Ontario and BC Small Businesses Say They're Not Ready for HST Deadline

Intuit Study Finds Businesses Fear Losing Customers,
Still Unprepared for the New Tax

MISSISSAUGA, ON, June 23 /CNW/ - Just days before the new Harmonized Sales Tax goes into effect, many small business owners in British Columbia and Ontario say they're not ready to comply.

An Intuit survey of small business owners revealed that 54 per cent of respondents in Ontario and 47 percent in British Columbia won't be ready to comply with changes, and are worried about the perceived negative business consequences from the tax.

Why the concern? In the survey, conducted by Angus Reid Public Opinion, more than three-in-five respondents in both provinces said they didn't understand the need for the new tax regime. An overwhelming majority of respondents also fear HST will make consumers more price sensitive (82 per cent in BC and 91 per cent in ON) and could compel their customers to make purchases in provinces without HST (63 per cent in BC and 54 per cent in ON).

Given the lack of understanding and sense that the tax could stifle sales, the majority of respondents in both provinces clearly oppose the HST (76 per cent in BC and 79 per cent in ON).

HST: The Tax That Binds Small Business
While the public response to HST varies in the two provinces, the challenges of preparing for the tax have united small business owners. Similar numbers of respondents (44 per cent in BC and 45 per cent in ON) said they had "not nearly enough time to prepare." The two provinces share comparable small minorities (9 per cent in BC, 7 per cent in Ontario) of small business owners who feel they've received enough information.

Across the board, few believe the harmonized tax will produce the promised efficiencies, such as saving time and money, and making small businesses more competitive. Only 38 per cent of BC respondents and 39 per cent in Ontario acknowledged "saved resources" as a benefit and just 13 per cent in BC and 23 per cent in Ontario believe HST would make businesses more competitive.

"We've heard quite clearly that HST represents a challenge for small businesses. However, making the switch doesn't have to be an overwhelming administrative task," said Gene Lewis, country manager for Intuit Canada. "Being unprepared will ultimately lead to greater problems, which is why Intuit is working closely with small business owners to help them get ready."

The HST Setup Tool in QuickBooks Pro and Premier 2010 sets up the HST tax rate in a company file and automatically updates all items, vendor customer and account records to the new tax codes, saving hours of work. Plus, the Tax Centre in QuickBooks makes HST remittances easy to complete and eFile.

Many QuickBooks customers benefit from working closely with a QuickBooks expert. Certified QuickBooks ProAdvisors, located in communities across the country, can help businesses with HST and customize QuickBooks for their unique needs.

Is the Grass Greener in Ontario?

While the Intuit survey shows many shared sentiments across the two provinces, there are also differences. Small business owners in BC have a "grass is greener" outlook when it comes to the one-time HST transition credit available only to Ontario small businesses.

Sixty-three per cent of BC respondents said the credit would help small businesses to deal with the transition if it was available in their province. Conversely, 71 per cent of Ontario respondents, who are potential recipients, said they do not consider it effective.

Didn't we do This Before?
The situation is reminiscent of Atlantic Canada's move to HST in 1997.

"Having gone through that experience as an accountant, it wasn't the four-alarm fire that it's perceived to be in Ontario and BC," said Peter Budreski, a Halifax, Nova Scotia-based chartered accountant. "Choosing to ignore HST will get you nowhere in a hurry. There are benefits to HST but in order to reap them, it's critical for small business owners educate themselves and prepare."

Although BC and Ontario small business owners largely oppose the tax, they do concede, albeit cautiously, that it can bring some long-term efficiency benefits. Among BC entrepreneurs, almost half (49 per cent) increase their support for the HST when they understand it can streamline financial and administrative work. In Ontario, 34 per cent of respondents agree. In addition, 28 per cent of small business owners in BC report that boosting investment and jobs will increase their support for HST, while a much smaller proportion (16 per cent) of their Ontario counterparts share that opinion. 

"Small businesses are struggling with the impact of change and haven't yet seen the long-term promise," said Lewis. "The experience in Atlantic Canada does show that getting prepared pays dividends. The lesson is: prepare now, concentrate on finding the benefits and capitalize."

About Intuit Canada
Intuit Canada ULC is a leading provider of business, financial and tax management solutions for small- and mid-sized businesses, consumers and accounting professionals. Its flagship products and services, including Quicken®, QuickBooks®, QuickBooks® Enterprise Solutions, SuccèsPME, QuickTax, and ImpôtRapideMC, simplify personal finance, business accounting, and tax preparation and filing.

Additional offerings include ProFile®, a professional tax preparation software suite, the QuickBooks ProAdvisor Program and the Intuit Developer Network for professional users and developers. All are provided by Intuit Canada or through its partners.

Intuit Canada has employees located in Edmonton, Calgary, Mississauga, Montreal and Ottawa. Intuit Canada is an affiliate of Intuit Inc., which is listed on the Nasdaq stock market under the symbol INTU. More information can be found at www.intuit.ca.

QuickTax is the registered mark of LexisNexis Canada Inc., used by Intuit Canada under license.

About the survey
From June 7 to June 8, 2010, Angus Reid Public Opinion conducted an online survey on behalf of Intuit Canada among British Columbia and Ontario small business owners. The sample is further defined as: 101 Ontario small business owners with one to 99 employees. The margin of error for a sample of this size is +/-9.8 per cent, 19 times out of 20. The British Columbia survey included 100 small business owners with one to 99 employees. The margin of error for a sample of this size is +/-9.8 per cent, 19 times out of 20.

For further information:

Matthew Kanas
Edelman
T 416.979.0049 x. 346
[email protected]