Christian Filteau
Partner | M.Fisc. | Tax

The agri-food sector is expected to contribute significantly to Quebec’s economic recovery. Now is the time for farm businesses to innovate and invest.

The pandemic didn’t spare the agri-food sector. Producers, primary input suppliers and processing companies all faced their fair share of issues. There were foreign workers shortages, supply chains disruptions (restaurants, hotels, schools) and decreased exports—all of which led to crop losses, production surpluses, lost sales and ultimately, lower revenues. In short, farm profits took a hit.

But at the same time, the buy local movement has taken off, leading to initiatives like Panier Bleu and triggering changes in consumer habits. Agrotourism also increased in several regions of the province (e.g., microbreweries).

Just 33% of the food Quebecers eat is grown in the province

The current situation has created an opportunity for local agri-food businesses to increase their market share. Recognizing the pandemic-driven spike in interest for local products, the Quebec government has allocated $157 million to increase the province’s food self-sufficiency through a number of measures, including adopting new technologies, acquiring equipment, making agricultural investments and promoting buy local initiatives.

Agri-food businesses need to make investments—like implementing robotization or automation to make up for labour shortages—in order to future-proof their operations. But these investments are often very costly. High debt levels can increase business risk and generate stress, especially for farmers who may also be involved in a business transfer or succession. And given how demanding it is to manage technological changes, business owners may have less time to spend on financial management.

Smart investments to ensure good financial health

Protecting your business’ financial health involves taking stock of your current situation and assessing the impacts of any investment projects before moving forward. In other words, look before you leap. Here are the key factors to consider:

  • Purpose of the project
  • Anticipated return on investment
  • Priority level compared with other projects
  • Actual cost
  • Tax impacts on profitability and debt levels
  • The latest financial aid programs

The new market reality and government support programs have created the right conditions for many agri-food businesses to modernize. But investments should be made thoughtfully. You want to take advantage of tax incentives and optimize revenues, while also ensuring that any investments are appropriate for your organization’s needs, lifecycle stage, business model and vision.

In addition to government assistance programs, some businesses may be eligible for R&D credits when they purchase or make specialized machinery.

Contact our experts for more information and transform your investments into financial levers.

10 Dec 2020  |  Written by :

Christian Filteau is a partner at Raymond Chabot Grant Thornton. He is your expert in taxation for...

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Eric Dufour
Vice-President, Partner | FCPA, FCA | Management consulting

Business owners are increasingly aware of how much value their employees provide to their organizations and, indirectly, to their assets.

When you initiate a leadership transfer, it’s in your best interest as the seller to take into account your existing workforce. This is true across all sectors and specializations.

Recognizing the value of sought-after workers

Your potential successors are your employees or children (if you run a family business), but these workers are also likely to be solicited by the competition. Headhunters will go to great lengths to lure them to new positions, offering them the opportunity to take on important roles, collaborate on shared projects and get valuable training and coaching along the way.

In addition, most future leaders have a clearly defined set values and beliefs that they hope to find in the company they choose. And with the labour shortage being as serious as it is, top talent can be selective about which company they want to invest in and develop. This makes the prospect of a talent drain all the more threatening to companies.

Involving the next generation of leaders

The new market reality is forcing outgoing business owners to pay closer attention to the needs of next-generation leaders. This means enlisting their help in developing a realistic succession plan that includes concrete steps and a clearly defined schedule.

The more recent wave of uncertainty has only amplified this need.

Current leaders need to put their emotional intelligence to use and be transparent when transferring leadership. This strategy will help ensure their successors remain committed during the transition period.

Young workers are educated, perceptive and sophisticated. They have specific expectations and want current management to be frank and deliver on tangible commitments. They’re looking for a real transfer of responsibility and leadership. If they find the handover process unclear or poorly planned, these talents—who are otherwise known for their loyalty—could very well accept offers at other companies.

Employees and children involved in family businesses need to be patient during the transition. Sellers need to prove to buyers that they can be relied on throughout the process.

Anyone hoping to sell their business should take action right away by implementing a transparent succession plan that engages workers. After all, good talent is hard to find and productive employees drive growth.

Planning a gradual transfer

Too many entrepreneurs fail to take the time to properly plan their business transfer. Eventually, they may try to make up on lost time, only to find themselves faced with a dizzying list of consultants and organizations promising quick-fixes. This can lead to hasty decisions and considerable damage that’s sometimes irreparable.

In most cases, you need a comprehensive succession plan based on a gradual transfer of management responsibilities and property over three to five years.

The plan should be based on a solid assessment of the situation and lay out the financial considerations and other details, including the new generation’s involvement and capabilities. More specifically, a succession plan should provide for:

  • Stronger governance
  • More fluid communications
  • Concrete qualifications of the successors and key persons
  • Successor emotional intelligence
  • Roles, responsibilities and assignment of duties
  • Successor goals and expectations
  • Sellers who have benefitted/are benefitting from their assets
  • Satisfied sellers who act as ambassadors

A new governance structure, such as a succession committee, family council, management committee or board of directors is needed to oversee the plan and ensure its successful implementation.

A leadership transfer plan should reflect the needs of both the sellers and buyers, while ensuring that all changes are approved by all parties to boost engagement.

Finally, since business transfers always come with uncertainty, the succession plan should be paired with a strong internal and external communications strategy and plan.

Getting help from seasoned professionals is essential for building a viable leadership transfer plan.

09 Dec 2020  |  Written by :

Éric Dufour is a vice-president at Raymond Chabot Grant Thornton. He is your expert in management...

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Stéphanie Nadeau
Senior Advisor | CRHA | Human resources consulting

The pandemic has highlighted the importance of worker health and wellness. These issues are now more important than ever and businesses must take them into account when developing action plans.

A recent survey conducted by the Quebec Order of Psychologists found that people are experiencing higher levels of distress and anxiety due to the pandemic and the resulting public health restrictions. Nearly 86% of psychologists reported seeing increased distress among their clients and 70% said former clients have come back to see them since the beginning of the pandemic. How can we address this problem? Concrete action is needed.

According to the World Health Organization, promoting health in the workplace is a process that gives employees the means to take control of their health.

For businesses, creating a healthy workplace that fosters overall wellness can result in a wide range of benefits, such as:

  • Higher job satisfaction
  • Increased feeling of belonging and engagement
  • Improved productivity
  • Lower insurance costs and incidence of occupational injuries and illnesses
  • Decreased absenteeism

These are just some of the benefits of creating a corporate culture that actively promotes employee wellness.

Creating environments that foster employee wellbeing and personal growth can also help companies boost their employer brand. Since this strategy can help businesses attract talent, it’s especially useful for industries facing a labour shortage.

A brief history of occupational health and wellness

Corporate concern for worker wellbeing is relatively new. The shift started in the early 2000s, when managers started including worker health promotion in their management practices.

For the first time, employee health was an organizational responsibility. Between 2010 and 2020, worker health promotion gained prominence in workplaces and the responsibility became shared. Employers and employees are now expected to uphold the principle of worker health promotion, which is defined as the art and science of helping people make healthier lifestyle choices.

Employee health initiatives

The workplace is the ideal location for implementing health-promotion initiatives. Why? The reason is simple: work is where we spend most of our waking lives. In addition, employers have the opportunity to repeat messages over time to create a shared culture and promote common goals.

Employers aren’t there to save people. Their role, however, is to be an important actor that provides workers with helpful tools to positively impact their personal, social and family lives.

It all starts with caring

Caring is an attitude that shapes the way we interact with others. A caring management style involves being attentive to the wellbeing of your employees and others who contribute to your projects. It involves showing genuine concern for how they’re doing. Caring comes from the heart and manifests itself in day-to-day actions such as taking the time to listen, thank, reassure and advise your team. In short, it’s about showing that you’re interested in them as people.

A commitment from the top

Promoting health and wellness isn’t the sole responsibility of the HR manager or the OHS committee. To be successful, the entire management team has to get behind the initiative.

Healthy Enterprise movement and standard

The Healthy Enterprise movement involves implementing a process developed by experts based on best practices in occupational health and wellness. It works for organizations of any size or sector.

Our firm is recognized as a provider, ambassador and member of the Healthy Enterprise movement.

We’re equipped with the right tools to help you implement a health and wellness culture, strengthen your current initiatives or set your organization on the path to becoming a Healthy Enterprise.

Interested in the Healthy Enterprise movement and standard? Contact us! We’d be happy to tell you more about it.

This article was written in collaboration with Stéphanie Nadeau, who is a senior advisor at Raymond Chabot Grant Thornton and has been certified by Entreprises en santé to help organizations implement the Healthy Enterprise process.

09 Dec 2020  |  Written by :

Stéphanie Nadeau is a human resources expert at Raymond Chabot Grant Thornton. Contact her today!

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E-Commerce in Canada by Non-Residents: New GST/HST Obligations on Sale of Digital Products and Services

As of July 1, 2021, certain non-residents of Canada providing digital products (intangibles) and services to Canadian consumers could be required to register for Goods and Services Tax and Harmonized Sales Tax (GST/HST) purposes.

On November 30, 2020, the Deputy Prime Minister and Minister of Finance of Canada, the Honourable Chrystia Freeland, tabled the Fall Economic Statement 2020 which proposes to broaden the obligation to register for and collect GST/HST for certain foreign suppliers working in e-commerce.

Currently, the GST/HST system provides that only one person making taxable supplies in Canada in connection with a commercial activity or business that the person operates is required to register for and collect the GST/HST.

Additionally, a consumer or any person who acquires intangibles or taxable services in Canada outside the person’s commercial activity is required to self-assess and pay applicable GST/HST directly to the Canada Revenue Agency (CRA). Currently, the GST/HST is not collected on the purchase of intangibles or services from non-resident vendors and is not paid by consumers who do not self-assess.

Generally, the new measures proposed will require that non-resident suppliers register for and collect GST/HST when they provide digital products or services to consumers in Canada. These new rules will also apply to digital platforms that facilitate third-party sales.

With the announcement of these new measures, the federal government has put in place similar rules to those that went into effect on January 1, 2019 for the purposes of Quebec Sales Taxes (QST), which are in line with market trends, as recommended by several international jurisdictions. Download our document for an overview of the proposed measures.