Let’s chat today about how good practices for your bookkeeping benefit you and puts more money in your pocket. In case you are keeping count, this is item six in the series (see below).

Grab your cup of tea (Okay don't grab. Mind your manners and pick it up nicely.) ... sit back, take a sip. Now take a deep breath and relax. Focus here. Bring your mind on this page right now ...

So What are Good Bookkeeping Practices?

I like to break good bookkeeping practices into seven categories:

1. Get yourself organized. Enter your data regularly.

 

2. Use computer software so you can mine your business data.

 

3. Learn to create audit trails as you go. Some are super easy to implement.

 

4. Reconcile your bank statement, credit card and vendor statements regularly.

 

5. Comply with federal record retention requirements.

 

6. Learn to avoid what gets sole proprietors in trouble with the CRA/IRS.

 

7. Prepare and file your U.S. and Canadian government compliance reports (sales and use tax, employment and payroll tax, worker's compensation and income tax) on time. Remit the amounts owing. Don't have the money? Don't worry. I have a tip for you; just follow the country link you run your business from.

 

GOOD TO KNOW

Requirement of Law

By law, every business owner must keep a complete and organized set of books and records.

A good bookkeeping practice to start your set of books is to keep your business expenses separate from your personal expenses. (See the audit trail article to find out how.)

It’s a financial catastrophe in a tax audit if you have inadequate supporting documentation. Don't even consider not filing your return every year. That leads to costly late filing penalty charges. That would definitely not be considered good bookkeeping!

As a business owner, you are also legally required to collect and remit payroll sources deductions and GST/HST collected (or any sales and use tax). These funds do not belong to the owner and/or the corporation and should not be used to finance your business.

Simple Tax Compliance Method

... On Good Practices

  • Vehicle mileage log
  • Internal financial statements
  • Pay yourself regularly
  • Monthly bank reconciliation
  • Personal expense reports
  • Cash under the table transactions

If you keep your books solely for tax preparation purposes, tax experts suggest you establish this simple method to meet this requirement.

At the beginning of each calendar year, take an envelope (or file folder) and write on the front -- the year, the tax line number, and the expense name. Do this for every line you will be submitting a tax claim for.

Throughout the year, place all your corresponding business receipts in the appropriate envelope.

At the end of the yearrun a tape listing every receipt for each envelope. Write the total expense for that line on the outside of the envelope. Insert the tape in theenvelope.

If you want to have access to your information in the future, you could use a program such as QuickBooks like a calculator. Then instead of running a tape listing, you would print out a report for each expense line and place it in the envelope ... just setup a bank account called cash and be sure to enter all your sales through Sales Receipt and all paid bills through the cash account using Write Cheques. You won't have a set of books prepared in accordance with GAAP or ASPE, but you should have all the information you need to file your tax return.

Keep all envelopes pertaining to one tax year together in a box. If you are audited, you've got everything you need to support your return. It's not however the best way to implement good bookkeeping practices in your business.

Find other filing organization options if you want to use your records to help you run your business too.

Benefits of Good Bookkeeping Practices

Earlier I laid out what I think constitutes good bookkeeping practices. Let’s look at some of the benefits to you when good bookkeeping processes are in place. I’ll follow that up with a peek at the consequences of poor bookkeeping practices.

 

  • You expect more from your bookkeeping system than just being able to prepare your annual tax return and meet ongoing business taxes. You expect your time, effort and money to produce information for you to run your business.
     
  • There is no need to worry about money matters within your business because you know your system is providing accurate and timely data that you use regularly to run your business. You have a plan in place for when cash flow is tight. Because you are organized, you have time left over for a life outside your business.
     
  • Your bookkeeping system strengthens your decision making and improves your bottom line because you have developed a relationship with your bookkeeper and taken the time to learn what the numbers mean. You know your sales activity and gross profit. You know the major category of expenses that drive your business and review them regularly to ensure you are still on budget.
     
  • You are no longer frustrated by being in the dark about your finances. No more crossing your fingers and holding your breath that you have enough cash to run your business. Good bookkeeping puts you in control of your cash flow. You reconcile your bank and credit card statements every month. If you go into (preauthorized) overdraft at the bank, it is pre-planned and only short term.
     
  • You can and do pay your bills on time. You invoice your clients promptly and follow up if payment is not received on time. You can place your hands on source (original) documents whenever you need them. No hunting. No going through piles of paper on your desk. No rummaging in drawers full of unfiled receipts and invoices.
     
  • You have developed a routine that allows you to tame the paper jungle. You personally set time aside to do the books, or have help because there aren’t enough hours in the day for you to do it all. Once all your receipts and invoices are input, you practice not only good bookkeeping, but great management skills. How? You run reports to make sure there are no errors and that the reports make sense.
     
  • Your bookkeeping system is simple; the right size and fit for your business. You have a pretty fair overview of the accounting process and how it works. You use your customized reports to make business decisions, prepare budgets, and review your past history so you can forecast the future plans of the business.
     
  • You use your bookkeeping system to track your advertising and marketing dollars to sales. You monitor your overhead expenses ensuring they are not increasing faster than your sales. You use available reports to collect your accounts receivable, manage the payment of your bills, and keep an eye on your inventory levels.

 What is the downside to your business without good bookkeeping practices?

Many small business owners run into trouble because they do not keep adequate books and records. This can be expensive in the long term. It is for this reason that this group of taxpayer is most likely to get audited by the Canada Revenue Agency (CRA) or the Internal Revenue Service (IRS).

The CRA and IRS have developed their own databases to select returns to be audited. They will compare your tax return against known filers who have a verified history of non-compliance and against filers who have a proven history of compliance. If your return falls within the appropriate parameters, it will be flagged for an audit.

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Posted by: administrator ON Tue, October 3, 2017 at 7:07:06 am MDT    Comments (0)

A question I am often asked is "I have done my own small business bookkeeping throughout the year. I am now preparing my paperwork for year end. What information does my accountant need?"

Your accountant will need the following small business bookkeeping information packaged in an organized fashion. Some like to keep it all in a year end binder, others in a series of file folders.

Whatever your recordkeeping system, just make it organized so your accountant can easily find any information s/he is looking for. Whenever possible, it is preferable these days that the information and reports be placed in DropBox (or a similar service), delivered by encrypted mail such as eCourier, or on a CD in pdf format as opposed to paper copies.

So here is my accounting checklist:

  • if you are using computer software, a backup copy with password OR an invitation to your cloud software
  • trial balance dated for the last day of your previous fiscal year
  • trial balance dated for the last day of your current fiscal year
  • financial statements for the fiscal year (balance sheet dated last day of fiscal year, income statement for the fiscal period and a cash flow statement if you have it)
  • general ledger for the twelve month fiscal period
  • general journals for the twelve month fiscal period
  • source documents pertaining to the purchase, major repair, and sale of capital assets
  • include the original cost and net book value of capital assets sold along with the proceeds receivied upon dispostion of the asset.
  • source documents pertaining to incorporation, lease agreements, financial loans, insurance or any contracts you have entered into ... include payments dates and amounts so your accountant can determine if any adjusting entries need to be done
  • investment statements and credit card statements
  • bank statements for the year including returned cheques as well as the bank statement and cheque stubs for the first month of the following year
  • a cheque register would be helpful
  • a listing of all pre-authorized direct deposits and withdrawals on your bank and credit card statements
  • reconciliations for the bank, credit card and investment statements
  • aged listing of all accounts payable identifying any amounts in dispute
  • vendor rebates / gift certificates received and/or used from vendors, usually issued as bonuses due to high volume purchases
  • aged accounts receivable listing marking any doubtful accounts
  • listing of all customer deposits and / or prepayments outstanding
  • listing of any accrued liabilities
  • inventory listing
  • all government correspondence and tax forms filed with CRA this year including GST/HST reports, tax instalments, WCB and PST reports, prior year notice of assessment and income tax returns
  • all government grants correspondence or other financial assistance documents
  • payroll information and reports including PD7As, T4s and T4 summary 

 

If your accountant is also doing your taxes, s/he will also need your home office expense information and your auto log if you use your personal vehicle for business, along with a listing of all your auto receipts.

 

GOOD TO KNOW

How to organize your yearend bookkeeping paperwork for your accountant.

From the list below, you will see your accountant doesn't want to look at all of your receipts and invoices like your bookkeeper does. Why?

It is most likely that you have a notice to reader engagement, not a review or audit engagement. This means the accountant has not been engaged to review your paperwork.

You or your bookkeeper have processed all the paperwork and put it in a format your accountant can use. Your accountant will go through your small business bookkeeping reports, third party statements and government information reports submitted to CRA (or IRS). S/he will request additional backup from you when necessary.

You can see where this could lead to a problem if your bookkeeping or your bookkeeper's bookkeeping is poor quality ... it leads to problems during a tax audit.

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Posted by: administrator ON Tue, October 3, 2017 at 7:02:26 am MDT    Comments (0)

Bookkeeping Checklist
For When You Switch Bookkeepers

You have decided to switch bookkeepers and wonder if there is a bookkeeping checklist you could use to gather the information for your new bookkeeper. My answer is yes!

Your new bookkeeper will need the same small business bookkeeping information you were giving to your old bookkeeper ... plus a trial balance up to the last date your old bookkeeper did the books as well as a year-to-date general ledger. Pdf copies placed in DropBox (or similar service), delivered by encrypted mail such as eCourier, or on a CD are preferred over paper ... but paper still works.

Your bookkeeper will likely give you a client start-up bookkeeping checklist. It will probably look something like this:

  • expense receipts including internet receipts - sorted by source of payment: bank, credit card, business cash, and personal funds
  • documents pertaining to the purchase, major repair, and sale of capital assets
  • documents pertaining to lease agreements, financial loans, insurance or any contracts you have entered into.
  • investment statements, bank statements including deposit slips and returned cheques, credit card statements including card payment slips, vendor statements
  • a cheque register would be helpful
  • a listing of all pre-authorized direct deposits and withdrawals on your bank and credit card statements
  • vendor / supplier invoices both paid and unpaid
  • listing of accounts payable would be helpful - even if it is just your best guess
  • customer invoices and sales receipts issued including outstanding customer invoices
  • an accounts receivable listing would be helpful - even your best guess helps marking any doubtful accounts
  • listing of all customer deposits and / or prepayments received
  • inventory listing
  • all government correspondence and tax forms including GST/HST reports filed with CRA this year, notice of assessments, tax instalments, WCB and PST reports
  • payroll information and reports including new employee information, payroll reports, PD7As, T4s and T4 summary

The more organized your records, the less it costs to process them. Further up on the same page is a box with links to more tips on how to reduce your bookkeeping fees.

If you have all the above small business bookkeeping information completed and with you on your first visit, your new bookkeeper should be up and running quickly.

 

GOOD TO KNOW

How to organize your bookkeeping paperwork for your bookkeeper.

Your bookkeeper wants to see ALL your source documents pertaining to your business ... unlike your accountant. They need it to ensure they have recorded your business revenue and expenses properly.

The only thing bookkeepers really don't need are your personal receipts. Personal expenses should not be going through your business accounts.

If your bookkeeper (is that you?) doesn't have the knowledge to categorize your transactions properly ... you may be in big, Big, BIG trouble if you are ever audited.

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Posted by: administrator ON Tue, October 3, 2017 at 6:58:40 am MDT    Comments (0)

An RESP is a type of trust through which you can save for a child’s education. If you make contributions to such a plan, the amounts are not tax deductible, but the major advantage is that earnings accumulate on a tax-deferred basis. Also, when the funds are finally paid out to the child, the accumulated income earned in the plan (such as dividends or interest) is taxed in your child’s hands at his or her lower tax rate.

RESPs are often set up as family plans. This allows you to allocate the plan assets among related children or change the beneficiary of the plan to someone else in the family. Individual plans now have this same flexibility.

An RESP has a maximum life of 35 years and contributions can only be made until the beneficiary reaches 31 years of age. The contribution and termination period is extended by 10 years for beneficiaries who qualify for the disability tax credit.

To enroll your child in an RESP you must obtain a Social Insurance Number (SIN) for the child.

Contributions

There is no annual contribution limit and the cumulative ceiling is $50,000 for each beneficiary, regardless of the number of subscribers. Overcontributions are computed at the end of each month and are subject to a special 1% monthly tax. It’s possible to reduce overcontributions by withdrawing funds from an RESP.

Transfer to an RRSP or RDSP

If all intended beneficiaries have reached the age of 21 years, and the plan has been in place for at least 10 years, you can withdraw the principal and the income from the plan. If you have sufficient RRSP contribution room, you can transfer the RESP income to your RRSP (or a spousal RRSP). Any excess income that cannot be transferred to an RRSP will be subject to a 20% penalty tax, in addition to regular income tax.

For transfers after 2013, investment income earned in an RESP can also be transferred on a tax-free basis to an RDSP provided the plans share a common beneficiary.

The total RESP income that you can transfer to an RRSP is subject to a lifetime limit of $50,000.

Canada Education Savings Grants (CESGs)

The federal government pays a subsidy for each child that is a beneficiary of an RESP from the day the child is born until his/her 17th birthday.30* The current annual maximum CESG per beneficiary is $500 (i.e., 20% of the first $2,500 of contributions paid annually). Each child is entitled to a cumulative limit of $7,200.

A family that did not contribute to its child’s RESP for a year or more can receive a grant of not more than $1,000 as a CESG in a year (i.e., on a maximum contribution of $5,000).31

The maximum annual grant on the first $500 contributed per child is increased slightly for low- and mid-income families.

An RESP will be required to repay CESG money in certain situations, such as when a beneficiary does not pursue higher education or the plan is terminated.


30 Contributions for a child aged 16 or 17 will receive a grant only if certain conditions are met.
31 For more information see: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/resp-reee/cesp-pcee/csg-eng.html.

Canada Learning Bond (CLB)

Under the Canada Learning Bond (CLB) program, every child is entitled to assistance, provided the family receives the National Child Benefit (NCB) Supplement. An initial $500 bond is provided in the year of the child’s birth with subsequent annual instalments of $100 until the age of 15 for each year the family is entitled to the NCB supplement.

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Posted by: administrator ON Sun, April 9, 2017 at 1:31:31 pm MDT    Comments (0)

Transfers to a spouse or common-law partner

All capital properties, such as shares in companies and real estate, are automatically transferred between spouses or common-law partners on a tax-free basis. If you want the transfer to take place at FMV, you must file a special election requesting this treatment when you file your tax return for the year of the transfer.

When the transferred property is eventually sold to a third party by your spouse or common-law partner, you’ll have to report any capital gain or loss realized on the sale unless all of the following conditions are met. First of all, your spouse or common-law partner must have paid FMV for the property at the time of the transfer. You must also have made the FMV election (as noted above), and sufficient annual interest on any unpaid purchase price must have been paid in full no later than January 30 of the following year. If all of these conditions have been met, any subsequent capital gain or loss realized on a sale to a third party can be taxed in your spouse or common-law partner’s hands (rather than in your hands).

Example: In June 2016, you decide to transfer your shares of XYZ Co. to your spouse. You acquired the shares in 2000 at a cost of $1,000 and they have a current FMV of $6,000. For tax purposes, your spouse will be deemed to have acquired the shares from you at a cost of $1,000. Therefore, you won’t recognize a capital gain or loss on the transfer. However, you’ll be taxed on any capital gain or loss that results when your spouse disposes of the shares (based on an original cost of $1,000).

Alternatively, by attaching a note to your tax return, you may elect to have the transfer to your spouse take place at FMV. As a result of making this election, you’ll report a capital gain of $5,000 and your spouse will be deemed to have acquired the shares from you at a cost of $6,000. If your spouse paid you $6,000 for the shares (say, by way of a loan from you) and the shares are subsequently sold for $8,000, the $2,000 gain would be taxable in your spouse’s hands—provided your spouse pays a reasonable rate of annual interest on the loan within the required time period.

Special rules apply in situations where the property has been transferred between spouses or common-law partners as part of a property settlement or where the couple is separated when the property is sold to a third party.

Tax tip: With current interest rates at fairly low levels, you might want to consider an income-splitting loan to your spouse or common-law partner. The attribution rules won’t apply if you are paid interest on the loan at the prescribed rate in effect at the time the loan is made. For example, the prescribed rate in effect for the third quarter of 2016 is 1%. This rate will remain in effect for as long as the loan is outstanding—even if rates increase in the future.

In implementing any income-splitting strategy, you have to be careful if you want to avoid the attribution rules. In situations where property is transferred to your spouse or common-law partner, attribution can apply to both income and capital gains. Contact your tax adviser to discuss the steps you need to take to accomplish this or other income- splitting strategies.

Transfers to other family members

A transfer of capital property to other family members is taxed just as if you sold the property at its FMV. If the property has been transferred to a child, grandchild, niece or nephew, you must continue to report any income earned on such property after it has been transferred—such as interest or dividend income—until the child reaches 18 years of age. After 18, attribution no longer applies and that individual must report the income. Capital gains, on the other hand, do not have to be attributed to you (regardless of the age of the child). This can be a useful income-splitting tool. However, make sure that any capital gain realized by a minor child is not subject to the “kiddie tax” rules

Tax tip: Unless the person receiving the property is your spouse or common-law partner, there is no requirement to attribute capital gains to you, the transferor. Consider buying in the names of your children capital property (such as equity-based mutual funds) with a low yield but high capital gains potential. The income will be attributed to you, but any future capital gains will be taxed in your children’s hands.

Tax tip: The deemed cost base of property received as a gift or inheritance is its FMV at the time of transfer. However, if you charge a nominal amount for the transfer of property— for example, $10—you’re deemed to receive FMV for the property, but the recipient’s cost base remains at $10. Therefore, it’s better to gift property than to charge a nominal amount, since the recipient will receive the full increase in the cost base.

Interest-free loans to family members

Caution should be exercised if you provide low-interest or interest-free loans to family members, either to enable them to purchase income-producing assets or as consideration for the transfer of assets. If one of the main reasons for the loan is to reduce or avoid tax, you must report any income earned on the property, regardless of the age of the loan recipient. An outright gift to a child who is 18 years or older—or anyone other than a spouse or common-law partner—is not subject to this rule.

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Posted by: administrator ON Sun, April 9, 2017 at 1:29:45 pm MDT    Comments (0)

You may qualify for the northern residents deduction if you lived in a prescribed area in northern Canada (northern or intermediate zone) on a permanent basis for a continuous period of at least six consecutive months commencing or ending in the taxation year for which a return is being filed. The deduction is claimed by filing Form T2222 with your return. You can review the CRA publication T4039, “Northern Residents Deduction— Places in Prescribed Zones,” to determine if you live in a prescribed northern or intermediate zone.

There are two deductions you may be able to claim:

1. A residency deduction for living in a prescribed zone
2. A travel deduction for taxable travel benefits you receive from employment in a prescribed zone

Residency deduction

If you live in a prescribed northern zone, you can claim $11 ($8.25 in 2015) for each day in the taxation year that you lived there and an additional residency amount of $11 ($8.25 in 2015) per day if you’re the only person in your household claiming the residency deduction. If you live in an intermediate northern zone, the residency deduction is half the above amounts.

The residency deduction is reduced by the non-taxable benefit for board and lodging at a special work site (box 31 of your T4 slip, or from the footnotes area of your T4A slip) and is limited to 20% of your net income.

Travel deduction

Subject to certain limits, you can also claim a travel deduction to the extent the value of travel benefits is included in your income from employment. This amount is reported in box 32 or 33 of your T4 slip, or box 28 of your T4A slip.

This deduction applies with respect to all trips made by you or a member of your household for the purpose of obtaining necessary medical services not available locally. It also applies to a maximum of two trips per person made by you or a member of your household (e.g., for vacations).

The maximum travel deduction you can claim cannot exceed the taxable travel benefits you received from your employer. The deduction for an employee in the intermediate zone is 50% of the amount that would be calculated for an employee in the northern zone.

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Posted by: administrator ON Sun, April 9, 2017 at 1:28:14 pm MDT    Comments (0)

Medical expenses

You can claim medical expenses paid for yourself, your spouse or common-law partner and certain related persons  Generally, subject to the comments below for other dependants, total eligible medical expenses must first be reduced by 3% of your net income or $2,237, whichever is less. The tax credit is 15% of the amount remaining.

Tax tip: Select your 12-month period to maximize the tax credit. The 12-month period ending in the year may vary from year to year, but you cannot claim the same expense twice. Keep your receipts for next year if some of your 2015 expenses are not claimed as a credit in 2016.

Eligible expenses

The list of eligible medical expenses is extensive and includes

  • payments to medical practitioners, dentists or nurses, or to public or licensed private hospitals in respect of medical or dental services;
  • additional costs related to the purchase of non-gluten food products;
  • expenses paid for training courses for a tax payer or a related person in respect of the care of a person with a mental or physical impairment, who lives with or is a dependant of the taxpayer;
  • cost of purchased or leased products, equipment or devices that provide relief, assistance or treatment for any illness;
  • cost of blood coagulation monitors for use by individuals who require anti-coagulation therapy, including pricking devices, lancets and test strips;
  • premiums paid to private health insurance plans;
  • expenses incurred after 2013 for specially trained service animals that assist individuals with severe diabetes;
  • remuneration for tutoring persons with learning disabilities, or other mental impairments, if the need for
    such services is certified by a medical practitioner; and
  • reasonable supplemental expenses for the construction or renovation of a residence to enable a person with a serious, prolonged handicap to have access to this residence, to move about therein and to carry out activities of daily living.

For 2014 and later years, the list of eligible medical expenses was expanded to include amounts paid for the design of an individualized therapy plan, where the cost of the therapy itself would be eligible for the credit and certain other conditions are met. In particular, the plan must be designed for an individual who qualifies for the disability tax credit.

Medical expenses of dependants other than a spouse or common-law partner

Subject to special rules, you may also claim medical expenses you have paid for a dependant. In general, a “dependant” is a person who is dependent on you for support at any time in the year, and who is the child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew of you or your spouse or common-law partner.

Claims for the medical expense credit for minor children are grouped with claims for you and your spouse or common-law partner. Medical expenses paid for other dependant relatives must first be reduced by 3% of that dependant’s net income, to a maximum of $2,208 in 2015.

Tax tip: If you pay medical expenses for a dependant other than your spouse or common-law partner or minor child, the ability to claim a medical expense credit is based on the dependant’s net income, not your own. As a result, even limited payments can qualify where the dependant’s income is quite low. Don’t forget to claim these amounts when you file your tax return.

Refundable medical expense credit

Eligible individuals who have business and/or employment income of at least $3,465 may be able to claim a refundable medical expense supplement. The refundable credit is 25% of medical expenses that qualify for the regular medical expense tax credit, up to a stated maximum. It’s reduced by 5% of the taxpayer’s (and spouse or common-law partner’s) income in excess of a specified amount ($26,277 per family). This credit is in addition to the tax credit for medical expenses. The maximum refundable medical expense supplement is $1,187 for the 2016 taxation year.

What you cannot claim as medical expenses

Many items do not qualify as medical expenses—for example, non-prescription birth control devices, drugs and medications that you can purchase without a prescription, funeral and burial costs, and gym memberships, to name a few. In addition, you cannot claim medical expenses for which you are reimbursed or are entitled to be reimbursed. Amounts paid for purely cosmetic procedures (including related services and other expenses such as travel) are not eligible for the medical expense tax credit unless they’re required for medical or reconstructive purposes.

Attendant care in a retirement home

In general, payments made to a nursing home or long-term care facility qualify for the medical expense tax credit, provided the individual meets all the criteria to claim the disability tax credit. The issue has been less clear with respect to amounts paid to a retirement home. However, it is the CRA’s position that seniors who live in a retirement home and are eligible for the disability tax credit can claim attendant care expenses as medical expenses. The maximum amount that can be claimed under this provision is $10,000 per year ($20,000 in the year of death).

To make the claim, you must have a receipt from the retirement home showing the portion paid for attendant care and be eligible for the disability tax credit.

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Posted by: administrator ON Sun, April 9, 2017 at 1:27:15 pm MDT    Comments (0)

Source: http://business.financialpost.com/personal-finance/young-money/heres-why-millennials-might-actually-better-off-than-their-baby-boomer-parents

Millennials have better job prospects than their parents ever did, at least according to a new report that says the tech-savvy nature of the country’s largest cohort will serve it well.

Laura Cooper, an economist with Royal Bank of Canada, looked at the future for Canada’s 9.8 million millennials and she says they are in “the driver’s seat” and will dominate Canada’s future in the same way that baby boomers did before them.

“Canadian millennials have inherited a labour environment in many ways better than that of their parents,” writes Cooper, who cites rising female participation in the workforce, increasing educational attainment and narrowing of wage differential between millennials, aged 20 to 34, and people of prime working age as trends now emerging.

The economist, who says much of the focus on millennials has pointed to a tough job market and high house prices, believes the rise of computers, the Internet and then smartphones coincided with the early years of that cohort and will serve them well in the future.

“For this generation, communicating through mobile devices and social media, engaging in e-commerce and consuming and producing digital content are second nature,” Cooper says. “These abilities ensure they will have a significant impact on the evolution of Canadian economic activity.”

Cooper says millennial youth are pursuing more education, which is contributing to a larger share of them working part-time. In 2015, 35 per cent of 20- to 24-year-olds in Canada worked part-time, versus 10 per cent in 1979.

On the full-time front, it may appear millennials have less job security, but they actually appear to change jobs about as frequently as baby boomers. On average, millennials stay at a full-time job 19 months, which compares with 21 months for baby boomers back in 1979. Millennials hold part-time jobs 17.5 months on average versus 15 months for baby boomers in 1979.

“These figures suggest that the path to establishing a career isn’t that much different for millennials. Notably, the unemployment rate for 20 to 24 year olds was 10.4 per cent in both 1979 and 2015,” Cooper says.

Canadian millennials have inherited a labour environment in many way better than that of their parents

The economist also points out millennials have turned to entrepreneurship, with the share of self-employed 15- to 24-year-olds doubling over the last two decades. The proportion of all start ups owned by someone under the age of 30 reached nine per cent in 2014.

Millennial women also are poised to benefit from a more level playing field as they begin to comprise a greater share of graduates with STEM (science, technology, engineering and mathematics) degrees compared to previous generations. In science and technology, 59 per cent of degree holders are female. Nevertheless, in 2015 Canadian women still earned 87 cents for every dollar earned by a man.

Cooper also notes millennial family dynamics have changed, with only 31 per cent of the cohort married or living in common law patnerships in 2015, down from 44 per cent for baby boomers in 1970. The average age of a woman giving birth to her first child has increased by two years over the past three decades, which has helped shrink the average family size to 3.0 in 2016 from 3.3 in 1981.

While policy makers worry about the impact of high prices, millennials are actually buying more than predecessors because of low rates. Home ownership among 20- to 34-year-olds was 47 per cent in 2011 versus 45 per cent in 1981.

Finally, Cooper says millennials are the most ethnically diverse generation Canada has ever seen, adding that different perspectives of individuals from diverse backgrounds can encourage innovative thinking and provide broader networks for relationships.

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Posted by: administrator ON Sun, April 9, 2017 at 1:07:33 pm MDT    Comments (0)

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Danielle's SOS Bookkeeping Services Provides Corporate Accounting, Full Cycle Corporate Tax, Small business tax planning, Personal Tax & Bookkeeping Services to the following areas:

Edmonton, Leduc, Wetaskiwin, Fort Saskatchewan, Spruce Grove, Sherwood Park, Stony Plain, Devon, Beaumont, and all rural areas in and around Edmonton.

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