Alberta’s small and medium businesses are laboring under a cloud of uncertainty right now, and 2017 doesn’t seem to offer any promise of relief. That’s the bleak but blunt message a guest speaker from the Alberta Chambers of Commerce had in Wetaskiwin Mar. 9.
Ken Kobly, president and CEO of the ACC, spoke at the regular luncheon meeting of the Wetaskiwin Regional Chamber of Commerce held at the Best Western hotel. The ACC represents 126 chambers across the province, and Kobly, who said in his 13 years with the ACC has worked with six different premiers, reminded the members the ACC lobbies the provincial and federal governments on their behalf.
Kobly said the ACC has had some wins lately, and some losses.
When it comes to wins, tax credit programs, pipeline approvals and a cut in the small business tax rate were all clear cut. Kobly noted though that the small business tax rate might not be so clear-cut. He said the tax cut was one per cent which, in the long run, doesn’t make a huge difference.
He said a major victory was the federal government dropping what some suspected was an idea to start taxing benefit plans.
Some losses the ACC coped with over the past year is an increase in the general tax rate, plus the increase to minimum wage which Kobly said was a major hit to businesses. A recent ACC survey of Alberta businesses, prior to the hike, had 1,600 respondents and many noted such a minimum wage hike would result in cutting of worker hours, staff reduction and hiring of fewer students.
Kobly stated a subsequent survey showed that Alberta business owners followed through on what they said they were going to do, and Stats Can’s numbers prove that. Full-time jobs are being converted to part-time jobs and 49 per cent of the survey respondents stated layoffs have resulted from the minimum wage hike. He also stated that all the surveys are available on the ACC website, www.abchamber.ca.
Kobly pointed out that as minimum wage increases, other benefits that working people might have enjoyed, such as GST rebate, disappear. In fact, it appears the largest beneficiary of minimum wage hikes is the federal government, as sees lower costs and more tax revenue.
The president and CEO said the ACC would like to see an approach for increasing minimum wage that includes all facets of society making sacrifices, not just business.
Another loss for Alberta businesses was the arrival Jan. 1 of the carbon levy he stated. Kobly said in many cases, the cost of goods and services has gone up from a tax that is rather stealthy in its manner. “In my opinion it’s a hidden sales tax,” said Kobly.
The carbon levy isn’t visible at the gas pumps he noted. He pointed out one of the only places you’ll see the carbon levy pop its head up is on your home gas bill. Kobly said the ACC would actually like to talk to a business owner who uses a lot of natural gas to find out more about the levy’s effect.
Kobly stated the many losses the ACC has seen are bad enough individually, but combined, it creates for a very challenging environment in Alberta for small and medium size businesses to prosper.
“When you start laying those costs on top of each other, that’s when you get the situation you find in Alberta today,” he said.
He said lots of small and medium sized Alberta businesses are struggling right now and some are barely hanging on and that’s why the ACC is advising Alberta’s NDP government to be careful about bringing in more financial burden on small and medium sized Alberta businesses.
He did note that although Alberta saw a small revenue increase in some areas, that was wiped out by very large new spending.
More bad news includes a rumor that the government is going to increase the capital gains tax from 50 per cent to 66 per cent or more.
As well, Kobly said the business community is very concerned about the upcoming session of the provincial legislature and some of the business items, such as legislation that would take small businesses with five employees off of the small business tax rate.
Other upcoming items include changes to the WCB which could impact small business, the farm and ranch workers bill, and labour law changes that would ban replacement workers during a strike or lockout among others.
During a question and answer session Kobly discussed issues like import/export, deficit, youth pay, foreign workers, business mentoring, capital gains tax and the business climate in Alberta.
Kobly also extended congratulations to the Wetaskiwin Regional Chamber of Commerce for reforming and reorganizing in 2016. He also said he was very impressed by the Wetaskiwin Chamber’s agreement with the Leduc Chamber for management services. Kobly said he’s never seen such an agreement in Alberta before.
Watch Kobly speak at Black Press TV: http://blackpress.tv/video.php?id=21114