Business often seems to get a bad rap. It’s a popular whipping boy when the economy is in decline and governments are in need of more tax revenue. It’s a saviour of local communities when one decides to set up shop but a pariah when it leaves town.
Profit is somehow viewed as a bad thing, and as soon as someone makes a dollar, it’s a target for increased tax. However, no matter who you are, corporate Canada and indeed global capitalism are deeply integrated into our lives and, for the most part, in very positive ways.
Virtually everything we eat, wear, use, play with and travel on are provided by some company, large or small, that is in business to make a profit. I grew up in a farming town, and the farmers in the area made their living from selling cows and crops; they used farm equipment that was manufactured by larger companies such as Case and John Deere.
We live in homes built and filled with materials that are manufactured in almost every part of the world, and everyone who contributed to those products, working for themselves or a larger company, needs to make a profit to survive.
Our connection continues. If you have a pension, RRSP or education fund for your child, it is invariably supported by mutual funds or other market investments that generate income on the backs of thousands of companies. If you don’t have a job and need one, chances are you are hoping to find an expanding company where you can make enough money to feed and clothe yourself and your family. All of these benefits evaporate if companies aren’t able to make a reasonable profit.
In the current federal election run-up, stumping politicians are all talking up their own brand of economic restoration and reform. Some want to raise taxes, others to run deficits, and some want to do both. All of these ideas are worth considering, but let’s be clear that there is no magic money tree that grows for the pleasure of governments to harvest whenever they promise to spend money.
If you run a household and family, you have a pretty good idea of how finances work. If your rent goes up and your income doesn’t, you either save less or eliminate the Friday night dinner out. If the costs go up too much, dance lessons or the hockey team go out the window. If you lose your job and can’t find another one in town, you may have to move.
Business works the same. When profit dwindles for any reason, the belt gets tightened. Jobs get cut. When ongoing profitability is threatened, the company throttles back production, closes offices or goes out of business altogether.
During the past several years, Squamish has been littered with examples of businesses that were forced to leave town. As a businessman, I can tell you that no one takes any pleasure in shuttering a factory, office or storefront. Almost always, it’s done for financial reasons, meaning the costs are too high or the revenue is too low. Or both.
So the next time you’re passing by a rusting mill or wishing you had that old job back, the one that allowed for the kids to have dance lessons and a cabin at the lake, think hard about the promised new world that will be paid by increasing corporate taxes. It takes years to create a business, but causing one to go bust can happen in the blink of an eye.
