ARE WE BETTING ON CANADA’S FUTURE?
In recent weeks the conversation about the Government’s proposed Tax reforms has hit fever pitch.
The combined efforts of passionate entrepreneurs, ubiquitous small business owners, hard-working farmers and beleaguered doctors has created a ripple effect. Comprehension of the long term impact of these proposals is increasing and the level of dissension, even from within the Liberal party who stunningly stay silent, is growing daily.
A petition website has secured over 100,000 signatures and continues to grow daily. If you’ve not joined the list, I’d encourage you to add your name here.
From every sector of the economy and every corner of this country, Canadians are coming to the realization that these tax reforms directly impact them.
And directly impact the potential and possibilities we are able to create for future generations of Canadians too.
As one of the entrepreneurs passionately involved from the outset, two basic perspectives have driven me.
One – I am completely aligned with PM Trudeau on his stated desire to build Canada into a beacon for the rest of the world. I believe Canada is the greatest country on the planet and I couldn’t be prouder to call myself Canadian. PM Trudeau’s ambassadorship of Canada and Canadian values on the global stage is necessary and we have a tremendous amount to be proud of.
Two – I am completely against the manner in which PM Trudeau is pushing a domestic economic agenda and legislation centered on tax reform. “Fairness” is a noble Canadian pursuit but I, and many others from across the country, are deeply concerned that this economic policy will extinguish the very entrepreneurial spirit that makes Canada such a beacon for the rest of the world – a spirit that has been so widely extolled and supported by politicians at every level of government in Canada.
My concerns can be boiled down to two simple ideas.
Simple ideas with significant implications.
Significant negative implications.
Confidence is a cornerstone of any vibrant individual, business or country.
Confidence is an energy that attracts ideas, people and investment like a magnet.
Confidence drives people to take a chance on an idea like starting their own business.
Confidence is what attracts people to join those new business ventures and build something that will grow and endure.
Confidence is what attracts investment because it builds a belief that the risk has been sufficiently reduced and that a potential return on that investment, while never guaranteed, is higher than in other ventures.
The Government’s Tax Proposals have shaken Canadian business confidence to the core and replaced it with concern.
Concern that the opportunities to build a successful new business will be crushed under a mountain of higher taxes.
Concern that small businesses will no longer be able to utilize funds to reinvest in their business or have funds ready for an unexpected emergency because those funds will be taxed as passive income.
Concern that investing in a Canadian entrepreneur or small business is no longer a prudent or advisable risk. Investment – be it from your bank, venture capital firms or government innovation funds – is always about balancing risk with reward. If the former significantly outweighs the latter, that investment stops cold.
Business confidence exponentially builds an economy. Business concern can stifle it just as quickly.
At a time when we need to be building confidence in the stability and potential of Canada’s economy globally, and when competition from other places for investment is apparent and real, the Government appears busy creating questions and concerns about the prudence and viability of investing in our country.
Building Our Innovation Future
As a long time, and long term, investor in Canada’s technology sector and the incredible homegrown talent we have, I fear the negative impact these tax proposals will have on the long-term viability of Canadian talent.
I share PM Trudeau’s enthusiasm for a Canadian Innovation agenda. For someone who owes much of his success to Canadian entrepreneurs and investors, I can think of no better an agenda for any country in 2017.
But that agenda must be about building our own Canadian technology giants, not merely importing them from America or elsewhere.
Quite simply, two things drive Innovation in today’s economy – talent and data.
Canada’s Innovation agenda seems content to let both of those scarce and precious resources be siphoned away.
For example, I genuinely wonder why our government is so actively courting Amazon’s second headquarters in Canada rather than ensuring the right economic conditions exist to build a Canadian competitor to Jeff Bezos right here.
While Amazon headquartered in Canada might be a PR boon and stimulate some job creation, let’s not forget that Amazon hasn’t an illustrious record of paying taxes – even harder as they’re an American company – and is more renowned for their robot workforce than their human one. What impact on the Retail sector jobs in Canada, or on home grown Canadian retail brands when Amazon is domiciled here?
Why are we encouraging American data giants like Google and Facebook to move North? Is Canadian data any less deserving of protection than our fresh water and our soft-wood lumber?
This isn’t about protectionism, it is about possibility and potential.
The possibility and potential of Canada.
It is about understanding that building a vibrant Canadian future requires investment and taking a long-term view. That means thinking in business cycles, not election ones.
It is about understanding how to create an environment where investment is attracted like iron filings to a magnet. That means thinking about how to grow new business entrepreneurs, not stifle them.
It is about understanding how to create an environment where confidence surges through the economy. That means thinking about how to attract new ideas, new businesses, new investors and new growth rather than merely importing them.
Like PM Trudeau I am all for Canada taking center stage in world affairs. We have the talent, we have the potential.
However that requires building Canadian business confidence and taking a long-term view.
Devastatingly, the proposed Tax Reforms do neither.
On this issue, I will not be silent.