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- ThinkTalk Newsletter - Nov 2023
ThinkTalk Newsletter - Nov 2023
ThinkTalk - Nov 2023 Newsletter
Nov 2023 Edition
G’day Everyone!
I’ll take the safe assumption here that you have made good progress in at least one area of your life, even if it is not in Business (yet)!
What Got You Here Won’t Get You There
In these tough economic times, I’m sometimes reminded of a quote from Yoda:
“Powerful you have become, the dark side I sense in you.”
Since about 2010, the times have been goooood for businesses, in general, in North America. We’ve been riding a wave of increased consumer demand, fueled largely by next to 0% interest rates. After the initial hiccup of COVID in 2020, this wave became even stronger as the governments flushed billions into the economy. We business owners were a beneficiary of that.
And we perhaps attributed that growth (at least partially) to our brilliant business intellect that we were able to grow our business rapidly in a short period of time.
Well, we’ve recently been reminded that there is a limit to consumer demand. Because there is a limit to their discretionary income available to spend.
And with high interest rates, people have been forced to redirect additional income toward the necessities of life - food, shelter, commute, and more.
This means that if your business sells “nice to have” goods and services, you need to prepare for this phase your business is entering (or has entered).
The behaviours and skills that led to success in the one phase of your business (when the economic times were good) may not be sufficient going forward. You must be ready to upskill and shift your priorities and strategies as you evolve your business (and yourself) to continue to provide enough value to your customers that they want to keep coming back for more.
Remember that the person you were that was able to grow your business in the “free money” economy may have developed a “dark side” of assuming that the good times will continue forever and you are the biggest business genius you know!
It’s time to see the light and face the reality where businesses will be rewarded for the old school values of earning an honest dollar through delivering superior value to your customers.
What doesn’t kill you, will make you stronger.
🌱 FROM THINK TEAM
💡 Highlights from the Fall Economic Statement 2023
(Note that the measures below are proposals, pending Royal Assent)
Crackdown on Non-Compliant Short-Term Rentals:
Income tax deductions for short-term rental expenses, such as interest, will be denied in areas that prohibit short-term rentals.
Deductions will also be denied if operators do not comply with provincial or municipal requirements.
For e.g., if you earn $60,000 in rental income in an area that prohibits short-terms rentals, but currently pay no tax on it due to $60,000 in annual expenses. With the proposed changes, you'd lose deductions for non-compliance, leading to $30,000 in taxes (assuming a 50% tax rate) for 2024.
Underused Housing Tax (UHT):
To reduce UHT compliance burden, specified Canadian corporations, partnerships, and trusts may be considered excluded owners, relieving them of UHT reporting obligations.
UHT filing and tax relief to be extended to a broader range of Canadian ownership structures starting in 2023.
Minimum penalties for failure to file UHT returns reduced to $1,000 for individuals and $2,000 for corporations, applicable from 2022.
The deadline for filing UHT returns for the 2022 calendar year extended to April 30, 2024, with the same deadline for the 2023 calendar year to avoid penalties and interest.
Canadian Mortgage Charter:
Allowing temporary extensions of the amortization period for mortgage holders at risk.
Not requiring insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal.
Giving homeowners at risk the ability to make lump-sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties.
Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
Employee Ownership Trusts (EOTs):
To encourage more business owners to sell to an EOT, the government proposes to exempt the first $10 million in capital gains realized on the sale of a business to an EOT from taxation, subject to certain conditions.
In effect for the 2024, 2025 and 2026 tax years.
Removing the GST/HST from Psychotherapy and Counselling:
The government proposes to exempt professional services rendered by psychotherapists and counselling therapists from the GST/HST.
Employment Insurance (EI) adoption benefit:
The government proposes to introduce a new 15-week shareable EI adoption benefit to provide adoptive parents with additional time and flexibility.
Surrogate parents will also be eligible for this benefit.
EI supports for seasonal workers:
The government has proposed up to four additional weeks of EI regular benefits for eligible seasonal workers in 13 economic regions.
Pregnancy loss:
The government proposes to create a new paid leave for workers in federally regulated sectors who experience a pregnancy loss.
To dig more into the items above, click the link below right from the source:
🌎 TOP 5 PICKS FROM AROUND THE WEB
📚 WISDOM FROM CHARLIE MUNGER
Charlie Munger, the legendary investor and business partner of Warren Buffett, passed away on Nov. 28th at the age of 99. Let’s visit some of his famous wise words.
Always be Learning 📚
“Spend each day trying to be a little wiser than you were when you woke up.”
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.”
Think Long-Term 🔮
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“I’d say we’re demonstrating what might be called the fundamental algorithm of life — repeat what works.”
On Creating Incentives 💡
“The iron rule of nature is: You get what you reward for. If you want ants to come, you put sugar on the floor.“
On Inflation 📈
"If I can be optimistic when I'm nearly dead, surely the rest of you can handle a little inflation."
On Business Development 🚀
"The best source of new work is the work on your desk."
Be Humble 🙏
“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”
Be a Teacher To Those Around You 🧑🎓
"The best thing a human being can do is to help another human being know more."
On Knowing Your Numbers 🔢
“Every time you see that word EBITDA, just substitute the phrase ‘bullshit earnings.”
🤓 QUOTE OF THE MONTH
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