Secwepemc L.I.F.E. Newsletter Issue 10

Part II: Words of Advice from an Indigenous Business Owner

By Julie John

What they do not teach you in business school

One area that I struggled with in the REAL world of running my own business was after I was done school and left on my own! I had no clue about the government, applying for and paying GST/PST, applying for and paying source deductions, etc. I do not recall being taught about this stuff when I was in school. Yes, I learned about accounting, reading reports, budgets, stats, and economics but not about the government.

GST/PST got me into a lot of debt. I did not know that once you reach a certain amount in your business ($30,000 a year) then you must apply for GST/PST. I did not know that once you applied for GST/PST you must start remitting and paying the government. To pay these bills, you need to be making a profit/revenue in your business. As a solopreneur drowning in debt, I did not have money to pay. I was choosing which bills to pay each month because I was not creating enough revenue to pay for all the bills. And as I hid away, doing my best to avoid this issue, I did not know it was adding up because I was not doing any remitting. Source Deductions, same thing. I registered for source deduction to pay employees, to have staff. One thing to pay them, another to have to put money away for their source deductions on top of their wages. What do source deductions consist of? Canada Pension Plan (CPP) Contribution, Employment Insurance (EI) Premiums, Federal, Provincial, or territorial income tax. After I closed my giftshop, I failed to close all these accounts with the government and did not know I had to.

And to close these accounts, they must be paid in full. Because I just left it, these accounts kept piling up debt each month. To the point, my personal bank accounts were frozen because I owed GST. I had to scramble to get this paid because all my payments and deposits were done through my bank account. This was so scary, and again embarrassing. I did manage to beg and borrow to get this paid off so I could access my bank accounts and not incur further debt with NSF. With the PST, my payments kept adding up each month and I had no clue. Plus, I chose to ignore it because I had no money to pay. I had over $30k to pay back and this freaked me out. When I finally mustered up enough courage to deal with this situation, I spoke to the nicest person on the other side who helped me out tremendously. She guided me toward what I needed to do to deal with my account.

I had to submit zero remittance for each month after I closed my shop. I submitted for each month, and at the end of the day, she sent me a new invoice to the amount of $81 or something ridiculously low. I rushed to the bank and paid in full. What a HUGE relief. It was a huge weight off my shoulders and I laughed at myself. I lived in fear of this for the past 3 years, when I finally faced it, it was not even as bad as I thought it would be. In my mind, I seriously thought I would go to jail or something.

So, my advice to you, if you do not already know, add GST/PST and Source Deductions into your budget. Hire a bookkeeper to help you out if you need help. As a young entrepreneur, first starting off, I wish I had known I can ask for help instead of trying to do it all on my own. But one of my greatest lessons with debt, is to just deal with it! Do not hide under the covers hoping it will go away because it will not. Do not live in fear and anxiety, pick up the phone and start planning to pay down your debt, and at the same time fix your credit.