With any business, there’s an inherent risk in the stages leading up to the companies inception. For would be entrepreneurs around the world, the risk is higher. A lot rides on the business they wish to provide, and if the playing field is not in favor of their growth, then issues arise.  As of December 2015, 97.9 percent of all business’ in Canada, were classified as a “small business” (identified as a firm with 1 to 99 paid employees). It is safe to say such firms play a large role in the Canadian economy, which as of today (October 15th 2017), is not at its strongest. (Services, S. B.)

To facilitate small business growth; “Finance Minister Bill Morneau will announce a small business tax cut on Monday, CTV News has learned. Senior government officials say the small business tax, which currently stands at 10.5%, will be lowered to 9%”. (CTVNews)

Should changes as such come through, many implications may arise.

Some of the beneficial implication that the proposed tax cuts would bring include; a stronger existing small business scene, more players in the market, and more interactions between consumers and businesses. A stronger existing business scene will come through the changes that can be brought along with paying less taxes. As a result of the smaller amount – more money can be pushed towards R&D, development, and enhancing experiences, which in turn would benefit consumer and business interactions. The smaller tax rate would allow for more players to enter the market seeking the benefits the tax cut facilitates. And with more players, more business, more jobs.

Some of the negative implications brought on by the tax cut would include; losses of government revenue, and many uncertainties. Losses of government revenue will come through the drop in tax rates in the short run, till newer players come seeing the more attainable playing field. The lack in revenue will hurt the government. Uncertainties will surround the possibilities of a lack of players entering the field upon the changes being made. It is totally possible that although a smaller tax cut exists, more players will choose to not enter the market as there may be other implications that have not yet been tended towards, i.e. strong regulations holding back budding entrepreneurs. The uncertainty will benefit no one, as it wont create jobs nor will it allow for more revenue to come through should other players not join.

Studying in a school with aspiring business professionals, I look towards a world where smaller businesses and startups are allowed to flourish with ease. However, only making superficial and particular changes may not allow for a better and more market-space. But in the end of the day, allow for more quality businesses to survive and exist.

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Sources

Services, S. B. (2016, November 17). Key Small Business Statistics – June 2016 – SME research and statistics. Retrieved October 16, 2017, from https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html

Morneau to announce small business tax cut Monday. (2017, October 15). Retrieved October 16, 2017, from http://www.ctvnews.ca/politics/morneau-to-announce-small-business-tax-cut-monday-1.3633515