Info-Guide - Self-Employment

This document is an Info-Guide designed to inform current or future self-employed workers of the rights, privileges and obligations associated with their status as well as certain resources that they can turn to for assistance. This Info-Guide has been prepared by Info entrepreneurs from information provided by Canada Business to answer a growing demand for strategic information by business people.  While most of your questions will be answered in this document, it is not intended to be exhaustive. Further information can be obtained by contacting Info entrepreneurs at 514 496-4636, Ressources Entreprises at 418 649-4636 or, across the province, at 1-800-322-4636.

TABLE OF CONTENTS

1.General Information: Statistics
2.Defining Self-Employment
  2.1 Status Definition
3. Business Start-Up
4. Characteristics: Taxation, Benefits
5. Support for Self Employment
6. Resource Persons
7. Publications/Studies
8. Web Sites of Interest
  8.1 General Information
  8.2 Legal Aspects

1.   General Information: Statistics

CIBC projects that by the end of the decade, one in five Canadians will be his/her own boss. "Québec will remain a strong base for small business in the coming five years, largely due to its expanding service industry, growing reliance on manufacturing activity, and high level of co-operation betwen large and small businesses." CIBC's report, entitled  "Canadian Small Business: a Growing Force" can be accessed at this Web site address: Les PME au Canada  (PDF Document)

2.   Defining Self-Employment

According to OECD, the self-employed are distinguished from paid workers by factors such as risk and control. That is, their remuneration is directly and immediately tied to the financial well-being of their businesses and they may have the additional risk of capital investment. They also have greater
responsibility for and control over the terms and content of their work.

The Québec Ministère du Revenu defines self-employed workers as persons who derive the main part of their income from work done on their own behalf.

Canada Revenue Agency (CRA) defines them as persons who own and operate a business, farm or practice. According to the Act respecting industrial accidents and occupational diseases (Loi sur les accidents du travail et les maladies professionnelles -LATMP), self-employed workers are individual persons in business for themselves, whether alone or in partnership, who have no workers in their employ.

2.1   Status Definition

The following documents will assist you in determining if you are an employee or a self-employed individual:

Employee or Self-Employed ? - Canada Revenue Agency
Employee or Self-employed

Employee or Self-Employed Person ? - Ministère du Revenu du Québec
Employee or Self-Employed Person (PDF Document)

3.   Business Start-Up

Starting a business is a step-by-step process. You must first structure your projet: prepare a business plan, choose a legal structure, verify specific permits, licenses, registrations needed to operate your business. We invite you to consult the Info-Guide - Start-Up and Expansionwhich presents the preliminary steps in starting a business. It contains also references to online tools, such as the Interactive Business Planner and a list of government financial assistance programs.

SELF-EVALUATION
Evaluate your aptitudes for becoming an entrepreneur by answering the following self-evaluation tests questions:

Moi entrepreneur ? - Fondation de l'entrepreneurship (In French Only)
Instrument de Sensibilisation sur les Caractéristiques Entrepreneuriales

Entrepreneurial Self-assesment - Business Development Bank of Canada
http://www.bdc.ca/en/business_tools/entrepreneurial_self-Assessment/selfassessment.htm?cookie%5Ftest=1

4.   Characteristics: Taxation, Benefits

Social Benefits
The self-employed worker does not enjoy certain benefits to which salaried employees are entitled, such as minimum labour standards, paid holidays, employment insurance, worker's compensation and group insurance. They must incur additional costs to obtain equivalent protection, such as wage-loss insurance, compensation insurance and the Québec Pension Plan.

Health Insurance
No specific contributions are made to the Québec health insurance plan (RAMQ); a percentage is forwarded to the RAMQ by the Québec Ministère du Revenu when income tax returns are filed.

Deductible Expenses
Self-employed workers can deduct expenses incurred in operating their business, provided they are incurred for the purpose of earning an income (e.g. purchase of computers or office equipment, transportation, rent, etc.). In regards to entertainment expenses, they are in general deductible up to 50%, on the condition of being incurred with the purpose of gaining an income and deemed to be "reasonable". As a result of the June 12, 2003 provincial budget, the amount of entertainment expenses that can be deducted in calculating a taxpayer's business or property income for a taxation year will be limited to 1% of the taxpayer's sales for that year.

GST/PST
Any self-employed worker with an income in excess of $30 000 must collect and periodically remit federal, consult the document  Goods and Services Tax and Harmonized Sales Tax - GST/HST . For further information, contact the Ministère du Revenu du Québec at 514 864-6299, 418 659-6299 or 1-800-267-6299 or visit the Web site at: QST and GST/HST

Tax Instalments
Finally, self-employed workers must pay income tax instalments to the Canada Revenue Agency  and the Québec Ministère du Revenu. For further information, consult the document  GST/HST Returns or visit the Web site at: Instalment Payments of Income Tax

SMB Growth Stock Plan
The SMB Growth Stock Plan allows individuals to deduct their investments in companies with assets under $100 million. The plan, which is limited to the common shares of a qualified issuing corporation or investment fund securities, will remain in effect for five years, i.e. until December 31, 2009. This plan replaces the Quebec Stock Savings Plan (QSSP). For further information, consult the Web site at: http://www.revenu.gouv.qc.ca/eng/ministere/centre_information/nf/nf2005/in-136_68/action_croissance_pme.asp

General Information - Taxation

- Information on self-employment is available on the Revenu Québec Web site at: Instalment Payments of Income Tax

- The Canada Revenue Agency's "Guide for Canadian Small Businesses" is intended mainly for new and prospective small businesses and provides a great deal of taxation and customs information that existing small enterprises may also find useful. The publication is available by calling 1-800-959-2221 or visiting the Web site at: Guide for Canadian Small Businesses

- Québec Department of Finance
An information bulletin (Bulletin d'information 2002-4) announcing 15 measures to reduce and simplify administrative procedures regarding taxation, particularly for businesses and self-employed workers is available on the Québec Department of Finance Web site at the following address: Bulletin d'information - administration des lois fiscales (In French only)

5.   "Support for Self Employment" (known as Soutien au travail autonome - STA)

This program is aimed at individuals with promising business projects. It provides counselling and financial assistance for people starting or expanding their own businesses or those who wish to become self-employed. Recipients of employment insurance benefits, income security as well as people whose jobs are at risk are eligible. The duration of the technical and financial assistance will be determined with each individual participant and can be extended over  a maximum of 52 weeks. For further information, contact your Centre local de développement or the Association des Centres locaux de développement du Québec (ACLDQ) at 418 524-0893. On the Internet: Mesure de soutien au travail autonome (In French Only)

My Account - Canada Revenue Agency
If you are wondering about the status of your tax return or refund, you can view this information through a new online service. Visit the Web site at: Tax Tips

6.   Resource Persons

Self-employed workers can turn to various groups and associations for contact and support:

- Centre local de développement (CLD) - the association at 418 524-0893
Association des centres locaux de développement du Québec  (In French only)

- Réseau META Québec (Chambre de commerce des entrepreneurs de Québec committee) at 418 651-7181
Chambre de commerce régionale des entrepreneurs de Québec (In French only)

- Canadian Federation of Independant Business at 514 861-3234 or 1-888-726-3234
Fédération can. de l'entreprise indépendante

- Affaires et développement québécois (AEDQ) at 514 990-0519, or 1-877-979-7973
Réseau des travailleurs autonomes (In French only)

- Option Réseau Estrie Inc. at 819 569-7746
Option Réseau Estrie (In French only)

7.   Publications/Studies

Title: At your Service ! Employment
Author: Emploi-Québec
Available on the Internet: Guide au service de l'emploi (In French only)

Titles: Le travailleur autonome et son marché (2000). 35p.
Le travailleur autonome et le développement de sa clientèle (2000). 35p.
Author: Alain Samson, Fondation de l'entrepreneurship
Available: bookstores or librairies

Title: Guide for the Self-Employed
Author: National Bank of Canada
Available: Branch offices

Title: Le guide du travailleur autonome : tout savoir pour faire carrière chez soi. 282 p.
Author: Jean Benoît Nadeau
Available: Bookstores or libraries

Title: Start and Run a Profitable Home-Based Business. 135 p.
Author: Edna Sheedy
Available: Libraries

Title: Home Enterprise, Canadians and Home-Based Work. 105 p.
Author: Barbara Orser & Mary Foster
Available: Libraries

Title: Profile of Quebec Self-Employed Workers (Acrobat, 430k) (1996 Census)
Author: Centre de recherche sur l'entrepreneurship et le travail autonome
(CIRETA) for Canada Economic Development, April 1999
Available on the Internet: New Publications
(choose "Other publications" section)

Title: Are You Self Employed ? Taxation reference Tool
Author: Ministère du Revenu du Québec
Available on the Internet (In French): Are You Self-Employed? Taxation Reference Tool

8.   Web Sites of Interest

8.1   General Information

Agentsolo.com: Des experts pour vos mandats
AgentSolo.com (In French Only)

Répertoire Travailleurs autonomes et Micro-entreprises - STIQ: Répertoire des Travailleurs autonomes et Micro-entreprises de STIQ (In French Only)

La toile entrepreneuriale: Toile entrepreneuriale (In French Only)

Canada Revenue Agency, Small Businesses and Self-Employed Individuals: Small businesses and self-employed individuals

L'Autonome, le magazine électronique du travailleur autonome et de la micro-entreprise: L'Autonome (In French Only)

Entreprendre, le magazine d'information, de référence et de formation pour promouvoir le plein développement du potentiel humain dans l'organisation professionnelle:
Magazine Entreprendre  (In French Only)

"Emploi-Québec" - Travailleur autonome:Travail autonome - PEQ (In French Only)

Travailleursautonomes.com: TravailleursAutonomes.com (In French Only)

Répertoire des travailleurs autonomes du Québec - REPTAQ:
Répertoire des Travailleurs Autonomes

Revenu Québec : http://www.revenu.gouv.qc.ca/eng/travailleur_autonome/index.asp

8.2   Legal Aspects

The Quebec Law Network - Le Réseau juridique du Québec http://www.avocat.qc.ca/english/index.htm

Société par actions : maintenant offerte aux professionnels (Incorporation now available to professionals) Actualités (In French Only)

Discover many other documents, tools and interesting links pertaining to the "Self-Employment cluster" in the Tool Box, What You Must Know andLinks of Interest sections of our Website.

• Assistance for Entrepreneurship - Montreal Region
• Business Services Offered in the Bas St-Laurent Region (Region 01)
• Business Services Offered in the Saguenay Lac St-Jean Region (Region 02)
• Business Services Offered in the Québec Region (Region 03)
• Business Services Offered in the Mauricie Region (Region 04)
• Business Services Offered in the Estrie Region (Region 05)
• Business Services Offered in the Outaouais Region (Region 07)
• Business Services Offered in the Abitibi-Témiscamingue Region (Region 08)
• Business Services Offered in the Côte-Nord Region (Region 09)
• Business Services Offered in the Nord-du-Québec Region (Region 10)
• Business Services Offered in the Gaspésie-Îles-de-la-Madeleine Region (Region 11)
• Business Services Offered in the Chaudière-Appalaches (region 12)
• Business Services Offered in the Laval Region (Region 13)
• Business Services Offered in the Lanaudière Region (Region 14)
• Business Services Offered in the Laurentides Region (Region 15)
• Business Services Offered in the Montérégie Region (Region 16)
• Business Services Offered in the Centre-du-Québec Region (Region 17)
• Info-Guide - Exporters
• Info-Guide - Start-Up and Expansion
• Info-Guide - Social Economy
• Info-Guide - Young Entrepreneurs
• Info-Guide - Permits and Licences Required for Certain Types of Businesses
• Info-Guide - Employment and Training
• Info-Guide - Aboriginal Businesses
• Info-Guide - Multimedia
• Info-Guide - E-Business
• Info-Guide - Technological and Strategic Intelligence
• Info-Guide - Innovation, Research and Development
• Info-Guide - Women Entrepreneurs
• Starting a Convenience Store
• Starting a Bed and Breakfast

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.