Description: Ten percent or more of loans are in trouble at the Atlantic Canada Opportunities Agency (ACOA). That doesn’t sound like a very positive use of our taxpayer dollars. Banks typically have a loss rate of about one percent on business loans. Another federal government agency, the Business Development Bank of Canada, reports that only 3.3 per cent of its loans are in trouble.

Date:  October 28, 2019

Source:  financialpost.com

Link: https://business.financialpost.com/entrepreneur/fp-startups/east-coast-funding-agency-acoa-grapples-with-high-rate-of-bad-loans-worth-tens-of-millions

Discussion points: 

 1) Have you ever worked for a company that had an ACOA loan? How was the company doing?

2) Why do you think the rates of impairment would be so different for ACOA versus the banks?

3) Governments and banks both loan money to businesses. In making these loan decisions, they use various measures and indicators to determine credit worthiness. Take a look at page 543 of Wiley’s Financial Accounting: Tools for Business Decision-Making and read the various ratings the Dominion Bond Rating Service uses to rate the credit-worthiness of companies. What is the highest quality rating?

Description: The government of New Brunswick is taking steps to reduce red tape for business. The Business Navigators program will begin as a pilot project, where government provides business owners with a special phone line and email they can use to ask for assistance in navigating the regulatory framework. New Brunswick’s initiative is getting positive feedback from the Moncton Chamber of Commerce. John Wishart, CEO of the Chamber, said the biggest problem in dealing with red tape is the time delay it imposes on business projects.

Date:  October 25, 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/business-navigators-red-tape-1.5334046

Discussion points: 

 1) Have you or any of your employers run into delays from red tape?

2) What do you think of the Business Navigators program as a means of addressing the red tape problem?

3) Government places costs on businesses for such things as Employment Insurance and the Canada Pension Plan. How do businesses account for their share of these programs, as well as the deductions they must make from employees’ paycheques for the employees’ share of the costs? Hint: Check out Chapter 10 of Wiley’s Financial Accounting: Tools for Business Decision-Making.

Description: You may have heard of customers lining up to purchase a new pair of high end running shoes. But have you ever thought about people who buy, sell and collect sneakers as works of art? One Canadian collector reportedly paid in excess of $1 million dollars to Sotheby’s for 99 pairs of classic running shoes. Then he topped that off by paying approximately $600,000 for a rare set of shoes. One problem with collecting sneakers though is that these assets will deteriorate over time, perhaps crumbling to a dusty pile of waste.

Date:  October 26, 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/entertainment/sneakers-collecting-art-1.5331990

Discussion points: 

1) Have you ever heard about sneaker collecting? What do you think of sneakers as a work of art?

2) How much would you be willing to pay to visit Sneakertopia?

3) On page 317 of Wiley’s Financial Accounting: Tools for Business Decision-Making is a section on valuing inventory at lower of cost or net realizable value. What would be some of the challenges in applying this rule to an inventory of sneaker art?