WageFest 2026 Session Transcript

Oct 26, 2026 · @Eric

• Session: The Quiet Pay Cut, Why paying yourself first is a cash flow decision
• Event: WageFest 2026 (online), SMB Business Track, October 22, 2026
• Host: Jenna Hart Rachiele, Small Business Team, Wagepoint
• Presenter and moderator: Eric Saumure, CPA, CA, Principal, Zenbooks
• Panel: Chantal Mercier-Ouellette, Licensed Insolvency Trustee, D. & A. MacLeod Company Ltd.; Amin Torfe, Account Manager, Small Business, TD; Yannick Lemay, Senior Tax Training Specialist, H&R Block Canada
• Length: 58 minutes

This transcript has been lightly edited for clarity and length. Filler words, false starts and event logistics have been removed, and audience members are not named. Editor's notes appear in square brackets. Timestamps refer to the session recording.

Welcome and introductions

Jenna Hart Rachiele, Wagepoint [00:10]: Thank you for joining, and welcome to the SMB Business Track. I'm Jenna Hart Rachiele, I'm part of the small business team here at Wagepoint, and I'm your host for this session. Please put your questions, your hellos and your takeaways into the chat, and we'll make sure your questions get added to the Q&A. Everything is being recorded, so if you miss a moment, you'll be able to access all the recordings at the end of the event. To qualify for CPD hours, you do need to watch the full session.

I come from a family of small business owners myself, and I know that when we have a rough month, it's often the owner who loses out on pay. This session is about why that happens, what to do about it, and how paying yourself first is really a cash flow decision.

We have Eric Saumure here, a CPA, CA and the principal at Zenbooks, an Ottawa-based, advisory-led fractional finance team that works with more than 300 Canadian small and mid-sized businesses. He created the Zenbooks Financial Clarity Index, an annual national benchmark of how well Canadian owners understand their own numbers. Eric is going to open with those findings, and then he's joined by a panel.

Chantal Mercier-Ouellette is a Licensed Insolvency Trustee at D. & A. MacLeod Company, with nearly three decades of experience in financial restructuring. Amin Torfe is an account manager for small business banking at TD, where he works with owners on cash flow, financing and everyday banking. And last but not least, Yannick Lemay is a senior tax training specialist at H&R Block Canada and the company's resident expert on T2 corporate income tax. With that, I'll pass it over to Eric.

The data

Eric Saumure, Zenbooks [03:31]: Thanks for having me, Jenna. If you caught Alex's session earlier, he talked about the walls we hit and the moments we talk ourselves out of things. I want to talk about one of those moments that almost no one talks about out loud. We're going to go through the data, then a panel of professionals will tell us what they see in their own practices.

Before I say much else, there's a poll going up on your screen. It's anonymous, so you can answer honestly. The question is: in the last 90 days, did you hold or delay your own pay?

While the results come in, here's what I see day to day. A month goes badly. The owner doesn't call a meeting. They send a quiet note to whoever runs payroll: "Just hold mine, just this time." No explanation. The staff don't need to know. Often their spouse doesn't know. The payroll person is usually the only one who sees it.

This year, we decided to measure how often this happens across Canada. I'm Eric Saumure, a CPA and principal at Zenbooks. We ran the Zenbooks Financial Clarity Index, a survey of 565 Canadian business owners, and weighted the data to Statistics Canada by region, size and sector. I'll take ten minutes to show what we found, and then our three professionals will join us: the Licensed Insolvency Trustee, the banker and the tax specialist.

The first finding: 27.6% of business owners delayed their own pay in the last 90 days. That's more than one in four. Among the owners who delayed their own pay, they delayed themselves three times as often as they delayed vendors or CRA.

Let me find the poll results. For our room today, 32.3% have delayed their own pay, so this room is even higher than the national average. Maybe there's some selection bias: anyone who feels they should be in this session is here.

[Editor's note: the live session polls were anonymous and self-selected. They are not a representative sample and are not directly comparable to the weighted national survey.]

What we saw is that when money runs short, the owner pays themselves last. And this isn't limited to very small businesses. Businesses with more than $1 million in revenue delayed their owner's pay at a 19.7% rate.

E-commerce had the widest gap. E-commerce owners delayed their own pay at a rate of 35.5% in the last 90 days, while only about 10% delayed their vendors, and the same for CRA. This next part is my hypothesis, not the data: as an e-commerce owner, you're so reliant on your vendors. If you don't have stock and good supplier relationships, you don't have a business. So you pay them, you treat them well, and your own pay comes last.

Owners who delayed their own pay scored 46.7 on our index, which measures from 0 to 100 how well owners understand their own finances. Those who didn't delay scored 60.5. So there's a clear association: if you're skipping your own pay, you also tend not to see your finances clearly.

Here's why it happens. Vendors will call you. CRA will charge you interest. Your staff won't stay if you don't pay them: if they don't get their paycheque on Friday, they're not in on Monday. The owner's draw is the only line where nothing happens when you skip it. Nobody knows, and the owner absorbs the bad month. That makes a delayed paycheque a cash flow signal, not a compensation decision, and I think Yannick will be able to speak to that from a tax perspective.

Interestingly, planning is not the problem. Owners with a written budget delayed their own pay at the same rate as owners without one. You can't out-budget your way into paying yourself.

What does matter is cash. Owners with no cash reserves in the business delayed their pay at 62%. Owners with more than six months of reserves were at about 8.5%. Oddly enough, owners who didn't know how much reserve they had landed in about the same place as owners with two to three months. Of everything in our data, the strongest association with owners holding back their own pay was how much cash reserve was in the bank.

We also found that 24.9% of owners have neither an emergency fund nor a line of credit. The 36.2% who had both scored 11 points higher on our index.

And 77.2% of business owners rated their own understanding of their finances as good or excellent, while the average index score was 43.5. People are highly overconfident about their finances. And problems that feel solved don't get solved. When you quietly skip your pay, by the end of the month everyone else got paid, you move on, and the underlying problem is still there. If one of your employees had their pay held, you would hear about it, and you would probably fix it by the end of the day.

There's an order to this. Owners hold back their own pay first. Then they skip a vendor payment. Then they skip CRA, which I'm sure many of us here will tell you not to do. And you can't budget your way out of it. You need cash reserves.

So there are three questions I want to explore with the panel: What does it look like when this goes on too long? What actually changes it? And what's the best way to avoid these cash flow and owner pay issues?

Chantal Mercier-Ouellette is a Licensed Insolvency Trustee with D. & A. MacLeod, and she sees where it ends up when everything fails. Amin Torfe is an account manager at TD, and he sees owners before and after they need credit. Yannick Lemay is a senior tax training specialist at H&R Block, and he sees what skipping a paycheque looks like at tax time.

Opening round

Eric Saumure: To start things off: more than one in four owners held back their own pay in the last 90 days. Chantal, does that match what you see day to day?

Chantal Mercier-Ouellette, D. & A. MacLeod [12:48]: What I mostly see is people who have run out of options. Everybody I see has not been paying themselves for a while. And it doesn't just affect the business, it affects their personal life too. Most times we have to look at both together, because they're intertwined. So yes, it matches. The first thing a lot of people do is the quiet way to solve the problem, as you said. But you really need to look at why the cash flow isn't there. Why aren't you able to pay yourself?

Eric Saumure [13:42]: We'll come back to that. I wanted to hear from everyone on the panel first. Amin, from the bank side, are you seeing business owners hold back their own pay often?

Amin Torfe, TD [13:59]: One thing I see quite often with small business owners is that being profitable and having cash available are not always the same thing. I always say cash flow is the blood of every business. You might be making sales, sending invoices and growing the business, but that doesn't mean the cash is sitting in your bank account. Your customers might have 30-, 60- or 90-day payment terms, but your expenses don't stop. Payroll still has to go through. Payments are still due. So every business owner should have a backup cash flow plan in place before the pressure comes.

Eric Saumure [14:55]: Thanks. Yannick, from a year-end tax perspective, with your work at H&R Block, is this what you're seeing? Owners holding back their own pay regularly?

Yannick Lemay, H&R Block [15:10]: Yes. Taxes are probably one of the most significant expenses we have, as individuals and as business owners. We're talking about cash reserves, but it takes a few years for a new business to build that cash. It doesn't happen overnight, especially at the beginning, when there are additional expenses and things that don't go as planned.

Specific to taxes, there's a year when you pay taxes twice. You file your tax return and there's a significant balance owing, because you're paying tax on your income plus CPP contributions, which are quite significant. And you also have to start paying tax installments to CRA during the year. The first year you start paying installments, it is as if you're paying taxes twice during that year. That creates a significant gap in the budget, and people then need to cut elsewhere.

Eric Saumure [16:19]: That's a good point. The first real year you're making good money is the year you get taxed twice: the year-end tax bill plus the installments. People aren't budgeting for that, and owner pay gets cut.

When it goes on too long

Eric Saumure: Chantal, you mentioned that by the time people approach you, they've been skipping their own pay for some time. How long has it usually been?

Chantal Mercier-Ouellette [16:52]: They usually come to see us when there's external pressure. As you mentioned, some vendors fall behind, and then of course CRA. Usually we're at the point where their bank accounts are frozen or threatened to be. They have no access to cash, or their line of credit is maxed out. They're in a very difficult situation. They're working in survival mode rather than working towards fixing something, putting out fires here and there until they can't manage it on their own anymore.

By the time they come to see us, a lot of them have also used their own personal resources, so they have very little left to give. Their credit cards are maxed, because they also have personal bills to pay and they haven't been able to contribute to the household for a while. In a two-income family, which is generally the case, one spouse is usually stuck contributing more than the other for a while. So it's a domino effect, and at that point we have to look at what options are available to either save the business or shut it down.

Eric Saumure [18:26]: That sounds like a really tough call. You've described how badly it affects the household. People hold back their own pay, and action only happens when there's an external party: vendors, a frozen account, CRA. If it's just their own pay, they don't tell anyone, and it carries on until that outside pressure arrives. But then there's the household side: personal guarantees, lines of credit on the house, the spouse. Walk us through what that looks like.

Chantal Mercier-Ouellette [19:08]: A lot of the time, the spouse is aware of what's going on in the sense that they've been carrying most of the burden for a while. But they're not sure how bad it is. Entrepreneurs are a different animal. They're always waiting for the next big thing to come up: "I just have to get through this period." So how far can they stretch it? Sometimes the spouse isn't aware they've used up all of the line of credit, because one person manages it and doesn't want to stress out the other. They hold on to everything themselves, and when it finally becomes clear they can't keep going, it's overwhelming.

If they have assets, like a house, there are personal guarantees, and even government debts, that could put their share of the house at risk. RRSPs tend to be protected for the most part, but contributions made in the year prior could be at risk in an insolvency process. So a spouse has to be brought in to understand the effects of everything: what they can do, and whether they've done enough or done too much. Asking someone who isn't part of the business to put good money after bad isn't always the best solution. We could look at something like a proposal, which stops everything, and if there's cash flow that would otherwise not be available, there may be a way to reset things through an agreement with the creditors.

Eric Saumure [21:25]: That's a tough call: do we shut the business down, do we give it a shot with a proposal, or does the spouse put their own money into a business that has historically lost money? That's a big risk, and it's a call you live with every day.

Chantal Mercier-Ouellette [21:43]: Or even the spouse signing a personal guarantee if they go to the bank for another line of credit. Now they're at risk as well.

Eric Saumure [21:53]: That's tough. Yannick, let's go to the tax side. When an owner's pay changes from month to month instead of being steady, what does that look like at tax time?

Yannick Lemay [22:19]: It's not so much about complicating things for the tax preparer. It's for you. When you pay yourself, you want to make sure you set aside enough for the taxes on that income, and that's harder when your pay is uneven. If your pay changes a lot, it's harder to track where you're at, what tax bracket you're in and what you should be withholding. It also might not line up with the planning you did earlier. Maybe at the beginning of the year you sat down with your tax specialist and decided what you were putting into your RRSP or TFSA, what the tax implications were and what installments you'd send. If your pay changes throughout the year, that planning might no longer be relevant or the most efficient way to go.

Eric Saumure [23:19]: Right. At the beginning of the year you optimize whether it should be salary, dividends or a bonus, and when the plan goes off the rails, the tax efficiency goes with it. Did we withhold enough? Maybe we should have just done dividends if you were going to hold back half your pay during the year. But if you're on dividends, you can't deduct childcare expenses. It all compounds.

Yannick, when cash is tight, payroll remittances are tempting to stretch. What do owners often not realize about that?

Yannick Lemay [24:01]: The penalties and interest CRA charges, especially on payroll remittances and on the GST/HST you've collected from your clients. These are pretty severe. Seven days late on your payroll remittance isn't much. It's one week you were distracted. But at seven days, you already have a penalty of 10%, and that's on a first offence in the calendar year. A second offence can bring a 20% penalty on the amount you owe CRA. These amounts increase quickly and make the debt harder to resolve. And those penalties and interest aren't tax deductible, so you're paying them with money you've already paid tax on.

[Editor's note: CRA's late-remittance penalty on source deductions is 3% for remittances one to three days late, 5% for four to five days, 7% for six to seven days, and 10% for more than seven days late. The 20% rate can apply to a second or later failure in the same calendar year that was made knowingly or through gross negligence.]

Cash runway, credit and last resorts

Eric Saumure [24:54]: That's an interesting point. Chantal described what it looks like at the deep end, so let's take a step back and look at cash. In our data, 18.1% of business owners had no runway or didn't know what theirs was. We've put a second poll on the screen. Again, it's anonymous and aggregated, so you can give the real answer.

Amin, while that fills in: what does a lender want to see from an owner, and when is the best time to ask for money?

Amin Torfe [25:46]: The best time is before the pressure comes. Business owners don't need to wait until cash flow becomes a problem. If you know you have a growth opportunity coming, a large purchase, seasonal fluctuations or customers who might take longer to pay, that's the right time to start a conversation with your business account manager, whichever bank you do your day-to-day banking with. Keep that conversation active. Get them involved, talk to them regularly and make sure they understand your plan. Lenders mostly want to understand your business: your plans to grow it and the difficulties that might come. Keep your business advisor in the loop and they may be able to give you some solutions. But it's better to start the conversation before the pressure comes.

Eric Saumure [27:02]: At the end of the day, pressure is going to come at some point. Businesses go up and down; you're all business owners, you know how it is. So what happens when owners come to you after a bad month or a bad quarter, asking for a line of credit for the first time?

Amin Torfe [27:29]: Honestly, it becomes more challenging, because the business may already be showing some pressure, and there's less time to understand whether the need is temporary or part of a larger issue. A line of credit should help manage the normal timing gaps between receivables and expenses, but it shouldn't be the only plan for ongoing losses. Speaking with the bank early gives the owner more options. If you wait until the last minute, you might miss some due dates. That's why it's always better to have a plan ahead of time.

Eric Saumure [28:12]: One of the statistics from the Zenbooks Financial Clarity Index was that one in four owners had no emergency fund or line of credit. If an owner can set up one of them this quarter, which should it be? Should they put money aside, or go for the line of credit?

Amin Torfe [28:36]: If it's possible, I would start by building an emergency cash reserve, because it's the owner's money and it doesn't carry any interest cost. At the same time, I'd still recommend discussing a line of credit with the bank before it's needed. The right credit depends on the nature of the business. But start with the cash reserve if the business is doing well, and it's always good to have a line of credit as a backup. The strongest position is having both: a cash buffer for small disruptions, and available credit for temporary timing gaps and opportunities.

Eric Saumure [29:39]: I'm seeing the poll results and will share them in a second. Chantal, by the time the buffer runs out, with no cash reserves, no line of credit, and no easy loan from Amin or another lender, what options are left?

Chantal Mercier-Ouellette [30:05]: We sit down with the director, and usually their controller is there too, and we review where the business is going. Do they have contracts coming in? Do they just need time to get things back on track? Are they recovering from a big loss?

We also have to be mindful of the types of debt outstanding. If you have secured creditors, for example a line of credit secured by a general security agreement, you can't compromise that. You have to keep making those payments, otherwise you can lose your assets. Arrears on source deductions have to be paid. They have a super priority over everybody, sometimes even over secured creditors, so we have to look at how they can be paid as quickly as possible. HST, on the other hand, loses its priority over the assets in an insolvency process. But source deductions always keep their super priority.

The other thing to be mindful of is the personal fallout for the directors. If the company can't pay, can creditors with personal guarantees come after them personally?

Eric Saumure [31:52]: Right, personal guarantees.

Chantal Mercier-Ouellette [31:53]: Yes. And the same with source deductions and HST. Even though they may be dealt with separately, in a bankruptcy CRA could come after the directors through director's liability. So we have to look at what kinds of debts there are, whether there's a way to restructure things so they make more sense, and the likelihood of getting approval from the creditors, since certain majorities are required. Coming to see us isn't always the best thing, but if you're at a last resort before pulling the plug, definitely see a trustee to find out what's available and whether it's possible.

Eric Saumure [32:44]: Speaking of last resorts, the poll is ready, so I'll end it and share the results. This is interesting, because comparing it against our national data, this room is quite close. Amin, we've got 9.2% who don't know how much runway they have. Maybe they don't know what it means, or they haven't checked the bank in a while. And 13.5% have zero runway: no cash reserves at all. What would you recommend to the people in the bottom half on cash reserves?

Amin Torfe [33:39]: Sit with your business account manager at your bank and with your accountant to find solutions. First, no need to panic, but don't ignore it either. Start by calculating exactly when cash is expected to come in and what must be paid over the next several weeks. Follow up on receivables. Speak with your accountant and your banker early, before the pressure comes. The goal is to create a plan before a short cash flow gap turns into a larger problem.

Eric Saumure [34:40]: And not everybody has an accountant, and that's okay. Not everybody needs a corporation and all of that. One thing I found really interesting in our data was that even owners with a budget delayed their own pay at the same rate. You'd think that if you plan ahead, you wouldn't have to delay your pay. So if not a budget, what tactics would be useful? That's for anyone on the panel.

Amin Torfe [35:25]: A budget is definitely useful, but it's only a plan on paper. What changes the outcome is actively monitoring cash flow: comparing the plan with what's actually happening and taking action early. Owners should know when money is coming in, when payments are going out and where the gaps may occur, so they're prepared for a rainy day. Have regular conversations with your accountant. Whether you're a mid-sized business or a very small one, your bank will have business advisors who can help you set a plan. Be engaged with them and have those conversations ahead of time, because you never know when the pressure will come.

Eric Saumure [36:35]: That's a good point. We had a question come in about whether the full survey is available, and I've answered that in the chat so everyone has the information. Yannick, if an owner wants their household to stop absorbing the business's ups and downs, what's the first thing that needs to change, from your practice?

Yannick Lemay [37:03]: It's hard, because small business owners have often invested their personal savings into the business, to start it or to help it at some point. That leaves a very thin margin on the personal side when unexpected expenses come up with their family or their children. There are some tips you can put in place in the business. One is to collect money from your clients more quickly. If you're tight on cash and people owe you money, that's the first place to look. You can offer clients a discount to incentivize them to pay faster. That's easy to put in place, and so is simply following up with clients who owe you money.

Eric Saumure [38:03]: Interesting point. Chantal, what's the conversation business owners aren't having, with their spouse, their banker or their advisor, that would have the biggest impact?

Chantal Mercier-Ouellette [38:21]: For a lot of them, it's knowing how long to keep going. They have to give themselves a deadline for how long they can keep certain things going, and not go past it. They have to be realistic about what they can do, and have the conversation with their spouse, especially if it involves their personal assets. If they're going to borrow against the house, how much are they planning to put in? If they lose it, can they still walk away without too much damage? Otherwise, what's the point? They have to be realistic about their exposure, and about what they expect of the other person. It might be one partner's dream to have this business, but if it's not viable, who are they doing it for? They need to have that conversation and see whether they need to re-evaluate where they're going.

Of course, I'm the bleak one in this group, because I see everything when it goes wrong, and that's not the vibe I want to give off. There's definitely somewhere to go before you come and see me. But if you want to know how things can end up, this is where they land. Don't be afraid to have those conversations with your spouse and your partners. It's not easy, but you need to know where you're going and that it makes sense.

Audience question and lightning round

Eric Saumure [40:09]: That's very fair. We have a question from the audience, so I'll bring it in now. This one is for Amin. An attendee was planning to grow their business and asked their bank to increase their line of credit. The bank offered to reduce their Visa limit by the same amount. They're asking whether that's a reasonable offer, or whether they should change banks.

Amin Torfe [40:49]: We'd need to see the full picture of that situation. But they should definitely ask why the bank wants to reduce the credit card limit. Depending on the nature of the business, there may be a maximum exposure on revolving credit, and a loan with a fixed term might be an alternative. It does sometimes happen. But they can ask whoever worked on the application what the reason behind that decision was.

Eric Saumure [41:38]: It's good to get different opinions on the same situation. What I've seen is that different banks have different appetites for different industries and situations. Sometimes you explain yourself slightly differently to another bank and they're all for it. And as Amin was saying earlier, sometimes it's about the relationship. You've banked there for a while, your account manager understands what you're trying to accomplish, and that helps.

One thing I've seen that's not part of the index, so it's not from the statistical side, but from our own practice: when it comes to owners delaying their own pay, we've often told people to put themselves on actual payroll, as a hard requirement, just like an employee. If there's extra money, you can take it as a dividend when it comes, and handle your RDTOH and so on from there. That gives you stability in your personal life, and the ups and downs stay in the business, so you have a stable month to month.

It also sounds like we all need to arrange our credit before we really need it, so that when the bad months come, that's not when we're having those hard conversations with Amin or Chantal. And you don't want to be sitting with Yannick at year-end saying, "We didn't actually follow the plan we talked about. Let's throw it out and start over."

Let's do a lightning round. Each panelist gets 20 or 30 seconds: what's one number every owner should know about their business, and why?

Chantal Mercier-Ouellette [43:38]: That's a really good question. You might be better off asking someone else, because for me...

Eric Saumure [43:45]: How much debt you currently have is probably top of mind.

Chantal Mercier-Ouellette [43:52]: For the most part, yes. Oh, I do know one: cost analysis. Making sure you're actually earning enough on each project you do.

Eric Saumure [44:09]: Your gross margin per project. First make money on your projects before you start thinking about cash flow and everything else. You have to actually make money when you do a project. Amin, one number. I know you're a numbers guy, but you have to pick one.

Amin Torfe [44:30]: I should say their accountant's phone number. That's the best number to keep in mind. But in general, I'd say how many months the business can keep covering its essential obligations if revenue slows or stops. Knowing that number helps you understand how quickly you need to act, and whether you have time to adjust expenses, collect receivables or arrange financing. But if it's only one number, it's your accountant's. If it's two, your business advisor's is the second.

Eric Saumure [45:14]: That's very fair. Yannick, one number.

Yannick Lemay [45:19]: I'll go with the tax rate. On your personal taxes, it's harder to know your tax rate, because there are lots of personal credits and deductions that affect what you pay. But if you're incorporated, the corporation has one single tax rate on the first $500,000 of taxable income from active business, so excluding investment income. You already know in advance what the tax rate on that income will be, which makes it easy to plan for, because CRA will not forget you.

Eric Saumure [45:58]: They won't forget you. That's a good point.

Audience Q&A

Eric Saumure [45:58]: Thanks, all three of you. Let's go to Q&A. Put your questions in the chat or the Q&A. Feel free to tell us what kind of business you run, because it helps us give a more specific answer. Questions can be for Amin, Chantal or Yannick.

While those come in, here's one I get often, and Yannick, you might be able to help: should I pay myself a salary or a dividend? Go.

Yannick Lemay [46:52]: There's no one-size-fits-all answer, and the answer may vary from year to year. Maybe there's one answer for you this year and a different one next year. We have to look not only at your business but at your personal situation. Are you planning to buy a house next year? Banks are sometimes easier to deal with when you have employment income on your tax return. If you have childcare expenses, or credits calculated on your income, that might affect how you pay yourself. And keep in mind that wages and dividends aren't necessarily taxable at the same time. Wages are taxable when you receive the money in your bank account. A dividend is taxable when it becomes payable to you. So there's a bit of flexibility there that you may want to take advantage of.

[Editor's note: for individual shareholders, taxable dividends are generally included in income in the year they are received, meaning paid or credited, rather than when they are declared. Speak to your tax advisor about timing.]

Eric Saumure [47:49]: Love it. Some extra flexibility. And I can see Amin smiling and agreeing that banks like salaries over dividends.

Amin, here's one for you. We talked about runway and cash reserves. An enormous cash reserve is great, but at some point we need to invest in capital expenditures and efficiency. From your perspective, what's the right amount of cash to put aside? Or do we just keep saving until we have six or twelve months?

Amin Torfe [48:28]: I'd say a minimum of three months of expenses, depending on the type of business. Every business has its own numbers, but if you have a plan for ninety days, then at least you have some time if there's something you need to discuss with your bank or other lenders. So three months would be the minimum.

Eric Saumure [49:06]: Good. Another question came in, and this one may be for you, Chantal. The question is, "How can I help my employer avoid having to meet with Chantal?" I'm sure you hear that regularly. The person asking doesn't have signing authority on the account. How can they get the owner to pay large bills and still pay himself? Any tips or tactics?

Chantal Mercier-Ouellette [49:41]: The real question is why they can't pay their large bills and themselves. You have to look at what's going on. Is it a cash flow problem? Is it an overspending problem? It's a loaded question. There needs to be a conversation with an accountant to see what's going on, and maybe some streamlining needs to happen. It's hard to say. Unfortunately, somebody can't just call me and say, "I want to go bankrupt," and I say, "Sure, here you go." We have to come in and look at everything. So first, have the talk with your accountant and your controller, and find out where the big issue is: the cash flow, or expenses going out too fast.

Eric Saumure [50:43]: Essentially, if you have a profitable business, you'll have fewer cash flow problems. If you can fix profitability, then it comes down to tactics like collecting faster and paying a little slower. But what you're saying, Chantal, is that it's hard to answer without the full details, and the underlying task is to build a profitable business.

Chantal Mercier-Ouellette [51:12]: To be fair, a lot of people are very good at what they do for the business. They're just not very good at managing the finances. So maybe there are courses they can look into. Or talk to their business advisors and their accountants. They're the ones who went to school for this. Ask them.

Eric Saumure [51:38]: You went to school too. But here's a question that came in for Yannick. What are your thoughts on paying a constant owner wage and then loaning the funds back as a shareholder loan during short cash flow periods? So instead of skipping your pay, you pay it, it goes into your personal account, and then you move it back into the corporation so the business isn't out as much money. Does that make sense, Yannick?

Yannick Lemay [52:16]: It does make sense, but you want to be careful, because there are rules that govern loans between you and your corporation. First, if you take money out as a loan and don't pay interest to the corporation, you might be taxed on that interest benefit. Second, you need to repay the money within the deadline, which is one year after the end of the corporation's tax year in which you took it. If you don't, you'll be taxed on the money you withdrew. And there's an additional layer we call a series of loans and repayments, which CRA does not like. That's when you take money from the corporation, put it back in, take more, put it back in. Throughout the year, you had the corporation's money in your pocket and were able to use it. You did pay it back, but you never paid tax on the money you had available. So there's a grey area here you want to be careful not to fall into.

Eric Saumure [53:18]: Very true. Here's a realistic scenario. An owner goes to their banker, and the banker rejects the loan. A sad day at the bank. What's the next step? Amin or Chantal, either of you.

Chantal Mercier-Ouellette [53:46]: As I said, we're the last resort. If they've already knocked on all their regular advisors' doors for ways to restructure without me, and the bank has declined, then we can look at restructuring through an insolvency process. For an incorporated business, that will only affect the corporation's credit, not you personally, although again, we have to take a holistic view, because personal exposure can come into it. A restructuring could mean keeping certain secured creditors you need. Your credit limit may not be extended; it may just keep going down as you pay it off. And you make a regular monthly payment to your group of unsecured creditors, which can include the government. So there are solutions. It's not an automatic death sentence when the bank says no.

Closing

Eric Saumure [55:08]: Thanks for sharing that, everyone. Earlier there was a question about the survey results. If you want to compare your own business to the index results, which are representative of Canadian business owners, you can do that yourself. I made a tool specifically for this. There's no email required and no pitch. You can fill it out anonymously and we won't follow up. Use the QR code, or go to zenbooks.ca/financial-clarity-assessment.

To summarize, there were a lot of good insights here. From the tax side, Yannick, the reality that planning is done at the beginning of the year, everything changes throughout, and suddenly your tax plan is out the window. Amin reinforced that you need to ask for money when you don't need it. Keep that relationship with your banker so they're there when you really need them. And Chantal, you showed us what the world looks like when things go sideways, and you made it less scary. You're pleasant to talk to, but you're also realistic: building a real business that makes money is number one. And at some point, if the business isn't doing well, there's a choice to make. Do we put good money after bad? Do we call it a day and file for bankruptcy, or make a proposal, if that's the right move?

If you've held your own pay this year, you're in a large group, and you're not the only one who has never said it out loud. Treat it as a signal about cash, and act on it before the next bad month. If you want to see where your own business sits, use the QR code. I want to thank Chantal, Amin and Yannick for joining us, and Wagepoint for having us at WageFest today. This has been a lot of fun. Back to you, Jenna.

Jenna Hart Rachiele [57:24]: Amazing. Thank you so much to Eric, Chantal, Amin and Yannick. Such practical information. I know I'm personally going to be having some conversations at the dinner table tonight with my family. Thank you again to our panel.

Yannick Lemay [58:30]: Thank you for having us.

Chantal Mercier-Ouellette [58:33]: Thank you.