Editorial: May 2012

Farewell to the penny and other comments on the 2012 federal budget

The federal budget will probably seem like old news by the time you read this, but the vagaries of publication schedules mean I was already into production on this May issue before it was released. Let’s take a look and see if there was anything interesting there for rental operators.

When is the last time someone proffered a penny as legal tender in your shop? I bet it has been a while. Next question: will you round your prices up or down? Go to www.canadianrentalservice.com and vote in our poll to let us know. I won’t miss the penny. In this era of electronic payment it is rare that I ever even need cash, never mind a tiny copper coin in a denomination too small to pay for anything on its own.

Probably the biggest news for rental operators is the renewal of the small business hiring credit that covers up to $1,000 of the additional Employment Insurance premiums you take on when your workforce gets larger. This might make it a little easier to decide to hold on to that hard-working part timer you brought on for the summer. Your total EI bill has to be less than $10,000 and you have to have a total, year-over-year increase in your EI premiums in order to qualify.

Raising the retirement age to 67 could conceivably impact some rental operations with older employees. However, I would think that if you have a 65-year-old working in your shop now, chances are the person is a pretty good worker and you wouldn’t mind keeping them around a little longer.

My father-in-law is 67 and he can work circles around me with a bad knee. Fun fact: when German Chancellor Otto von Bismarck brought in the first retirement age in 1890, the age was set at 70, but life expectancy was around 60. We would have to set the retirement age about 90 today to be equivalent. There seems little doubt that most people these days can keep working comfortably past 65 if they want to, and even less doubt that the federal pension system will not be able to afford the numbers of seniors we are expecting in the population without some reforms.

Some attempts were made in the budget to cut expenses and get the federal finances back on track toward balance, including more than 19,000 planned job cuts for government workers. These cuts were not enough to please deficit hawks, and too much for left-wing commentators, so they were probably just about right. One thing this government has managed to do so far is get the amount of economic stimulus and the amount of fiscal belt-tightening about right as economic conditions have changed over the course of the last recession. This is something governments in other countries have epically failed to do – just look at the messes in the U.S. and Europe. The resulting economic stability has been good for Canada and good for business in Canada. Whatever else you might think about this government, it has done at least that much for the rental industry.

Next issue: We have been talking a lot about mobile technology lately, and the trend continues in June Tech Tips. We’ll take a look at what a company called C3 is doing to help connect consumers to companies and give its clients the feedback they need to improve their operations.