Canada’s struggling small business sector has a direct impact on investor behaviour, say Ontario advisors.
Reacting to a call for tax incentives to encourage more small business investment from the Investment Industry Association of Canada (IIAC), advisors are reinforcing that when business suffers, disposable income depletes, leaving nothing left to invest.
“There is no disposable income. They (small business owners) are spending it on trying to stay afloat,” says Stephan Beda, an advisor with CSU Financial Group in Brantford. “If they don’t run a successful business, how can we expect them to invest their money.”
John Tabet, an advisor with Industrial Alliance Securities Inc. in Oakville, agrees, recalling a recent meeting, whereby taxes prevented his client from moving all his money from a corporate account to a personal account.
“They (the client) has to delay, taking some of the payment this year and deferring the rest until next year,” explains Tabet. “Here’s an owner who wants to pay down his mortgage, so he has free, personal cash flow, and has to delay (doing so) because of the taxes. (The impact) travels right down to the investor.” (continued on Page 2.)