Tuesday, April 17, 2007
Death Of A 1,400 Year-Old Business
Posted by: Glen Stone
In a time when people often say that the only constant is change, you don't often hear about a business being around for dozens or hundreds of years. For example, people are often amazed to learn that the Toronto Board of Trade has been on the scene since 1845.
But a business in Japan took the cake with a continuous history of more than 1,400 years!
Unfortunately, the world's oldest family business is no more. It's gone bankrupt and been taken over by a larger company.
Lessons learned about how to keep a business alive for centuries, and how to drive it into the ground in a mere decade, are the subject of this fascinating Business Week article.
Glen Stone is Public Affairs Manager for the Toronto Board of Trade.
In a time when people often say that the only constant is change, you don't often hear about a business being around for dozens or hundreds of years. For example, people are often amazed to learn that the Toronto Board of Trade has been on the scene since 1845.
But a business in Japan took the cake with a continuous history of more than 1,400 years!
Unfortunately, the world's oldest family business is no more. It's gone bankrupt and been taken over by a larger company.
Lessons learned about how to keep a business alive for centuries, and how to drive it into the ground in a mere decade, are the subject of this fascinating Business Week article.
Glen Stone is Public Affairs Manager for the Toronto Board of Trade.
Monday, April 02, 2007
Budget Week for Toronto
Posted by: Carol Wilding
It was an unusual and important week for Toronto – three budgets in seven days. The Toronto, provincial and federal governments all introduced financial plans that directly affect our business community and our city.
Now that we’ve had time to analyze all three plans, we’ve provided a quick summary report for our members. Here’s my more detailed take on the seven days that helped shape our future …
This week began with a federal budget that contained some welcome news for Toronto business – reductions in capital cost allowances for some sectors and increased investment in skills and education to help build a stronger workforce. However, the Harper government missed the opportunity to make Canada more competitive by not reducing corporate income tax rates.
More importantly, the federal budget did NOT include a national transit strategy or funding to address the number one concern of business in Toronto – congestion and gridlock. The recent subway funding announcement was appreciated but it’s not a substitute for a properly funded long term plan.
The commitment to increase transfer funding for Ontario gave us hope that the province would use the extra billion dollars it was getting to upload the costs of social programs and housing off the backs of property taxpayers in Toronto.
However, the provincial budget three days later did not contain any uploading for the City (the end of ‘pooling’ for the 905 communities helps ease regional political tensions but was revenue neutral for Toronto). There was also no movement on a return to the fair share funding formula for public transit costs.
The Ontario budget did contain the biggest win of all three budgets for our business community – significant reform of provincial business property taxes. We’ve been saying for years that the unfair system, which punished business for locating in Toronto, had to be reformed. This budget tackles that problem head-on and will put more than $230 million back into the business community to re-invest in our economy.
There was also good news in the acceleration of plans to eliminate the capital tax by two years, a step that built on the federal budget cuts.
Finally, the Toronto budget reflected the lack of action by other governments, as well as the impact of the City’s own choices in recent years to increase spending and taxes.
The City itself described its operating budget as ‘unsustainable’ – an apt word, since Toronto cannot continue going further into debt, draining reserves, raising taxes and increasing spending. This budget underlined the city of Toronto’s serious financial problems, which are going to require fundamental changes.
Despite some initial steps towards increasing efficiency (efficiency audits, benchmarking and more cost recovery), the City’s net budget is increasing by 9.3% this year and tax hikes are being used to fill the budget gap.
The Mayor did live up to his promise to keep the property tax hike for business to one-third the residential rate, but that will still add more than $23 million a year to the business tax burden. This in a city that already faces the highest property taxes in the GTA and among the highest in North America.
In addition, the City is accelerating the possible introduction of other new or increased taxes, such as road tolls and levies on entertainment, parking lots, alcohol and tobacco.
With only nine of the 49 City budget envelopes meeting the demand to hold the line on spending, it is clear that City Hall can be doing more to control its costs. However, it is equally clear that it cannot deal with Toronto’s problems all by itself. All three levels of government have contributed to Toronto’s difficult situation, and all three need to take responsibility for addressing these challenges.
After three budgets in seven days, the Toronto business community has some federal and provincial tax breaks to offset the impact of another municipal tax hike. The engine of the Canadian economy has had some fuel added.
However, the long-term issue of the city of Toronto’s financial dilemma must be solved in order to improve Toronto’s business climate and quality of life.
Carol Wilding is President & CEO of the Toronto Board of Trade
It was an unusual and important week for Toronto – three budgets in seven days. The Toronto, provincial and federal governments all introduced financial plans that directly affect our business community and our city.
Now that we’ve had time to analyze all three plans, we’ve provided a quick summary report for our members. Here’s my more detailed take on the seven days that helped shape our future …
This week began with a federal budget that contained some welcome news for Toronto business – reductions in capital cost allowances for some sectors and increased investment in skills and education to help build a stronger workforce. However, the Harper government missed the opportunity to make Canada more competitive by not reducing corporate income tax rates.
More importantly, the federal budget did NOT include a national transit strategy or funding to address the number one concern of business in Toronto – congestion and gridlock. The recent subway funding announcement was appreciated but it’s not a substitute for a properly funded long term plan.
The commitment to increase transfer funding for Ontario gave us hope that the province would use the extra billion dollars it was getting to upload the costs of social programs and housing off the backs of property taxpayers in Toronto.
However, the provincial budget three days later did not contain any uploading for the City (the end of ‘pooling’ for the 905 communities helps ease regional political tensions but was revenue neutral for Toronto). There was also no movement on a return to the fair share funding formula for public transit costs.
The Ontario budget did contain the biggest win of all three budgets for our business community – significant reform of provincial business property taxes. We’ve been saying for years that the unfair system, which punished business for locating in Toronto, had to be reformed. This budget tackles that problem head-on and will put more than $230 million back into the business community to re-invest in our economy.
There was also good news in the acceleration of plans to eliminate the capital tax by two years, a step that built on the federal budget cuts.
Finally, the Toronto budget reflected the lack of action by other governments, as well as the impact of the City’s own choices in recent years to increase spending and taxes.
The City itself described its operating budget as ‘unsustainable’ – an apt word, since Toronto cannot continue going further into debt, draining reserves, raising taxes and increasing spending. This budget underlined the city of Toronto’s serious financial problems, which are going to require fundamental changes.
Despite some initial steps towards increasing efficiency (efficiency audits, benchmarking and more cost recovery), the City’s net budget is increasing by 9.3% this year and tax hikes are being used to fill the budget gap.
The Mayor did live up to his promise to keep the property tax hike for business to one-third the residential rate, but that will still add more than $23 million a year to the business tax burden. This in a city that already faces the highest property taxes in the GTA and among the highest in North America.
In addition, the City is accelerating the possible introduction of other new or increased taxes, such as road tolls and levies on entertainment, parking lots, alcohol and tobacco.
With only nine of the 49 City budget envelopes meeting the demand to hold the line on spending, it is clear that City Hall can be doing more to control its costs. However, it is equally clear that it cannot deal with Toronto’s problems all by itself. All three levels of government have contributed to Toronto’s difficult situation, and all three need to take responsibility for addressing these challenges.
After three budgets in seven days, the Toronto business community has some federal and provincial tax breaks to offset the impact of another municipal tax hike. The engine of the Canadian economy has had some fuel added.
However, the long-term issue of the city of Toronto’s financial dilemma must be solved in order to improve Toronto’s business climate and quality of life.
Carol Wilding is President & CEO of the Toronto Board of Trade
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