The American Council on Science and Health (ACSH) gave an official kiss goodbye to the notion that roses are toxic to consumers, as it listed the myth as No. #6 on its "Top Ten of Unfounded Health Scares”

#6 - Roses Are Toxic

The (Unfounded) Scare: Valentine’s Day flowers shipped into the U.S. from Colombia were doused in an assortment of chemicals including pesticides and fungicides. Colombia is the second largest exporter of flowers in the world, with exports around $1 billion dollars worth of cut flowers every year. The United States gets 62 percent of all its flowers from Colombia, which gave this topic great scare potential.

Origin of the Scare: Although flowers are required to be bug-free before entering the U.S., they are not required to be clear of chemical residues as are edible imports such as fruits and vegetables. Because Colombia flower exporters did not have to rid the flowers of chemical residues, there were claims that using pesticides and fungicides was “encouraged.” These chemicals that can sometimeS remain on imported flowers have been shown to cause cancer and neurological disorders in high-dose animal experiments.

Media Coverage: Media coverage of toxic flowers came out just in time to scare those eager to exchange flowers for Valentine’s Day. An AP release was picked up by major news websites, including USA Today and Fox News. Although the real story was that pesticides on flowers could potentially be hazardous to workers, the media aimed for the hearts of consumers with headlines such as “Valentine’s Roses Get Dipped In Chemicals” and “Not-So-Nice: Valentine’s Day Highlights Problem of Toxic Chemical-Doused Flowers.”

The Bottom Line: There is no evidence showing that exposure to pesticides at trace levels causes any adverse health effects. High doses of the chemicals can pose a threat, and therefore it is important that the safety of workers is made a top priority. However, there is no evidence of low-level exposure to pesticides causing cancer or other health problems. Without these chemicals, the Colombian flowers would be vulnerable to pests and turned away at the border, which would lead to unnecessary economic hardship for those who make their living from the flower business.

Set the record straight for Valentine's Day 2008.
 

Window displays, used by two-thirds of retail florists, was the Number 1 means used to promote Valentine's Day in 2007, as it was in 2006.

This was followed by indoor signage, posters and displays, used by 60 percent of businesses and outdoor signage, used by just over half of all florists (51 percent).

Outdoor signage included letterboards, readerboards, signboards, marquees, and billboards. Rounding out the top-five methods were advertising in newspapers and magazines (45 percent) and statement stuffers and mailers (44 percent). Other techniques, used by fewer florists (not shown) were Web site promotions (36 percent), online advertising (27 percent), e-mail promotions (26 percent), radio advertising (24 percent), direct mail (17 percent), public relations (14 percent) and TV advertising (5 percent).

Source: Zoomerang Survey (post Valentine’s 2007)
 

Part 1: Business Tax Reductions That Affect Canadian Small Businesses

What are the two topics at the top of every Canadian small business's complaint list? Taxes and paperwork. The federal government is working on making both of these perennial thorns less irritating with the introduction of "substantial" tax reduction measures.

Any business tax reduction is a good thing and is especially good about this package of business income tax changes for 2008 is that there truly appears to be something for everyone. It may or may not be substantial, but every small business should see some benefit from these tax reductions, either by paying less income tax or by having less paperwork to do.

Here's a list of the Canadian federal government's 2008 income tax changes that may affect your business taxes in 2007 and 2008

1.Corporate Income Tax Reduction

Effective January 1, 2008 the corporate income tax rate falls to 19.5% from 22.5%. Yearly tax reductions will see the corporate income tax rate fall to 15% as of January 1, 2012. These corporate income tax reductions, says the Department of Finance Canada, will give Canadian corporations the lowest tax rate on new business investment in the Group of Seven (G7) by 2011 and the lowest statutory tax rate in the G7 by 2012 (CNW Group Press Release, December 28, 2007).

2. Small Business Tax Rate Deduction

Another 2008 income tax change that applies to incorporated businesses is the decrease in the small business tax rate, which falls to 11% from 13.12% as of January 1, 2008. The small business tax rate is the federal tax rate that applies to the first $400,000 of active business income of a qualifying Canadian-controlled private corporation.

3. Changes in Capital Cost Allowance Rates

In an attempt to make the Capital Cost Allowance (CCA) rates better match the length of time business assets actually last, the federal government has made several changes to the Capital Cost Allowance system. Computers and buildings are the two particular types of assets affected by Capital Cost Allowance rate changes that will affect the income taxes of most small businesses. The new CCA rates apply to assets acquired on or after March 19, 2007.

·    Buildings used for manufacturing or processing:
New CCA rate: 10%
Old CCA rate: 4%

·    Other non-residential buildings:
New CCA rate: 6%
Old CCA rate: 4%

·    Computers:
New CCA rate: 55%
Old CCA rate: 45%

Note that there are some catches to applying the new Capital Cost Allowance rates to buildings. The new rates are offered as an additional allowance. In order to be eligible, a building must be placed in a separate class and "at least 90 per cent of the building (measured by square footage) must be used for the designated purpose at the end of the taxation year" (Budget 2007, Annex 5: Tax Measures: Supplementary Information).

There do not seem to be any such restrictions on applying the new CCA rates to computer equipment.

4. Temporary Incentive for Manufacturing and Processing Machinery and Equipment

The federal government is trying to encourage manufacturing by providing a temporary incentive that allows manufacturing businesses to write off their capital investments in machinery and equipment faster by using a special two-year 50% straight-line Capital Cost Allowance rate. This incentive applies to eligible machinery and equipment purchased on or after March 19, 2007 and before 2009.

Currently the CCA rate for such equipment would be 30%. Now it's not quite 50% off a year because of the half-year rule (which limits the CCA claim in the year an asset is acquired to one-half of the normal CCA deduction). So in year one, the deduction rate would be up to 25% (half of 50%), in year two up to 75%, and in year three, up to 100% (less any deductions claimed for previous years).

Businesses will also benefit from the 2008 tax changes that govern who has to make tax installments and how often.

Part 2: Changes to Tax Installments for Canadian Small Businesses

Another very positive tax change for 2008 is the federal government's concerted effort to cut down on the amount of tax-related paperwork that Canadian businesses have to file (starting with the 2008 tax year).

In Budget 2007, the Department of Finance Canada says that the proposed 2008 tax changes will reduce the filing and remitting requirements of more than 350,000 small businesses by, on average, about one-third - a meaningful reduction when you realize that, as they say in the same document, that currently "depending on the amount of its payroll, sales and income tax liability, a small business could have 34 remittance and filing requirements in these areas per year."

5. Reducing Tax Installment Frequency

For corporations, the installment threshold will triple from $1000 to $3000, so that corporations will not have to pay corporate income tax by installment unless their total tax liability is more than $3000.

Small Canadian-controlled private corporations (CCPCs) that are required to pay tax installments may make those tax installments quarterly rather than monthly if they meet certain conditions, such as having a taxable income for either the current or previous year that does not exceed $400,000 and having qualified for the small business tax deduction in either the current or the previous year.

For self-employed individuals (sole proprietorships and partnerships), the personal income tax installment threshold increases to $3000 from $2000.

The instalment thresholds for remitting source deductions and for GST/HST will also change, starting with the 2008 tax year.

For employers, the tax instalment threshold rises to $3000 from $1000, so employers with a perfect compliance history whose average monthly withholding amount for either of the two preceding calendar years is less than $1,000 will be able to pay by quarterly installments rather than monthly.

For GST/HST registrants, the taxable supplies threshold triples to $1,500,000 from $500,000; so businesses than have taxable supplies that do not exceed $1,500,000 in a fiscal year file an annual GST/HST return and make quarterly installment payments. The net tax threshold is also changing, increasing to $3000 from $1500, giving small businesses more of a chance of only having to make one annual tax remittance.

2008 Tax Changes to Personal Income Tax Will Also Benefit Small Businesses

If your business is a sole proprietorship or partnership, you will also be cheered to hear that the personal income tax rate is reduced to 15% (as of January 1, 2007) and the basic personal amount increases to $9,600 for 2007 and 2008.

Every Canadian small business will benefit from these business tax reductions one way or another. How much benefit your small business sees from them will depend on your individual situation. As always when it comes to taxes, it is recommended to discuss the full ramifications of how these 2008 income tax changes will affect your particular business with your accountant.

ONTARIO
Not Your Normal Holiday - "Family Day" Creating Confusion for Retailers
Shortly after the recent provincial election, Family Day was proclaimed as a new statutory holiday in the Province of Ontario. Family Day is to be held on the third Monday of every February, beginning in 2008. This year, the holiday falls on Monday, February 18

NOVA SCOTIA
Member Notice: Nova Scotia Compassionate Care Leave
Definition of Family Member Broadens on January 17, 2008
Under the Labour Standards Code, employees can take a compassionate care leave if they have been employed for at least 3 months and have to take care of a seriously ill (a high risk of death within 26 weeks) family member. They are eligible for up to eight weeks of unpaid leave from work.

BRITISH COLUMBIA
Minimum Wage Increase Possible for British Columbia
Members Asked to Provide Thoughts on Potential Increase
For the past several months, there has been significant discussion in the media and at the political level in B.C. about increasing the province's minimum wage. The opposition NDP, along with the B.C. Federation of Labour, is calling for an increase from $8 to $10 per hour. Thus far, the provincial government has not expressed any interest in raising the minimum wage, but that may change as the next provincial election draws closer.

Flowers Canada Retail is interested in your comments. Please send feedback to flowers@flowerscanada.org
 

What will Family Day mean for local businesses?

For most, it will mean lights out for a day, and that's not sitting well with some merchants.

Family Day is now one of nine statutory holidays in Ontario on which most retailers are required to close.

The Retail Business Holidays Act requires most retail businesses to close on nine days - New Year's, Family Day, Good Friday, Easter Sunday, Victoria Day, Canada Day, Labour Day, Thanksgiving and Christmas. Although widely observed in Ontario, the August civic holiday is not a statutory holiday under the Retail Business Holidays Act.

Like the other holidays, there will be "limited exceptions" for some retail outlets to remain open on Family Day. Drug stores, gas stations and convenience stores are among the exceptions.

JoAnn Langstaff, the owner of Jay-Gee Shoes and Clothing, said she finds it hard to believe the government expects retailers to close for a day at an already slow time of the year.

"It's absolutely ridiculous," she said. "February's a short month. We can all live through it."

Ciaran Ganley, manager of issues management and media relations with the Ministry of Government and Consumer Services, said the holidays act "strikes the appropriate balance between allowing businesses to remain open and providing employees and consumers with a common day of pause."

Stores may remain open in certain locations if they are designated as tourist areas through specific municipal by-laws, Ganley said.

The Ontario Chamber of Commerce  has expressed concerns about the costs that will be incurred by businesses as a result of the holiday. Estimates of the cost of the new statutory holiday range from $500 million to $2 billion.
 

Online sales for the 57-day holiday season, from Nov. 1 to Dec. 27 were up 19 percent from the corresponding days last year, according to comScore, Inc. Total online sales were $27.96 billion in 2007 compared to $23.56 billion in 2006. The gain of 19 percent compared to an increase of 26 percent last year. For the entire holiday period through Dec. 31, online sales totaled $29.17 billion, also up 19 percent.

On the day after Christmas, Web sales more than doubled from a year ago as consumers took advantage of deep discounting and post-holiday promotions. During the core holiday period, the 32 days between Thanksgiving and Christmas, online sales were up 21 percent from the 31-day corresponding period a year ago.

"Green Monday" (Dec. 10) was the No. 1 online shopping day of the year, with sales exceeding $881 million. The oft-noted "Cyber Monday" (Nov. 26) ranked 9th.

Overall retail sales are expected to show a 3.6 percent gain for the holiday season, as a late season push for the week ending Dec. 29 saw sales up 14 percent compared to a year ago, according to the National Retail Sales Estimate compiled by ShopperTrak RTC Corp. It found foot traffic to stores was up 6.9 percent versus a year ago.

The International Council of Shopping Centers predicts sales for November-December grew about 2.2 percent, just below its original prediction of 2.5 percent growth in same store sales. A spokesperson for the organization expressed hope that stores could recoup sales as consumers spent their gift cards and continued to purchase discounted merchandise this post-Christmas season.
 

Flower production could overtake coffee production as the "driving force in the Ethiopian economy," according to a recent Agence France Presse (AFP) story.

The article, picked up by at least one U.S. media outlet, Yahoo News, explored the country's growing floriculture segment and implications of that growth on other industries: Ethiopian officials expect to earn $125 million-plus from flower exports in 2007, a "five-fold increase" over the previous year. By comparison, coffee exports pulled in $421 million in 2006.

"By developing 70,000 hectares (173,000 acres) of land for vegetables and fruits, as well as another 4,500 for flowers, we can anticipate a major increase in production," Tsegaye Abebe, the head of the Ethiopia Horticultural Producers and Exporters Association, said to AFP. (E-Brief editors contacted Abebe for further comment but he was not available at press time.)

Government support, in the form of tax exemptions and long-lease arrangements on farms, is helping to fuel the growth and new, private farms are taking shape, particularly in Holeta, "one of Ethiopia's flower heartlands," according to the story.

"There is a thriving flower industry in this country ... the climate, cheap labour and production costs have appealed to growers from many countries," Dhairyasheel Shinde, manager of Ethiopian-Indian flower firm, Holeta Rose, said to the AFP.

This isn't the first time Ethiopian floriculture has caught the attention of the international press. Last spring, The New York Times profiled the country's growing industry, which still faces challenges such as insufficient labor and a lack of cooling facilities.

So far, the growth of Ethiopian flower production appears to have little direct effect on the U.S. industry. Responding to The New York Times story in April, Red Kennicott, of Kennicott Brothers in Chicago explained: "I am sure that we are getting some via Dutch exporters, [but the] African rose size is smaller than what most USA florists want. Logistics to USA [also] are difficult and large orders are required to achieve efficiency. It is not an item for us at this time."

Kevin Priest, of The Cleveland Flower Co. agrees: "So far, we have not used roses grown in Ethiopia," he says. "We did try roses from Kenya but we were not satisfied with the quality compared to our normal sources (Colombia, Ecuador and California)."