Like most kids, my first job was in the fast food industry.
Once upon a time, I worked at a restaurant in downtown Langley, B.C. It was your stereotypical fast food joint job for a teen. Work a variety of stations, get paid a little more than minimum wage, and pocket a little money for social outings, fun with friends and late night university burger runs.
One of the perks of the job was the discount on meals. Fifty per cent off on a value menu for lunch or supper during a 30-minute break? How could a 17-year-old kid say no? If I was called in to work, I enjoyed a free meal. Even better.
And a couple times during my shift, especially on those hot summer days when I worked around the French fry vats, I would take a rest to down a small soft drink for hydration purposes.
So I had to laugh, and cringe, when I found out earlier this week that the Canada Revenue Agency wanted to tax employee discounts. Fortunately, the federal government backtracked on the scheme once the details became public, and a backlash quickly developed.
I’ve been critical of the federal government’s proposed small business tax scheme. They want to target the small percentage of small businesses that make lots of money, but it’s going to ultimately impact a lot of small businesses struggling to make ends meet.
One of the biggest problems is it will discourage entrepreneurship. People should want to have the dream of owning their own business.
This plan to tax employee discounts was even worse.
It was likely one of the most inefficient concepts I’ve ever heard. Would it have meant that my manager back in the day would have had to pay some form of tax for those half-priced value meals I wolfed down? Would the situation have been worse for those freebies I was given for coming in on a moment’s notice?
(Point of clarification: the free meal had nothing to do with why I worked on call. If I took a six-hour shift once every two weeks, I made about $45. Multiplied by 26 on-call shifts per year, that’s an extra $1,170 for the year. For a teen living at home, that’s a lot of money. But I digress).
Can you imagine how much extra work it would have been for the owners of restaurants who provide some form of a discount to employees who are working?
Retail businesses, such as clothing stores, were also going to be hit hard. A lot of clothing stores offer a discount for their staff. It’s not only good for the employee, but it’s good for the store as well, since the employee gets to show off some of the merchandise when out with friends.
If we were talking about widespread lavish gifts and discounts for employees, then this concept might make sense.
But the majority of businesses will provide discounts that shouldn’t even be on the government’s radar.
Entrepreneurs are busy enough as it is. They have to work long hours, often arriving well before the business opens, and staying for a couple of hours after the business closes.
And many of them have families, so the moment they get home, they have to prepare supper, and then shuttle their kids off to hockey practice, soccer practice, dance lessons or any of the other activities that children have.
They don’t have the time to calculate the tax on trivial items like small discounts.
Your local business owners definitely aren’t working Ottawa bureaucrat hours.
It makes you wonder why the Canada Revenue Agency wanted to proceed with this.
People should be encouraged to follow their dreams of owning their own business, and being their own boss. There’s still something to be said about the Canadian dream.
But changes to the small business tax system only make life more difficult for those who have their own businesses. Those proposed employee discount taxes would have been a nightmare.
Concepts such as these discourage entrepreneurs from actually aiming for greatness with their businesses. And now the possibility of offering a perk of employment could be removed.
What does the federal government have against entrepreneurs?
