The end of HST
While British Columbia's vote to extinguish HST may bring " a slight benefit to consumers," the effect it will have on on small businesses is harder to calculate.
When it was first enacted, many SMBs viewed HST as a new cost burden since items such as commercial rent, raw materials and goods purchased for resale were now subject to sales tax, according to a report by HSTinBC's Independent Panel.
Restaurants felt particularly slammed when suddenly they were forced to charge customers the full 12 per cent, rather than just the 5 per cent GST. Not surprisingly, many reported signficant declines in customer sales when HST came into effect July 1, 2010. But it wasn't just the food and drink industry that suffered. Fitness clubs, flower shops and taxi services operating in B.C. also voiced concerns about the added 7 per cent sales tax, many signing the Fight HST petition to voice their disapproval.
But despite its faults, the HST system brings significant long-term benefits to SMBs, according to the study. Removing PST from the cost of production not only makes it cheaper to produce goods and services in the province, but it inevitably helps boost sales and exports. And since they only have to deal with only one sales tax (vs. PST and GST), administrative costs are lower, which is especially beneficial to smaller firms without the same administrative resources as larger operations.
But when the referendum results rolled in on Friday, August 26, B.C. voters made their opinion loud and clear, with about 54.73 per cent voting to scrap the tax and 45.27 per cent voting to keep it.
Was enacting the HST system in B.C. really such a terrible idea? After all, economists have touted the system for making businesses more competitive by cutting red tape and eliminating goods from being taxed multiple times at different stages of production. Or was its true demise simply a result of poor leadership and broken promises, as Report on Small Business columnist Tony Wilson argues in his latest piece?
Dreamers get rude awakening
What hard working lawyer, investment banker or doctor hasn't dreamed of leaving the rat race to start up their own bakery, bike shop or bed and breakfast? Trouble is, Plan B can come with unexpected consequences - including longer hours, grueling work and of course, less financial security. In this article from the New York Times, white collar workers turned-chocolatiers, organic farmers, and dog jewellery designers share their horror stories, reminding us that the grass isn't always greener on the other side.
Old factories get a second life
On the hunt for commercial space but not sure where to start? The Wall Street Journal reports on the trend of high-tech companies opening shop in previously abandoned manufacturing facilities and revitalizing economically drained cities in the process.
EVENTS AND KEY DATES
The shortest path to making money in mobile
Ryerson's Digital Media Zone is hosting an event in Toronto on Thursday, September 1, 2011, 7:00 PM. For this session, the group will discuss niche markets, industry verticals and consumer segments that are paying for mobile technology today.
Who's the ultimate?
The finalists for Entrepreneur Magazine's annual 'Entrepreneur of 2011' awards are in. Click here to cast your vote.
EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS
Waterfront and transit 'critical' to Hamilton's future
In Part 2 of our video series on Hamilton, Nick Bontis, associate professor of strategy at McMaster University's DeGroote School of Business, explains why waterfront revilatization and transportation infrastructure are the keys to its economic future. Watch the first part here.
FROM THE ROSB ARCHIVES
There must be 50 reasons to leave your partner
There's only one way to split up without heartache, according to this article about Toronto's Le Papillon restaurant from Your Business magazine
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