Category Archives: Small Business

Fall Back Up with Tareq Hadhad

On this episode I’m delighted to sit down with former Syrian refugee, medical student, entrepreneur, and Peace By Chocolate founder Tareq Hadhad.

In the election of 2015, then candidate for Prime Minister, Justin Trudeau, pledged if his party won the election, his new Liberal government would begin effort to bring 25,000 Syrians displaced by the war to resettle in Canada.

Among the families selected were the Hadhads.

Tareq had been studying medicine when hostilities broke out in Syria and his father was running a well establish chocolate manufacturing business in Damascus.

After essentially losing everything they owned in ground fighting and airstrikes, the family fled to Lebanon and eventually were selected to come to Canada as part of the Syrian refugee program. They were sponsored by a community group in Antigonish.

peace by chocolate signTheirs is a success story by almost every measure. In fact, their hard work, investment, crowd funding project, and community support means has resulted in the construction of a full scale chocolate factory in Antigonish.

Their story was celebrated by the Prime Minister as an example of success in a speech to the UN Refugee Summit…

There are a great many aspects of the Syrian conflict that might be explored, however on this occasion I simply wanted to meet with Tareq to get a sense of his family’s experience and the resettlement process in Atlantic Canada.

I met him in the back of the original tiny chocolate making facility on the side of the road next to their modest family home. We sat down on a couple of squeaky chairs for a chat…

To listen to the podcast click here

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Alcohol taxes are going up, that is certain

Tucked away in a remote corner of the Budget Implementation Act (BIA) was a surprising new tax on alcohol. As Canadians, we’ve come to accept our sin taxes as dutiful penance for universal health care, and probably rightly so. If we are going to drink or smoke ourselves into a critical care unit, there’s general agreement there should be some upfront payment into the healthcare system through the purchase of those things with which we are slowly doing ourselves in.

However, a recent new measure to raise taxes on alcohol raised eyebrows across party lines and in the Senate. Finance Minister Bill Morneau’s budget bill included a 2 percent increase in the excise duty applied to the cost of wine, beer, and spirits. That may not seem like a big deal, but here’s the kicker, it will automatically increase every year based on the rate of inflation, starting in 2018. Forever.

The government says the cost will be minimal, only a penny on a litre of wine, seven cents for a 750-millilitre bottle of hooch, and five cents more for a 24 of beer. But, that’s just the start, the Senators also noticed when provincial markups and HST are applied on top of the excise duty, the price of beer will actually increase by roughly 12 cents, with the added benefit of never-ending, guaranteed, built-in hikes. All this without any need for the finance minister to bother going back to Parliament.

When this bill hit the Upper Chamber, many Senators thought this was a terrible idea. At a time when many independent breweries and distilleries are trying to build a base, the federal government imposing a never-ending tax hike on their product seems, well, a little counterintuitive. Add to this the fact the Department of Finance admitted it didn’t do any analysis of the impact of the escalator and you have some rather poorly received legislation.

In addition, for some reason, nobody in the Department of Finance felt the need to talk to Spirits Canada, Beer Canada, the Canadian Vintners Association or any other group whose member’s livelihoods depends, at least tangentially, on the cost of liquor. Speaking to stakeholders might have been a reasonable place to start.

Supporters are saying it provides ‘certainty’ around increases. This, however, is not a particularly convincing argument especially given there is no economic analysis, no industry input, no market condition forecasts, and all other industrial factors are essentially ignored. The only thing ‘certain’ is taxes are going up.

Some of the ‘independent’ Senators put up a short lived fight, threatening to split this piece out of the legislation, however pushback from the government shutdown the resistance and with the majority of the Upper Chamber, the Liberal appointees passed it without amendment. The job now is convincing the government of the error of its ways, which is never an easy task. Rolling back Finance Department edicts takes powerful lobbying or changes in governments.

Small business has much at stake. Excise taxes are paid by manufacturers and while there’s been some speculation about how the tax increase will affect consumer prices, it is still unclear how manufacturers will be passing these costs along or how retailers will respond. What is clear is hospitality firms and consumers can look forward to an ever-increasing cost of alcohol, without the benefit of parliamentary oversight…that is certain.

Let’s Start Clearing the Smoke on Cannabis

In another 12 months, we’ll be dealing with the real world impact of the federal government’s legalization of marijuana. There are still lots of unanswered questions about how this will roll out. These are questions with huge economic and social implications.

While the Canadian Federation of Independent Business (CFIB) has conducted only one survey of its members so far on how recreational marijuana should be sold, comments from our members suggest there are still considerable divisions on whether legalizing marijuana is even a good idea.

While we have limited experience with cannabis per se, CFIB is a respected international leader on regulation, including how to get it right and what not to do. This includes considerable experience with liquor and tobacco regulation. The federal government has handed responsibility over to the provinces who will need to apply a laser focus on these key critical regulatory pieces.

Too often, governments examine a new area where regulation is needed and quickly expand the mandate to include every moving part. This automatically means proper enforcement is near impossible. We recommend focusing on a few critical regulatory priorities, such as preventing sales to minors, ensuring proper product safety information and rules, and prohibitions at work or while driving. Choose the most important aspects to regulate and then do them well. Leave the rest alone.

We also hope to see the same rules across the country. The provinces should be working together to ensure as much consistency as possible as legalization rolls out across the country.  As the new Canadian Free Trade Agreement works to undo the damage of multiple complicated regulatory schemes, the last thing we need is another patchwork quilt of rules in an emerging industry.

Additionally, while bringing recreational cannabis sales out of the underground economy will no doubt have positive revenue implications for the government (excise, sales, and corporate income taxes), there will be added costs for policing and health care. Government would be wise to resist the temptation to frame this as a giant cash cow.

That means getting the tax mix right. If taxes are excessive, particularly in early days, much of it will remain black market. High tax rates may discourage users, but they’ll also push sales into the underground economy. It is estimated that close to a third of tobacco sales are underground, often with links to organized crime.

Also, provinces would be wise not to let regulation get in the way of innovation. An above-ground private sector can stay much closer to customer preferences, the edibles market is a good example. It’s also a myth that only public sector employees can responsibly handle controlled substances. The private sector has held an important role in tobacco and pharmaceutical sales, as well as alcohol in some provinces.

CFIB is also recommending a central role for smaller, independent businesses within this emerging industry. We are already advocating for access to banking and payments services for smaller, independent businesses involved in legal cannabis retail and distribution as a measure to help achieve the goal of limiting the underground economy.

Even those who are involved in the emerging industry appear to remain unsure of where this is all going. A year out from implementation, we should be seeing some of the smoke begin to clear.

Jordi Morgan is Vice President, Atlantic of the Canadian Federation of Independent Business. CFIB represents the interests of 11,000 small and medium size businesses in Atlantic Canada.

The New Phone Book is Here!

For people of my vintage, Steve Martin turned comedy on its ear. I was reminded this week of one of Martin’s best film moments from The Jerk when the new phone book arrives.

Earlier this week the new Halifax Index was released from the Halifax Partnership. Yay. For most, it might seem a little dry, but for people in the public policy world, it’s darn near exciting. Even for those not wonky enough to be enraptured with economic and demographic data, it tells a compelling story.

While there’s much to be pleased about living here in Nova Scotia (especially during warm, sunny weeks like this one past), there are also some sobering numbers provided in this year’s Index. The document is basically a diagnosis of our social and economic health. HP’s Chief Economist, Ian Munro does his best to avoid painting too gloomy a picture, but when you dig into the numbers, neither real growth nor public perceptions are anything to pop champagne corks about. Essentially, he says, we’ve got some good news and we’ve got some…well, work to do.

MQO2On the good news front, the population is increasing and apparently business optimism is up in spite of the fact underlying decision making around investment and innovation would suggest otherwise. The number of jobs inched up and the commercial property tax base has grown, City Hall’s fiscal picture shows very modest spending increases and the municipal debt is being slowly, but steadily chipped away.

There are, however, many challenges. While the population is growing, a considerable portion of that is the result of rural Nova Scotia shrinking and an increase in international students. While this growth is a good sign, longer term trends are not yet established and historically our retention rates are dreadful. It should be noted there is some cause for optimism with the establishment of the Atlantic Immigration Pilot Project, which sets aggressive goals for attracting and retaining new Canadian to the region, but it has only just started and we need to be careful not to prematurely declare victory and set unrealistic forecasts based on very short term results.

MQO’s City Matters survey, released as part of the Halifax Index, did not paint a very pretty picture either. The survey asked people to rate Halifax as a desirable place to live. While it was characterized as mostly flat-lining, the numbers were either unchanged or showed declining opinions on a variety of metrics including; being a good place to raise a family, indoor and outdoor recreation, housing affordability, arts and culture, ease of getting around, and other quality of life indicators.

Construction activity and other major projects including Irving’s ship building and the re-decking of the Macdonald Bridge bumped to GDP growth to 2.2 percent which may explain the sense of optimism, but Halifax continues to dwell in the bottom tier of benchmark Canadian cities, and GDP only hit 0.3 percent per capita.

There’s a great deal more useful analysis in the Index and Ian Munro and his team at the Partnership deserve credit for providing a very useful document to spur discussion around the challenges facing economic growth and social satisfaction measures. While the partnership also sets targets for improvement, it’s up to the business community to put forward clear policy recommendations to assist decision makers.

The Halifax Index 2017 is a very useful tool as it serves as a warning that we cannot be complacent about advancing ideas around economic growth. We have a huge job ahead of us to make Nova Scotia a more business-friendly, competitive environment. Our tax and regulatory burden remain foundation problems and with the demographic trends outlined by this index and many other studies, policymakers need to get serious about establishing long-term forecasting mechanisms to get a clearer picture of the heap of trouble awaiting us 20 years down the road. While I was excited to see its release, given the results in the Halifax Index, I think I may have been a little happier getting the phone book.

Fall Back Up with Holly Carr and Allan Bateman

Today on Fall Back Up, I’m delighted to welcome Nova Scotia artists Allan Bateman and Holly Carr

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Holly Carr is nationally renowned for her colourful and whimsical silk painting and public installations.  She not only exhibits her work throughout Canada and designed for theatre, more recently

Holly has branched out into performance art, painting in real time with musicians and performers. This includes performances with world-renowned violinist Min Lee in Singapore, The National Art Center Orchestra in Ottawa, the Winnipeg Symphony Orchestra as well as her own production with Symphony Nova Scotia. She gives her time and art generously for fundraisers.

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Her life partner is Alan Bateman who is establishing himself as one of Canada’s finest realists.

Allan comes from a rich art background. His father is an internationally known wildlife artist Robert Bateman and his mother, Suzanne Lewis is a superb watercolourist.

Alan is a two-time recipient of The Elizabeth Greenshields Award. He has exhibited extensively throughout Canada, including shows in Toronto, Halifax, Hamilton, Edmonton and Victoria and several locations throughout the USA. Recently he finished a commissioned portrait of the outgoing president of the University of King’s College, Dr. George Cooper.

Both Holly and Allan received formal training at the Nova Scotia College of Art and Design in the mid-1980’s. I sat down with them in the dining room of their farmhouse just outside Canning Nova Scotia where they live, paint and manage their own gallery. Our conversation covered a broad range of topics from being artists as a business, to the controversial idea of un-schooling children and the role of art in education…

Why Small Business is Concerned About the 15 Dollar Minimum Wage

Atlantic Canadian small business owners should start bracing themselves for the 15 dollar minimum wage campaign. The governments in Alberta and Ontario have both bought into the idea, and now British Columbia’s new ‘GreeNDP’ coalition is putting it on the table. It’s being driven principally by Canada’s largest labour unions and a coalition of the federal and provincial NDP and social activists.

Let’s be clear, the Canadian Federation of Independent Business (CFIB) is responsible for advancing the interests of our members, small- and medium-sized, independent businesses. Firms ranging in size from your mom and pop shop to companies with up to 500 employees. CFIB has led awareness on this 15 dollar minimum wage issue because these are the businesses who will suffer, shrink or die with such a sudden spike in labour costs.

Because of their size, the Loblaws, Walmart and Shoppers Drug Marts of the world will be much better positioned to absorb this shock, but make no mistake, they will also be shedding staff, cutting hours and eliminating opportunities for young, entry-level workers, who make up the vast majority of those who are earning a minimum wage.

Most CFIB members already pay well above minimum wage for employees as most small businesses understand the importance of valuing and retaining staff. CFIB certainly has no argument with improving pay and benefits for employees when appropriate and our members support these efforts.

Our argument is with a government mandated spike in the wage floor which will put the sustainability of small business in peril. Remember, this is not just about entry level workers, a 32 per cent increase in the wage floor will put enormous pressure on employers to increase the wages of all staff.

Armine Yalnizyan, a principal advocate for the 15 dollar minimum wage and an author of the Canadian Centre for Policy Alternatives’ (CCPA) Inequality Project, clearly stated this week, “Yes there will be a reduction in some hours, some jobs, some businesses. No argument there. And most vulnerable workers (teenagers and newcomers) will bite the bullet first, particularly when there’s a downturn in demand.”

Her comments are remarkable unto themselves, but I would also ask, what is the acceptable casualty rate? How many hours should be cut and how many young workers should lose their first jobs? How many businesses are they prepared to sacrifice to hit this arbitrary target?

And where will this new money for wages come from? Will it come from increased profitability? That seems unlikely in light of increased labour costs. Will it come from stronger employment? That’s not happening as, it seems everyone agrees, these higher wages will inevitably lead to reduced hours and/or job losses. Will minimum wage workers suddenly become 32 per cent more productive? Unlikely.

Finally, our region’s economy is far more fragile than Alberta, Ontario or BC. If there are politicians musing about this here, we would ask they understand the repercussions of this kind of wage spike before we even think about such a move in Atlantic Canada. We’ll have the opportunity to watch how this experiment plays out in those other province’s economies first. Fortunate for us, not so much for them.

This originally appeared in the Chronicle Herald, June 9, 2017

Fall Back Up

In 1997 Brian Titus was in the navy working as a diver in Halifax…but he had a passion for making beer. At the time, the craft brew market hadn’t washed up on the east coast and he saw an opportunity.

Over the last 20 years, Garrison, along with Halifax’s other well established brand Propeller, settled as two of Nova Scotia’s best known craft beer operations.

However, in the last few years, the craft brewing industry has exploded around the world and other new Nova Scotia brands and brewery operations seemingly come on stream every month.

BRIAN-HS-2For Brian Titus, it’s been a pretty amazing ride and Garrison continues to grow, trying to compete with new entries into the market and a shifting landscape.

I dropped into Garrison Breweries at their headquarters located in a part of Halifax’s original immigration annex on the waterfront, next door to the Seaport Market. Brian and I grabbed a Spruce beer and settled in for a conversation as a couple of folks nearby worked on a collaborative brew…

What the parties are saying about small business in the Nova Scotia election

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As an advocate for small business, job one is getting issues in front of politicians. Prior to this election, the Canadian Federation of Independent Business (CFIB) presented each of the parties in the Nova Scotia election a small business “platform’ outlining key areas our 5,200 members in Nova Scotia have identified as priorities.

We sent out a survey to the leaders and they responded. While it wouldn’t be appropriate for CFIB to endorse any of the party’s positions during a campaign, it seems clear each of them understand the importance small- and medium-size business plays in the economy. It’s also clear their approaches differ, sometimes dramatically.

The areas we focused on in the creation of the platform were tax relief, regulatory reform (or “red tape” reduction), spending restraint and support for SME innovation activities to increase productivity and competitiveness.

You can find our platform here, the survey for the leaders here and the responses we received on these issues from the parties, by clicking on their logos.

Atlantica  Green Party of NS nslplogo NDP  Progressive_Conservative_Party_of_Nova_Scotia_2016

If you operate a business in Nova Scotia and are still considering your vote in this final weekend, it might be worthwhile to have a quick look at these documents. You can glean from them the importance each of the parties place on the issues we presented.

CFIB establishes its advocacy agenda based on responses to the many surveys we do of our membership to ensure we are focusing on the priorities that are important to small business. It’s our hope that any government elected on Tuesday, will do the same.

The future of our region depends on the prosperity of our small- and medium-sized businesses. We are not only the engine that drives the economy but are also the first to be impacted by bad government policy. I would encourage you to take few moments and have a look at where each of these parties intends to focus should they be given the opportunity to govern.

Winter is Coming

Game of Thrones

Nova Scotia’s electoral Game of Thrones is in full swing and while it may lack the dramatic flair of the HBO series, it has one thing in common, winter is coming. Unfortunately, the parties are either unaware of it or are seemingly oblivious to a stark reality.

All of the parties have launched their offensives by flinging open the doors to the treasury, each with new and creative ways to spend our tax dollars with the greatest political efficiency.

The number one priority for CFIB’s 5,200 members in Nova Scotia, consistently, is a reduction of the overall tax burden and the clearest path to this is through alignment of public sector wages and benefits to private sector norms and an overall reduction of the size of the public service. In other words, reduce the cost and the size of government.

For those who argue we have already been dealing with austerity budgets, here’s the reality. Since 2007 Nova Scotia government spending has risen from $7.3 billion to $10.5 billion, an increase of 43 per cent. Additionally, we’ve seen a whopping 22.5 per cent increase in our debt from $12.4 to $15.2 billion over the same time period. All this with an increase of only 16 per cent in the CPI (inflation) and our population flat-lining at 1.5 percent. This is not restraint and certainly not “austerity” by anyone’s definition.

Spending restraint is becoming more important than ever before. Perhaps because the weather is warming our politicians are floating sunny prognostications but there is an inevitable, relentless sociological cold front headed our way. Stretching our Game of Thrones metaphor, let’s call it “The Wall”.

According to Statistics Canada, that “wall” can be found in baseline population predictions. In 20 years, those over 65 years of age will make up fully 30 per cent of our population. A great majority of those will be out of the workforce and needing higher levels of healthcare. Keep in mind, in 2013, that same cohort made up only 17 per cent of Nova Scotia’s population.

By 2038, the forecasts indicate our median age will be nearly 50 and our overall population is expected to decline to under 934,000.

So who will carry additional tax load? If you’re a voter in your 20’s and 30’s, have a look in the mirror.

While efforts are being made to increase immigration, and claims are being made about having the largest population “ever”, the fact remains, unless we make some fundamental and dramatic changes to the way our government spends, we will be faced with some very, very difficult decisions indeed.

Absent in all of the spending promises in this election is a discussion of any long-term fiscal planning to deal with this issue. By long term, we don’t mean 4 years out, we mean 25 years out. Intergenerational forecasts which will set sustainable spending patterns.

Where are the real plans to deal with the inevitable decline in revenues from a shrinking and aging workforce? While some creative gains are being made through immigration, they are incidental and the problem is not getting people to Nova Scotia, it’s keeping them here. More than half of those who arrive leave within five years.

It’s not much wonder as we’ve been struggling with economic growth and carry the some of the highest tax burdens in the country. Our public service is nearly 5 points larger than the national average and their salaries and benefits are completely out of whack with private sector norms. Is anybody connecting the dots?

Meanwhile, the front pages are littered with political spending sprees.

Small business owners want politicians to have the courage to not just stop the bleeding, but begin to fix the problem through an actual reduction in the size of government, lowering the costs of doing business and a putting laser-like focus on better regulation and more efficient service delivery.

If not, we are sentencing our next generation to a cold, bleak future, on the other side of the wall.

This originally appeared in the Chronicle Herald, May 13, 2017

Fall Back Up

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This week on Fall Back Up, I have two podcasts for you to enjoy with two exceptional people.

The intent of this podcast is to is to provide you with engaging and thoughtful insights into Atlantic Canada through conversations with business leaders, innovators and high performers.

First up this week, one of Atlantic Canada’s digital pioneers. Back in the early 90’s Malcolm Fraser saw a business opportunity in this thing called the Internet. Over the years he built Internet Solutions Limited (ISL) into one of Atlantic Canada’s largest web marketing and development companies, but as you’ll hear, it wasn’t without some bumps in the road.

MalcolmIMG_2060-1000x464-1401900483He is an active member of the business community and has been recognized as one of Atlantic Canada’s Top 50 CEOs and is now the Vice President and Managing Director, Halifax at FCV Interactive.

In this episode we have a wide ranging conversation about the early days of the Internet, what business needs to know about adapting to new digital marketing environments, and what’s really going on in the background while you’re scrolling through social media.

The second episode is with Dr. Jeremy Koenig, a fascinating guy who I first met when I was looking to get in shape to run the Bluenose Marathon in 2012. While I never became marathon man, he did manage to whip my 50 year old carcass into the best shape it had been in for 30 years.

Jeremy is a geneticist and athlete. He got his PhD in biochemistry and molecular biologyJeremy_New specializing in genetics. As he tells it, he ran track because it fed his need to train.

After teaching nutrigenomics at Mount St. Vincent University and training high-performance athletes, in 2014, he launched Athletigen in cooperation with the high tech incubation hub Volta Labs. Athletigen uses proprietary software which looks at an athlete’s DNA to uncover data about strengths, weaknesses and ideal diets.

In another wide ranging conversation, we talk about how he landed in Halifax, how DNA analysis could be a game changer in personal health care and thoughts on success and failure.

If you have any feedback, comments, or suggestions, please be sure to leave a quick note on the comments section of my site.

To access the podcasts, there are a few options here. You can click on the pictures above, take this link to my PodBean site and you also can now also find Fall Back Up on  Stitcher or  iTunes.  The Soundcloud versions are below. I’m testing to see what works best so let me know if you have a preference of platform.

Have a great weekend.