Welcome to our Weekly Digest – stay in the know with some recent news updates relevant to business and the economy.

Can a Sole Proprietorship in Canada Pay the Owner a Salary?

Starting a business is an exciting journey that requires careful planning, especially when it comes to managing finances. One critical aspect is understanding how to compensate yourself, particularly for sole proprietors in Canada. Unlike traditional employment, sole proprietors cannot pay themselves a formal salary. Instead, they draw profits directly from the business, which are then reported as personal income on their tax returns.

This approach simplifies the process but also demands careful tracking of all business revenues and expenses to ensure accurate financial records and compliance with tax regulations. Understanding this method of compensation is essential for maintaining a sustainable and legally compliant business.

Bank of Canada summary shows concerns about a weak job market before the July rate cut.

The Bank of Canada is working to get the economy back on track and stimulate growth, but concerns about the weak job market are a significant factor in their decision-making process. The central bank’s governing council has highlighted that ongoing employment challenges could hinder economic recovery, making it a key focus in their recent discussions.

A newly released summary of the Bank’s deliberations shows that job market conditions were top of mind as the council weighed the risks of a weak labor market against the need for economic support. These discussions played a crucial role in shaping their approach ahead of the July 24 rate decision, balancing immediate challenges with long-term stability.

More Canadians are getting worried about the economy and their money.

Canadians’ views on the national economy have become more pessimistic since the start of the year, with many feeling less confident about the country’s economic prospects. Recent data shows that only 32 percent of Canadians now rate the economy as “very good” or “good,” a slight drop from earlier in the year, reflecting growing concerns about underlying economic issues.

Meanwhile, a significant 64 percent of Canadians now consider the economic conditions to be “poor” or “very poor,” up three points since January. This rise in negative perceptions indicates increasing worry about the direction of the economy, suggesting a national mood of caution that could influence both consumer behavior and future economic policies.

Canada turns down CN Rail’s request for binding arbitration in a labor dispute.

Canadian Labour Minister Steven MacKinnon has rejected a request from Canadian National Railway (CN Rail) to initiate binding arbitration in its ongoing labor dispute with the Teamsters union. This decision highlights the government’s preference for the parties to continue their negotiations independently, rather than relying on a neutral third party to resolve the conflict.

The ongoing dispute has seen both sides struggle to reach an agreement, and the rejection of binding arbitration places added pressure on CN Rail and the Teamsters union to find a mutually acceptable resolution. The outcome of these continued negotiations will be closely watched, as it could have broader implications for labor relations across Canada.

Business groups say a cap on temporary residents could hurt the economy.

Canada’s independent business advocate has expressed concerns about Prime Minister Justin Trudeau’s plan to reduce temporary immigration, warning that it could have serious economic consequences for businesses across the country. The advocate’s statement highlights the challenge the government faces in balancing the need to manage population growth with the need to support the economy.

While the plan to cut back on temporary immigration is part of a broader effort to address rapid population growth, business leaders worry that reducing the flow of temporary workers could harm industries that rely on this labor force. The government must carefully consider the potential economic risks of this policy change as it tries to balance these competing priorities, with significant implications for Canada’s economic future.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.