November 06

Get involved, it’s your newspaper
A new look for Trade Talks

Welcome to the new, improved and more contemporary look, for Trade Talks. Every five to ten years we revamp, spruce up and review the content of this important membership tool in an effort to make it even more meaningful for our members.

Last year, more than 85 per cent of the members surveyed, indicated they read and enjoyed the monthly publication. And that gave us pause briefly. Why fix something that isn’t broken? So we started by looking at a modest facelift, a new masthead on Page 1, new typography throughout, some standardization around page flags and column identifiers.

We invited our staff and The Brampton Board of Trade’s Marketing Committee to comment on the existing product and they had many suggestions.

We discussed at length our mission- why we wanted to publish a monthly newspaper - and concluded that we have several objectives in publishing:

• As a marketing tool for The Brampton Board of Trade to provide information to members on the activities of the many committees at the Board of Trade, the benefits and services, events and activities.
• As a resource for members – advice and general business information, success stories and triumphs by our members.
• As a way for members to communicate with other members either through stories or advertising.

Most of the observations from the Marketing Committee fell into the category of “why you we do that” and the answer invariably was “don’t know, but we’ve always done it that way.”

So you will see a difference in the way we present some features. We have also tried to better organize the newspaper in sections – the first section reports on advocacy issues, specific business news and opinion. The middle part of the newspaper will be dedicated to advice and guidance, forums and member information including small business of the month and spotlights on a member. And the back part of the newspaper will provide BBOT information that promotes the activities, events, networking opportunities, services and member benefits including things like After Business, Your Board of Trade at Work and special activities like the President’s Gala and Mayor’s Luncheon.

Trade Talks has always relied on member contributions, yet many members are unaware that Trade Talks is available for member news, information and advice. For instance Spotlight on a Member is open to any member of the Board of Trade. Send us a 450- 500 word story about your business - how long have you been in business, your philosophy or approach, products and services, vital information like address, hours of operation, website - whatever you believe makes your business unique. Attach a copy of your logo with a picture of the owner and email it all to editor@bramptonbot.com. It’s that easy. We will try to publish three or four spotlights in each issue on a first come rotation.

There are other ways to participate. If you have some business news - an expansion, a new CEO, a new product line or service - send us a brief that we can share with the business community. Trade Talks is distributed to 8,000 businesses in Brampton.

And speaking of 8,000 distribution, Trade Talks is the most inexpensive way to advertise to the business community in Brampton. To view our rate card visit www.bramptonbot.com or call 905 451 1122.

How to get published in Trade Talks

There is little doubt that Brampton’s annual Santa Claus parade, this year scheduled for Nov. 18, is this city’s biggest annual event. More than 100,000 people attend annually.

But the parade has had a rocky history, at least until The Brampton Board of Trade became involved in the mid 1980s and the Rotary Club of Brampton in the early 1990s. And today the Brampton Downtown Business Association is an active partner.

The parade had not been held in Brampton since the 1950’s when it was sponsored by Blaine’s Hardware, a local downtown hardware store. In the early 1980s, Joe Spina, who was a Board of Trade member and a member of the Brampton South Rotary, organized a committee to resurrect the parade.

Spina had experience running the Pine and Rose Festival parade and convinced The Board of Trade to become a sponsor – providing money for bands and other miscellaneous expenses. Don Gordon, the City of Brampton’s Director of Parks and Recreation, agreed to build the float for Santa Claus.

Spina chaired the event for four years. The Jaycees helped with marshalling. Spina left the chairman’s role when he was elected to the executive of The Brampton Board of Trade. He became President in 1989-90.

By the early 1990s the parade, which was held during the afternoon on a Saturday in November, was attracting 40,000 people. But while the parade was popular, its financial footing was precarious.

The funding required for marching bands, clowns and feature performers had been raised by The Brampton Board of Trade, through various means, including grants from their budget and individual donations from members.

But when the recession of the early 1990s hit the GTA, the parade was once again in jeopardy.
A decision was made by The Brampton Board of Trade in early 1993, that unless a sponsor could be found, the parade would be cancelled. Once again, the connections between The Brampton Board of Trade and Rotary paid off.

The President of the Board of Trade, Jim Inglis, was also a director of the Rotary Club of Brampton. This Rotary Club, which operates Rutherford Bingo and, until the recent slump in Bingo revenues caused substantially by the new anti-smoking laws, contributed hundreds of thousands of dollars each year to charitable causes in Brampton, stepped forward to rescue the parade.

Despite the financial constraints imposed by the recession, The Rotary Club of Brampton committed $25,000 a year for the next several years to provide the funding required to stabilize and build the parade.
It was then through the imaginative stewardship of the Board of Trade, that the parade did grow. A decision was made in 1995 to turn the parade into a night-time event. The result was an unqualified success.
Now, more than 100,000 people watch the parade each year. Children huddled in their winter suits, scream with glee at the brightly lit and highly decorated floats and parade entrants, usually more than 100 of them.
And front and centre, each year, is The Brampton Board of Trade and the Rotary Club of Brampton. In recent years the Brampton Downtown Business Association has become a co-sponsor, allowing the parade to continue to be Brampton’s premier attraction.

Last year there were 130 entries in the parade. It ran for 2 ½ hours. By comparison the Toronto parade is an hour long.

Chair John Hayes says the Toronto's Parade “is a very Commercial Parade, the entrants are all major international corporations, while The Brampton Board of Trade brings us a "Community" parade. Businesses, large and small, combine with service clubs, churches, minor sports groups, schools and other community groups contribute to our nighttime Parade.”

Hayes says the parade is ever evolving. “We have made a conscious decision to shorten the parade this year. We will have 75 to 80 entries. What has made this parade so successful over the years has been a combination of dedicated committee members and interested entrants all striving to produce the best possible parade for the children of Brampton.”

If the weather co-operates, we will see crowds at the curb exceeding 150,000 people - kids of all ages.”

It’s through the hard work and financial contributions of organizations like The Brampton Board of Trade, The Rotary Club of Brampton and today the Brampton Downtown Business Association that Brampton's premier event lived to see the 21st century and be enjoyed by the thousands who watch it each year.

Past chairs of the parade include:

1986 & 1988 Joe Spina
1989 & 1990 Ken Hay ('89 John Armstrong, Co-chair)
1991, 1992 & 1993 Doug Carmichael
1994 (Last Daytime) John Hayes
1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002 John Hayes ('02 Mike Chaddock co-chair)
2003 Mike Chaddock ('03 John Hayes Co-chair)
2004 Mike Chaddock
2005 & 2006 John Hayes

Business Advice
Have you discussed tax minimization strategies?

This is part three of a nine-part series – “Eight critical questions every small business owner should answer.”

As an owner-manager of an incorporated business, you have several opportunities to minimize taxes. Following are just a few of the strategies that can potentially reduce your tax bill.

Minimize taxes
• Employ lower-income family members and pay them a salary that is reasonable based on the services they are performing. The income received by the family member will be taxed at a lower rate.
• Pay dividends from corporate earnings to spouses and adult children shareholders. Canadian dividends are taxed lower than salary income (however they will not create RSP contribution room or CPP/QPP pensionable earnings). Dividends paid out to benefit related minor children are taxed at the highest marginal tax rate under the “kiddie tax” rules.
• Loan corporate funds to adult children for education costs. The loan is considered taxable income to the adult child, however the tax payable on this income may be very low or even nil due to the child’s basic, tuition and education tax credits. When the adult child repays the loan to the corporation in a future year when the adult child is working and earning income, the adult child will receive a personal tax deduction.
• Consider an “estate freeze” so that the capital gain on the future growth of your business is deferred and attributed to the next generation, but control of the business remains with you.

Reduce taxes
• Set up a Retirement Compensation Arrangement or Individual Pension Plan to increase your retirement savings, while lowering your corporation’s tax burden.
• Use corporate funds to make contributions to your Retirement Savings Plan (RSP). The cash used to make the RSP contribution will be considered employment income (reported on the T4 and thus will create future RSP contribution room) but the offsetting RSP deduction will avoid taxation on the increased salary.

Use insurance as shelter
• Corporate-owned life insurance can help fund tax liabilities and shelter tax on surplus investment income.

Purchase investments
• If there is an impending Capital Tax liability, consider purchasing eligible investments to reduce the Capital Tax liability (investment merits and after-tax investment returns must be considered).

Mike Huet is Vice President and an Investment Advisor with RBC Dominion Securities Inc. in Brampton. Member CIPF. Mike can be reached at 905-450-1042 or at mike.huet@rbc.com.

Business Advice
Business at the Buffet: Can you Claim it as an Expense?

Some of the most productive time business owners spend with clients or customers is over a meal, playing golf or at a sporting event. The government, however, is not as enthusiastic about these business relationship-building activities and strictly enforces the following rules that restrict the deductibility of these expenses for tax purposes.

Entertainment

For a meal or entertainment expense to be deductible for tax purposes, the amount must be incurred for the purpose of earning income from your business. Taking a customer out to lunch or to a hockey game to strengthen your relationship, for example, is a valid business expense.

The government’s perspective, however, is that these types of expenses include a personal element and therefore you may only deduct only 50 per cent of the amount spent, including taxes and tips. This restriction also applies if you take your employees out as a reward for their work.

There are certain exceptions to these rules. For example, the limit doesn't apply to employer-sponsored events for employees, provided the event is available to all employees at a particular place of business. Therefore a company can deduct, in full, the entire cost of the office holiday party when all employees working in the office are invited.

Golfing Expenses

Many business deals have been struck on the golf course. Unfortunately, the government does not allow any expense incurred for the use of a golf course, such as membership fees, initiation fees or daily green fees, to be deducted for tax purposes.

Meal or entertainment expenses spent at a golf club are 50 per cent tax deductible. It's important, however, that the amounts charged for meals and beverages are clearly itemized on the bill – the deduction of an all-inclusive charge from a club, which includes meals and beverages, is not tax deductible.

Charity Golf

Charity golf tournaments charge players a fee comprising various components to cover the cost of play (such as green fees, cart rentals, door prizes, food and beverage) and to include a donation to the cause for which the tournament is raising funds.

The amounts related to the various costs are not considered to be a charitable donation because players receive something of value for them. The excess amount charged, however, is considered to be a charitable donation. The charity benefiting from the tournament typically issues a charitable donation receipt for this amount to players, which they may claim for tax purposes.

Your promotion and entertainment budget can help you build valuable business relationships – and claiming the correct amounts will ensure that you don’t incur the wrath of the Canada Revenue Agency next time you take a client or customer up to the buffet.

Ken Karakashian is a partner of BDO Dunwoody LLP (www.bdo.ca). If you have questions about this article or you would like to receive BDO’s “Tax Factor” newsletter, contact Ken at 905-270-7700 or kkarakashian@bdo.ca.

As millions of baby boomers approach retirement age, there is an anticipated labour shortage looming. Some experts say that one way to lessen the impact is to invite mature workers to stay on the job longer.

Mature employees have some detractors. Some will say they aren't as productive on the job as they once were. Others say they are inflexible and less open to changing approaches to business. But in most cases they bring a lifetime of skills, knowledge and experience to the job, and a reputation for being loyal and hard-working employees.

As the great brain drain is upon us, who wouldn’t benefit from that kind of experience during a time of transition? A diverse workforce will provide employers with a mix of skills, experience, and knowledge that can help their business succeed.

Some mature employees stay in the workforce because of financial necessity, but others choose to stay at work through their retirement years for personal satisfaction. They want meaningful jobs that are interesting and motivating.

So how do you keep these employees? Incentives or even flex hours may be an enticement. Perhaps, even a phased retirement - slowly reducing their work hours over time.

The challenge for some businesses will be integrating these employees with young people who are just beginning their careers. Organizations that offer training opportunities, regardless of age will have a better chance to stimulate and reinvigorate the mature employee. Just because they are older, doesn’t mean they want to stop learning.

The investment in training a mature worker will create a better working environment where young and old are seen to make equal contributions to the success of your business. The mature employees will make great mentors, not just for the training they receive, but for the knowledge and experience they have acquired over a lifetime of work.

Businesses that don’t have mature employees might want to consider recruiting them for the reasons outlined above.

The key is to ensure that managers understand the generational differences and how to leverage each generation's strengths to benefit the business. It might make sense to pair an older worker with a younger one to combine their strengths and approaches. And they can learn from each other.

If you are having difficulty managing the generational transition, there are companies that offer coaching services to help develop that dynamic work environment for your business. Coaches can often go where managers fear to tread, building consensus and dealing with the disparities that might be evident in a diverse workforce.

Coaches can bridge the gap between youthful enthusiasm and mature experience. They can also develop a mentoring program that will help maximize the assets of both age groups.

Iris Harrison is President and CEO of a full service human solutions company, Success Careers, The Search Executives. She welcomes feedback and can be reached at iris@successcareers.ca or at 905 450 5944. Or visit www.successcareers.ca

You can protect your assets from creditors

Bankruptcy is devastating. The impact of having to declare you can’t meet your financial obligations has far reaching effects emotionally and monetarily. For businesspeople, it’s a stigma that may mean never being regarded as creditworthy again.

Despite a strong economy, the trends to personal and business bankruptcy in Canada have been dire over the past few years. In 2005, the Office of the Superintendent of Bankruptcy recorded a total of 111,807 bankruptcies – 102,660 by individuals, 9,147 by businesses. Among its other duties, the Office is also responsible for administering the transactions between trustees, creditors and debtors – and for maintaining publicly accessible records of bankruptcies and receiverships. These are lists no one seeks to get on, but that some fall into for a variety of reasons, including:

• Excessive reliance on consumer credit
• Job loss or family pay cut
• Mismanagement of personal finances
• Business difficulties
• Divorce or marriage breakup
• Lawsuits

Despite their best efforts, bankruptcy remains a painful possibility for too many Canadians for anyone to say, “It can’t happen to me.” So is there anything an intelligent person can do to prepare for the unthinkable and perhaps lessen its financial impact? Within certain limitations, there is.

Mutual funds, “segregated funds” offer professional money management, provide diversification, and have the potential to grow in value.

If you make a segregated fund investment and name a spouse, child, grandchild or parent as beneficiary, your investment may be protected from your creditors. The protection isn’t foolproof, and won’t be effective if you try to use your segregated funds as an emergency asset shelter. Speak to your adviser about other conditions that may apply.

Through seg funds – as they’re called – investors concerned about creditor-proofing their assets can get the added value of professional money managers, and an intensive research-based approach to investment selection, as well as a wide variety of options to suit different risk tolerances.

Seg funds have other appealing features. The principal amount invested in a seg fund is guaranteed after 10 years. Seg funds also feature a death benefit that pays to your heirs the principal amount or the contract market value – whichever is greater.

Individuals who are in business for themselves or who carry greater risk for personal liability may be more exposed to the possibility of bankruptcy. For their own sakes, as well as for those of their loved ones and heirs, investigating segregated funds is a responsible course of action. If you are in this situation, I encourage you to speak to your financial adviser about how segregated funds can meet your needs.

Tom R Allain, CFP is an Independent Certified Financial Planner associated with Ten Star Financial Inc. specializing in personalized investment, insurance and retirement planning to business owners/managers, and professionals. (905) 796-1219, email tom@trallain.ca or visit us at www.trallain.ca

It’s 2011: Did you plan for the future?

As you look at the calendar you are shocked to see it now reads “January 2011”. You can hardly believe it has come upon you so soon. It seems like only yesterday the calendar read November 2006.

A sudden realization hits you. First, you are now five years older, five years closer to your retirement. Secondly, you realize all your staff is also five years older and those “senior” folks are spending their lunch hour quietly talking about what they will do when they retire.

You recall someone telling you that statistics indicated approximately 82 per cent of the working force in 2006 would be between the ages of 55 and 65 in 2011. You now realize that the statistic relates directly to the folks in your operation. Your company is in the position it is today, largely because of the efforts of that very 82 per cent of the population.

The good news is that just as your heart rate starts to race at the thought of who will take over in the key leadership roles, you wake up. Quickly glancing at the calendar you see that it is still November 2006 after all. The fright over with, you can relax, or can you?

True this may have been just a bad dream. However, will the reality be something you look forward to because you are well positioned with folks to take over key roles? Or will this be a nightmare that keeps you up at night.

The good news; there is still time for you to do something to influence which type of dream you will have and what the future of your organization will be like. But first you need to answer a few questions.

• Have I identified the key roles in my leadership team?
• Am I aware of the aspiration of the folks on my leadership team?
• Are my present leaders grooming individuals to follow them?
• Do I have someone who can take over my role so I can retire?

Four very simple questions when read quickly. However, can you answer YES to all four? If not, then you might want to consider what it will take to ensure that you can answer a positive YES to each of these questions. As in the dream sequence, 2001 will be upon us before we know it.

Gordon is President and Founder of The Newman Learning Group Inc. an organization dedicated to providing value add solutions to improve the bottom line performance of organizations. Gordon may be reached at gordon@newmanlearning.com or 905-790-2944.