Thursday, September 23, 2010

One Chamber Survey with a large grain of salt, please!

Every so often, we come across membership surveys from lobby groups that ask so many uncontrolled and inconsistent questions that the survey makes respondents – the very people it seeks to represent – look silly.

The Winnipeg Business Leaders Survey, released a couple weeks ago by the Winnipeg Chamber of Commerce is, unfortunately, a prime example.

According to Dave Angus, this is the first time in many years Winnipeg business leaders are no longer feeling the pinch of a worker shortage. Today, says Mr. Angus, businesses are more concerned about finding new markets and customers than they are about finding skilled workers.

How consistently, then, is this new concern reflected in the way businesses answered other survey questions?

Let’s have a quick look.

When asked to identify the one thing the provincial government could do to improve the business climate in Manitoba, a large portion of businesses (31%) wanted a reduction or elimination of business and payroll taxes. The same was true of municipal governments – 39% wanted the City of Winnipeg to reduce or eliminate business taxes.

What advice did respondents give to provincial and federal governments to deal with the current economic slowdown? You guessed it… 53% said they wanted a reduction in taxes.

No mention, at all, about their number one concern – finding new markets and customers.

Clearly, we get it. Businesses don’t really like paying taxes. Taxes ruin economies. Taxes create deadweight loss, market inefficiencies, and contribute to the loss of consumer utility. Fair enough.

What, then, would businesses do with all the cash currently being dumped into the tax hole if governments cut taxes? It’d be reasonable to assume they’d invest it in areas they feel most challenged, right? Like maybe market development, for example?

Apparently not. Only 27% of businesses are willing to use tax savings to boost marketing. Marketing, in fact, is sixth on the list of things businesses would invest in if taxes were significantly reduced. Yet Mr. Angus suggests it’s the number one concern facing Winnipeg businesses.

Interestingly, thirty-eight percent would invest in capital – build something, expand something, or otherwise invest in something that has the potential to generate future value.

And there’s nothing wrong with wanting to make more money, but capital investment doesn’t normally come before market development. So, why is capital spending a higher priority than market development when finding new markets and customers are, as Mr. Angus pointed out, the new concerns of business?

What else would business invest in if taxes were reduced or eliminated? Thirty-one percent would increase wages or benefits for employees. Well, isn’t that nice. And in time for Christmas, too!

How believable is it to think business would, in fact, increase wages when the Canadian Federation of Independent Business (CFIB) lamented and almost cried, on behalf of their members, over government’s decision to increase the minimum wage by a quarter?

According to the CFIB, salary costs are one of the highest costs for small businesses such as restaurants and other family run enterprises. To be profitable, said the CFIB, they need to keep these costs in check. A twenty-five cent minimum wage increase is too much of a burden for them in these tough economic times (said the CFIB).

And yet, if we are to believe the Chamber survey, the only thing standing in the way of businesses increasing salaries and benefits are… you guessed it… those pesky taxes. Tough economic times be damned!

If read carefully and considered in a broader context, this survey paints an ugly picture of Winnipeg businesses.

And whoever designed this year’s Chamber survey has done a great injustice to Winnipeg businesses. Because of its loose structure, it has enabled secondary and tertiary messages to emerge that make hard-working Winnipeg businesses look not only inconsistent and one-dimensional, but also like disingenuous money grubbers who don’t want to pay their share of public goods.

That’s too bad. Winnipeg businesses should be expecting more from their Chamber.