Great News for Canadian Home Improvement Consumers and Retailers Pt II

How Small Businesses can Benefit from the Canadian Budget

In efforts to stimulate the economy, the Canadian Government has included a number of changes in the 2009 budget to help small businesses. In fact, there’s so much in the budget that I had to write a second posting in order to touch on a few other facts that I found beneficial.

Now I haven’t read through the entire budget word for word, but from my quick overview of the sections that I thought were most relevant to small businesses, here are my top ten points all small business owners should be aware of:

Enhanced tax deductions for computer purchases - Computers are now 100% deductible.

Increased availability of financing from banks - The limit on the Canada Small Business Financing Program (which guarantees 85% of loans made to qualifying small businesses) will increase from $250,000 (CDN) to $300,000 (CDN), which should help make borrowing easier.

Increased availability of financing options from BDC - The Business Development Bank of Canada (BDC) & EDC will provide at least $5 billion in additional loans and credit to support small business through the current economic challenges.

Assistance with vehicle and equipment financing - The creation of the Canadian Secured Credit Facility, with an allocation of up to $12 billion to purchase asset-backed securities, should make more financing options available for small businesses to purchase vehicles and equipment.

Lower taxes for small businesses - The maximum threshold for small business income at the lowest federal tax rate increased from $400,000 to $500,000. Here’s hoping we all break this threshold some day!

Tax credits to encourage customers to buy your products. The Home Renovations Tax Credit will provide homeowners with a tax credit when they spend up to $10,000 on home improvement. This may provide huge promotional opportunities to those serving that sector.

Grants to consumers spending money on energy-efficient improvements - The ecoENERGY Retrofit program provides homeowners with grants up to $5,000 to offset costs of making energy-efficiency improvements. This program has been extended and could be a big opportunity if you’re in this sector.

EI enhancements that will add flexibility to help control labor costs - EI is being extended by five extra weeks, from 45 to 50 weeks. This should enable those of us in the seasonal business to gain more flexibility with seasonal labor and encourage returning seasonal staff.

Changes to work-sharing agreements that can save you money - Work-sharing agreements are extended by 14 weeks to a maximum of 52 weeks, again giving you as an employer more flexibility.

Possible changes for self-employed parents - No action take yet, but they’re consulting with Canadians to help develop options to provide self-employed parents with access to maternity and parental benefits.

Check out the details for yourself by reading the Canadian 2009 Federal Budget.

Take Advantage of the Canadian Budget

There are a number of benefits that all retailers can take advantage of as a result of this budget.

To give you an idea, a few things that I’m going to consider acting on include:

1. Sourcing new financing for equipment and a vehicle purchase (upgrades) and possible further expansion.

2. I’ll be purchasing and upgrading a number of computers and use the total dollars spent as full tax deductions.

3. Being in the home & garden business as well as landscape services, I’ll certainly be promoting and educating    our customers and clients about the Home Renovations Tax Credit. This alone should help my customers save and encourage strong sales for 2009.

4. I’ll also have more flexibility when it comes to our seasonal workforce (given that they can collect on EI for five more weeks than last year), enabling me to look at starting my seasonal workforce a little later and cutting back a little earlier at the end of the season.

5. Also with the added flexibility in the work-sharing agreement, if needed, I can -initiate more work-sharing at our operations, keeping overall wage budgets lower for the coming year.

6. Finally, I’ll be able to save more in taxes at the end of the year allowing me to reinvest more into my businesses.

So what can you benefit from as a result of the 2009 Federal Budget? I hope that you’ll see an opportunity or two that you can use to grow your business this coming year.

This information is accurate as of the date this blog was posted

Andy

Click here for Part I of this post