Canada’s entrepreneurs: optimism in tough times

Though Canada’s economy right now is challenging, to say the least, a recent study says small business owners are feeling good about their own situations, as the nation looks for paths to a more prosperous future. Why? Read on!

 

No shortage of bad news

There’s been no dearth of downers in Canada’s economy: When Finance Minister Bill Morneau revealed his forecast the last week in February, he said Canada will likely run a deficit of 18.4 billion Canadian dollars in fiscal 2016-2017. That’s about a percent of Canada’s GDP. And that was before the March 22nd release of any new spending measures in Prime Minister Justin Trudeau’s new budget. NASDAQ quoted some economists as expecting stimulus measures in that budget which could push the deficit to roughly C$30 billion. That would make it the biggest budget shortfall since 2011. With the benchmark price of crude oil (Canada’s biggest export) bouncing along below $40 a barrel, and with Western Canada Select frequently under $25, half the respondents to the CPA Canada Business Monitor survey were pessimistic about how the national economy will perform over the next year, as reported by Canada One.

 

Stubborn optimism

And yet, in the face of the gloom, small business owners in Canada say they feel good about their situations. In an article in the Huffington Post Blog, Intuit Canada President and CEO Jeff Cates outlines the findings of the company’s new survey of Canadian entrepreneurs. It shows “Four in five small business owners said they now have greater life satisfaction than they did before, and 65 percent actually feel less stressed than when they worked for someone else.” This despite the fact that over 2/3rds of them work more than 50 hours a week, as reported in a TechVibes story on the same survey.

 

Cash flow and growth vs. flexibility and independence

On the Huffpo blog, Intuit’s Cates notes that the big stressors for Canadian entrepreneurs are cash flow (32%) and growth (21% - with 51% of millennial owners worrying about that!) The pros that outweigh those worries mostly speak to a sense of control, including flexibility, independence, and happiness.

 

In the midst of challenges – confidence

That sense of control may be contributing to something Bloomberg noted on March 14th, citing a different survey: The Bloomberg Nanos Consumer Confidence Index rose to 54 – its highest level since late December. Feeding the optimism may be comments from the finance minister that NASDAQ quoted: He suggested that a significant amount of fiscal stimulus “is the right way to go.” Bloomberg noted that the confidence index is still below the 12 month average of 55 and speculates that Canadians may be waiting to see if the stimulus “…will have the promised effect of creating growth.” Robert Lawrie of Bloomberg Economics added that “While expectations are moving higher, households appear to be waiting for a clear sign that policymakers can provide a quick response to further labour-market displacements.” Certainly many of Canada’s small business owners will be looking for ways they can participate in any stimulus projects that result.

 

Good times or bad, no business can afford to leave money on the table – Concur helps you recover every penny of Input Tax Credit or Input Tax Refund you’ve got coming under Canada’s GST, HST and QST rules. Check out our guide to Canadian taxes and expense reporting, prepared in co-operation with Ryan Canada. Or learn more at Concur.ca.

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