The Federal Government has relented! I wish this was the headline we could be sharing. But no, after a week of unprecedented focused outcry that united people across the political spectrum, our federal government has decided to do the most mediocre, incremental creep thing and lower the qualifying payroll for the $40,000 interest-free small business loans down to $20,000 from $50,000. In doing so, they once and for all spat in the face of every self-employed person saying “We know who you are, and we will exterminate you.”
Am I being dramatic? Well, the better question would be, am I entitled to be this dramatic? What frustrates me most is how many people I know who are wage earners who smugly smile when I talk about the plight of small businesses. Sometimes they keep their condescending thoughts to themselves, often they share them openly. But the basic jist is summed up by the question “Why did you pay yourself dividends instead of a wage?”
The answer to this question should be that is none of your business, but such escalations rarely bridge a paradigm gap, so I always explain. “Well, when I have employees, I pay everyone a wage including myself, when I have no employees, why bother with all of that filing and paperwork?” It is not the answer they anticipate….their prejudice and assumption is that us self-employed are avoiding paying taxes. If I have the time I rebut with the following list of taxes they as wage earners do not generate or pay: GST, Logging tax, Stumpage, Corporate profit taxes, Provincial taxes and PST. Then there are the payroll taxes on your employees themselves which are factually generated by the company they work for, not themselves. Now let us talk about CPP and EI contributions. Then down the chain there is another round of GST on the next round of goods. And if these goods or services get exported, all kinds of duties and taxes to be collected there as well.
But because my small company just happened to have significantly more payroll than $50,000 in 2017 and 2018, then, due to market forces, no payroll in 2019, suddenly I am cast by our government and certain smug wage earners as some sort of a free loader who is not worth helping through this crisis.
In reality, I personally will probably make it through this, but many if not most of my self-employed small business clients and sub-contractors will not. What makes this insistence by our Federal Government to blatantly pick winners and losers so evil is that unlike a tornado, or a flood, this shut down has been arbitrated by the very government who is now picking the winners and the losers. If a government asks the players of an economy to shut down for the public good, this is fine, but when this government then promises help, how in a democracy is it remotely legal to pick and choose who gets this help?
Often times my wage-earning friends ask me why I have such a confrontational view towards governments. They are especially puzzled when they can not see a partisan bias attached to this confrontation. It is hard to explain what it is like to be a small self-employed businessman, but lets put it this way. The relationship between businesses and the government is the same as the relationship between renters and landlords. Both need each other, but one party has all of the power over the other. Only a few laws preventing overreach of the powerful protects the weaker party. So I have to sit all day listening to wage earners complain about bosses and landlords, but I am not allowed to push back against my rent collector? Is it a privilege to be allowed to participate in the economy of Canada? Or is it a right to conduct legal business as you please? If I was breaking no laws before the crisis, how is it legal for my government to give my competitors free money, but deny it to my business?
So again, is doing business a right or a privilege? It is both. Just as being a tenant is both a right and a privilege. It is sad because it does not have to be this way. The amount of public good will and compliance that has been shown by people around the world is frankly astounding. How sad that our federal government has decided to use this opportunity to score a few cheap political points against a category of business that they were already taking glee in antagonizing before this crisis. Canadians should speak up. Everybody deserves a helping hand or nobody deserves a helping hand. In a democracy, no government has the right to use a crisis as an opportunity to pick winners and losers. There is such as thing as tax avoidance. Some businesses launder money or claim illegitimate write offs, although this happens far, far, far less often as people who are not in business think. And some wage earners plan on going on EI every winter then lieing about leaving the country to go sit on a beach somewhere cheap and warm. How about I will agree to help you if you agree to help me? And if we all demand this from our government, we can all continue to get through this crisis with good will and cooperation.