Business Owners, their Customers and Employees Affected by Budget Provisions

The federal budget reintroduced on June 6 contains important and interesting measures that address issues as diverse as mandatory retirement and new EI provisions, all of which need to be discussed with business owners. As the T1 tax filing season is officially over for proprietorships on midnight June 15, be sure to set up time to discuss these provisions and their impact on both small and larger businesses before the summer hiatus:

For Business Owners:

• Budget 2011 announces a two year extension of the temporary accelerated capital cost allowance treatment for investment in machinery and equipment in the manufacturing and processing sector.
• Funding of $20 million over two years has been announced for The Canadian Youth Business Foundation to assist young entrepreneurs through mentorship, learning resources and start-up financing.
• BizPal is a free online service that allows small business owners to create a tailored list of permits and licenses that are required from all levels of government to operate their specific business. Budget 2011 provides $3 million per year to make BizPal permanent and allow the program to upgrade its technology infrastructure. 
• Hiring credit for small business ñ this is a temporary hiring credit of up to $1000 in increased EI premiums from 2010 to 2011 due to new hires. This is limited to employers whose total annual EI premiums in 2010 were $10,000 or lower.

For Employees:

• Changes to EI benefits:Work-sharing program extended to October, 2011 ñ this offers EI benefits to workers who are willing to reduce their hours in order to accommodate employers who otherwise would have to layoff staff.
• The Extra 5 Weeks EI pilot is renewed until 2012.
• Working While on Claim renewed until August, 2012 ñ this allows increased earnings while receiving EI benefits. 
• Best 14 Weeks Project renewed until June 2012 ñ this allows EI recipients in 25 high unemployment regions to have EI benefits calculated on the highest 14 weeks of earnings in the year preceding the claim.
• Targeted Initiative for Older Workers ñ supports unemployed older workers in vulnerable communities with training and employment programs in order to secure new employment.
• The Wage Earner Protection Program (WEPP) provides compensation of up to $3,400 in 2011 to workers for unpaid wages, vacation pay, severance and termination pay earned in the six months preceding an employer bankruptcy or receivership. WEPP is being extended to cover workers for whom their former employer's attempted restructuring takes longer than six months and does not end successfully.
• Mandatory retirement - The Government proposes to introduce amendments to the Canadian Human Rights Act and the Canada Labour Code to prohibit federally regulated employers from setting a mandatory retirement age unless there is a bona fide occupational requirement. This would allow Canadians to choose how long they wish to remain activein the labour force.

For Consumers:

• Unsolicited credit card cheques will be banned ñ these often arrive in the mail with low introductory rates designed to encourage additional indebtedness.
• The terms and conditions for prepaid gift cards will be investigated and monitored in order to protect consumers.
• The government will introduce legislation that will formalize mortgage insurance arrangements with CMHC and private mortgage insurers in order to strengthen oversight of the mortgage industry.

For more information, consult EverGreen Explanatory Notes as new legislation is introduced!

ADDITIONAL EDUCATIONAL RESOURCES: FINDEPENDENCE DAY