me with their views. To reach me – LSapi@hsp-ca.com