As 2019 has just begun, there can already be outlined a series of trends in the global economy. The trends are mainly generated by the global political climate and are highly sensitive to the context. However, Canadian businesses are still expected to thrive and steadily grow in 2019. Global trade is the key in 2019 for businesses all around the world and Canadian small businesses seem to be more inclined to practice what they preach: open borders and more exports. The Canadian economy is expected to grow by 2% in 2019. Small businesses in British Columbia and Central Canada are those that will fuel the growth in 2019.
Trade Tension Won’t Stall the Canadian Economy
UK’s recent divorce from the EU is not expected to stall the Canadian economy; the trade war between Washington and Beijing doesn’t seem to affect the Canadian economy too much in a global context, either. The data released by Statistics Canada earlier this year shows that the economy grew at a steady rate of 2.9 percent during the April-June 2018 interval. This is twice the growth pace experienced by the Canadian economy in the earlier months of 2018, and the trend seems to maintain for 2019 as well. The Canadian economy is expected to grow in 2019 by another 2%, mainly fueled by small businesses in certain industries that focused on growing their exports.
Growth in exports and investments, but also the general tendency of the large consumer to invest more in the home renovations are good signs of economic ascension in the following 12 months.
2019 Brings Lower Taxes for Small Businesses
To support and protect Canada’s entrepreneurs and small businesses, the Government cut the business tax rate from 10.5 percent to 10 percent for 2018. As of January 2019, the taxes for small businesses went down to 9 percent.
At the end of 2018, a series of other positive changes for the Canadian small business entered in effect. These changes apply to qualifying assets after that date. This will offer the Canadian small business more flexibility and development opportunities.
- These changes will allow businesses to immediately write off the full cost of machinery and equipment for the machinery used in manufacturing and processing.
- They will allow SMEs to immediately write off the full cost of specified clean energy equipment.
- The changes introduced the Accelerated Investments Incentives. In the new context, businesses of all sizes, not only small ones, activating in all economic sectors to write off a larger share of the cost of newly acquired assets in the year when the investment is made.
The Canadian Government is Investing to Help SMEs Export More in 2019
The list of measures to facilitate the growth of the Canadian Small businesses doesn’t stop here. Recently, the Canadian government, to fuel the growth in the SME sector, implemented a series of measures to facilitate their growth and export potential. Canadian SMEs account for 99 percent of all businesses that exist across the country. These businesses offer stable jobs and wages for more than 10 million Canadians. For the Canadian economy, these small and medium businesses are the powerhouse. However, these enterprises don’t excel in exports. They are only generating a small fraction of the Canadian exports – a little over 10 percent. But with these changes at the horizon, the small business sector is only due to growing in 2019. Below are only some of the measures that will make a change for the Canadian small business environment in 2019.
- CanExport – is a Governmental program that offers funding solutions to support businesses to reach overseas markets. The program offers funding to participate in trade shows and trade missions, investigate overseas markets, to cover legal fees and to help them to adapt their marketing tools to local demands.
- Canadian Technology Accelerator– is a governmental program targeted at tech enterprises and provides them with support, connections and in-market guidance. The Canadian Government plans to expand the program globally and help small businesses in tech reach globally. Some spots of interest outlined in the Canadian Trade Commissioner Service’s proposition were tech hubs in Delhi, Hong Kong and Tokyo.
- CETA and CPTPP – the Canadian government recently implemented two free trade agreements that are due to help small businesses get ready for exports.
- Canadian Free Trade Agreement – the Agreement entered in force in July 2017and aims to help Canadian small businesses to sell their services and goods in all Canadian provinces.
Small business loans become increasingly accessible in 2019 and this is expected to contribute to the growth and development of Canadian SMEs. Business loans are easier to access now than ever before. The fintech revolution forces all players in the banking industry to tailor highly customizable and affordable banking products targeted at small and medium enterprises. In fact, many financing enterprises focus entirely on offering banking products to this category of organizations. From term loans to lines of credit, these loaners allow small businesses to grow at a fast pace.
Employment Rates are at a Historic High
Past November, in Canada, were created more than 30,000 full-time jobs. Some data coming from the Labour Force Survey shows that more than 18,705,000 Canadians aged 15 or older had a job in 2018. The number of employed Canadians steadily grew as compared to the previous months (18,693,000). The unemployment rate decreased from 6% to 5.8%.
In 2018, the Canadian economy has added almost 206,000 jobs. In 2019, economists expect the figures to grow furthermore. This is a tell-tale sign that Canadian small businesses, which are mainly responsible for most of the employed people in the country, face growth in demand and potential. Their products and services are now growing popular not only for domestic users but also in foreign markers. The job growth rate, by province distribution, is as it follows:
- Quebec added more than 9,000 jobs.
- Manitoba added 1,800.
- Ontario and Saskatchewan added 2,500 each.
While the global economy will experience some drawbacks in the Washington-Beijing war and the recent dramatic separation of the United Kingdom from EU, the Canadian economy has all the necessary resorts to reach new and interesting markets and help its SME sector grow at a fast pace.