A wave of retirements among business owners over the next few years could pose a significant risk for the Canadian economy as the country undergoes the biggest transfer of economic control in its history, according to CIBC World Markets.

CIBC said half of all small- and medium-sized businesses in Canada are set to retire over the next decade, including 310,000 that plan to transfer control of their companies within the next five years.

"The economic implications of the accelerated pace at which firms are changing hands should not be underestimated," CIBC deputy chief economist Benjamin Tal said in the report issued Tuesday.

An estimated $1.9 trillion in business assets are poised to change hands in five years — the biggest transfer of Canadian business control on record, CIBC said.

And by 2022, this number will mushroom to at least $3.7 trillion as 550,000 owners exit their businesses. B.C. has the largest share of business owners planning to exit within five years, with Alberta and Quebec having the least.

"Given this magnitude, a faulty or badly executed succession planning process could have a ripple effect throughout the Canadian economy via reduced productivity, job losses, premature sales and increased bankruptcy rates," the CIBC World Market report said.

It noted that companies that will see a change ownership in the next five years currently employ close to two million people and account for at least 15 per cent of gross domestic product.

That means planning for ownership succession is no longer just a micro issue that impacts the businesses involved, but increasingly a macroeconomic issue capable of affecting the growth potential for the whole economy, the report said.

Survey after survey has shown that business owners are ill-prepared for the inevitable ownership transition that is quickly approaching.

CIBC said that close to 60 per cent of business owners aged 55 to 64 have yet to start discussing exit plans with their family or business partners.

Peter Merrick, an exit planning consultant in Toronto, said interest in succession planning has been heating up but the real crunch will come over the next seven years.

"There's a tidal wave coming," he said in an interview. "It's going to be really fast paced when the people born in 1959 get ready for retirement because that's the height of the boom."

Merrick said the key for business people is to act quickly because a flood of businesses on the market will reduce prices. That will prompt company founders to either work longer with the vast majority eventually closing their doors and walking away.

"There's lots of opportunities but the thing is it's going to be a buyer's market so if someone is contemplating getting out, it's like musical chairs — you want to choose your chair early because later on there's going to be a lot of people," said Merrick, author of "ASK: Advisors Seeking Knowledge," an industry trade book available for sale in a couple of weeks.

While some entrepreneurs turn over their businesses to family or key employees, many prefer to sever ties entirely by selling to strategic, financial or private equity buyers.

Merrick said private equity firms with several trillion dollars are searching the world for opportunities to buy a private business before it becomes available to the public. With so many companies available, the selling prices tend to be cheap, averaging about four times earnings.

Several Canadian companies are looking to take advantage of the lack of succession planning to lure companies into their fold. Home renovation retailer Rona (TSX:RON) has aggressively targeted independent operators over the years to fuel its growth.

Pharmacy chain Jean Coutu (TSX:PJC.A) also tries to buy out independent pharmacy owners, many of whom are ready to retire.

Karl Moore of McGill University's Desautels Faculty of Management said he's met several university alumni in their 30s or 40s who are on the hunt for good acquisitions.

"I think there's huge opportunities for younger people who have the chutzpah to do this," he said.

But Merrick said a fundamental issue for the broader economy is that baby boomers who created the businesses have a different mindset than the generations that have followed.

"A lot of the younger people don't want to work like their parents worked to build these business. They want flex time, they want to enjoy life. They don't believe in selling their souls to this. They are very short-term sighted."

So a large potential source of buyers are immigrants. But, he said the federal government changed its investor immigration program to remove the ability of wealthy people to buy businesses in exchange for residency.

Merrick said that's a mistake. Canada should instead make a concerted effort to welcome business people willing to buy and operate Canadian businesses.

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  • Ecuador

    Ecuador may be one of the most inexpensive places to live for retirees on a budget. Not only is the <a href="http://www.huffingtonpost.com/2012/06/20/fortune-magazine-best-places-to-retire_n_1609136.html#slide=1115326" target="_hplink">cost of living extremely cheap</a>, according to Fortune magazine, but the South American country also uses the U.S. dollar. One couple interviewed by International Living lived on <a href="http://www.huffingtonpost.com/2012/04/17/affordable-overseas-retirement_n_1429436.html#s874483&title=Vilcabamba_Ecuador_From" target="_hplink">$600 a month</a>, spending as little as $1.25 per month on gas and $1.70 per month on water. (<a href="http://www.flickr.com/photos/palegoldenrod/4081854019/" target="_hplink">Image via Flickr</a>, Carly Lyddiard) <em>Correction: A previous version of this slide said that Ecuador was in Central America.

  • Panama

    Easy accessibility and <a href="http://www.huffingtonpost.com/2012/04/17/affordable-overseas-retirement_n_1429436.html#s874491&title=Santa_Fe_Panama" target="_hplink">excellent health care</a> are two major draws for retirees settling in Panama. According to <em>U.S. News & World Report</em>, the cost of living is not the cheapest -- especially in Panama City -- but the great <a href="http://money.usnews.com/money/blogs/On-Retirement/2012/03/19/the-18-best-places-to-retire-overseas" target="_hplink">retirement benefits</a>, <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-panama-boquete.html" target="_hplink">travel and entertainment discounts</a> and country-wide use of U.S. currency make up for the extra expenses. (<a href="http://www.flickr.com/photos/francesco_veronesi/4406579094/" target="_hplink">Image via Flickr</a>, Francesco Veronesi)

  • Philippines

    Since 1985, <a href="http://www.globalpost.com/dispatch/news/regions/asia-pacific/philippines/120703/retirement-expatriate-community-economy" target="_hplink">25,000 foreign retirees</a> have settled in the Philippines, <em>Global Post</em> reports. <a href="http://finance.yahoo.com/news/most-tax-friendly-places-retire-211248505.html" target="_hplink">Taxes are minimal</a>, so living is very comfortable on a pension of $3,000 per month. Post 50s may have to share the beach with younger folks since the minimum age <a href="http://www.globalpost.com/dispatch/news/regions/asia-pacific/philippines/120703/retirement-expatriate-community-economy" target="_hplink">for ex-pat retirees is 35.</a>. (<a href="http://www.flickr.com/photos/stoto98/5254792052/" target="_hplink">Image via Flickr</a>, SToto98)

  • Belize

    For a <a href="http://money.usnews.com/money/blogs/On-Retirement/2012/03/19/the-18-best-places-to-retire-overseas" target="_hplink">tropical climate</a> where <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-belize-corozal.html" target="_hplink">English is the official language</a>, retirees should look no further than Belize. The coastal country offers <a href="http://finance.yahoo.com/news/most-tax-friendly-places-retire-211248505.html" target="_hplink">no tax on foreign retirement income</a> and minimal sales and property taxes, according to <em>U.S. News & World Report</em>. (<a href="http://www.flickr.com/photos/hickatee/6324853508/" target="_hplink">Image via Flickr</a>, Ian Morton)

  • Southwestern France

    Some cities in France may be a bit out of the price range of the average retiree -- looking at you, Paris -- but the monthly expenses of other towns in the southwest are more affordable, notes the AARP. For Francophiles looking to settle in France, the <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-france-languedoc-roussillon.html" target="_hplink">history, culture, wine and food</a> are among the biggest enticements. (Photo credit: AP)

  • Bali

    With consistently perfect weather and beautiful beaches, Bali joins dozens of other beachfront locations that make for great retirement living. According to <em>The Wall Street Journal</em>, retirees can settle down on the Indonesian island for <a href="http://online.wsj.com/article/SB10001424052702303877604577384070844533062.html" target="_hplink">about $1,000 a month</a> (not including housing), as long as they don't mind trading in a front door for a open entryway -- as is custom in Bali. However, medical care is not the best. (Photo credit: Getty)

  • Costa Rica

    With <a href="http://finance.yahoo.com/news/most-tax-friendly-places-retire-211248505.html" target="_hplink">no taxes on foreign retirement income</a> -- according to <em>U.S. News & World Report</em> -- <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-costa-rica-central-valley.html" target="_hplink">Costa Rica</a> may be one of the ideal places to retire. Nestled between Nicaragua and Panama, the cost-friendly country boasts stunning beaches and rain forests. HuffPost bloggers Jeff Jones and Gay Haubner wrote about their experience <a href="http://www.huffingtonpost.com/jeff-jones-and-gay-haubner/house-hunting-in-costa-rica_b_1654711.html" target="_hplink">finding a house in Costa Rica</a>. (<a href="http://www.flickr.com/photos/dottieday/287835575/" target="_hplink">Image via Flickr</a>, Dottie Day)

  • Italy

    No list of places to retire abroad could be complete without Italy, where Diane Lane's character traveled to in the 2003 film "Under the Tuscan Sun." Settling in Rome is not the most feasible option, but like France, there are several Italian cities that offer a <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-italy-le-marche.html" target="_hplink">comfortable life of leisure,</a> full of delicious Italian food and wineries, on a budget, AARP reports. (<a href="http://www.flickr.com/photos/yarwood/29308454/" target="_hplink">Image via Flickr</a>, Russell Yarwood)

  • Campeche, Mexico

    Certain cities in Mexico are not the safest, especially along the U.S.-Mexico border, but there are still parts of the southern country that are increasingly popular with retirees. Campeche, located near Belize, boasts beautiful waterfront properties on the Gulf of Mexico and a low cost of living. A week's worth of market <a href="http://www.huffingtonpost.com/2012/04/17/affordable-overseas-retirement_n_1429436.html#s875023&title=Campeche_Mexico_From" target="_hplink">fruit and vegetables cost less than $10</a>, according to <em>International Living</em>. (Photo credit: <a href="http://www.flickr.com/people/malias/" target="_hplink">Flickr/Malias</a>)

  • Argentina

    While <a href="http://finance.yahoo.com/news/most-tax-friendly-places-retire-211248505.html" target="_hplink">taxes are a bit higher in Argentina</a> than other South American locales according to <em>U.S. News & World Report</em>, the large country offers a <a href="http://www.aarp.org/home-garden/livable-communities/info-07-2010/best-places-retire-argentina-buenos-aires.html" target="_hplink">wide range of places to settle</a> -- from major tourism hubs to smaller, inexpensive villages. However, retirees should plan on spending a little more on monthly expenses, because of the <a href="http://money.usnews.com/money/blogs/On-Retirement/2012/03/19/the-18-best-places-to-retire-overseas" target="_hplink">rising cost of living</a> and devaluation of the U.S. dollar, <em>U.S. News & World Report</em> writes. (<a href="http://www.flickr.com/photos/lferna/5857732656/" target="_hplink">Image via Flickr</a>, Luis Fernandez)



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  • Genealogy

    "I have over ten thousand names in my [genealogical] file and am hooked on not just the facts, but the story-writing. I reconnect with cousins I haven't seen since I was a teen. I meet new relatives online and in person, even fifth cousins, who I never know I had... There's nothing like knowing that you had an ancestor in the Battle of Saratoga..." -<em>Jean Benning</em>, 75

  • Cultural Immersion Travel

    "I traveled with the Hershey (Pennsylvania) Community Chorus to sing in Wales. When you visit the valleys in the east it's like going back in time; people aren't attached to their computers and mobile phones. I started renting an apartment in the city of Pontypool for six months a year. Now I have a lot of friends there and even volunteer at a shop where the proceeds support cancer research." -<em>Judith Emmers</em>, 69

  • Exercise

    "I'm lucky enough to live across the street from a gym. I go over there two mornings a week and work out for an hour at 5:30 a.m., and then see a trainer for another hour. I also do water aerobics three times a week. I do it so I can keep doing the things I love, not because I love the exercise. I didn't start exercising until I was sixty-six." -<em>Corinne Lyon</em>, 74

  • Travel

    "I spent my seventieth birthday in a hot tub six thousand feet up Mount Hood. I didn't want my kids to think they had to do something special." -<em>Carolyn Rundorff</em>, 71

  • Group Bicycling

    "A group of us organized a trip along the Natchez Trace from Nashville, Tennessee, to Natchez, Mississippi. We researched stops and places to stay, and every day one of us was the designated driver to haul the gear. You want to know the people fairly well before you set out on something like this. We covered 444 miles in less than a week." -<em>Bill Dunn</em>, 65

  • Book Clubs

    "We started the Canetti Literary Society in December 1981. [Elias] Canetti...had just won the Nobel Prize for Literature. I have a Masters in Literature and had never heard of Canetti. So I thought it was a good time to read his work, and the best way would be to have a book club with other women who might be interested in reading good literature. We are still in existence." -<em>Anne Richtel</em>, 95

  • Volunteering As A Docent

    "I'm training to be a museum docent at the Bishop Museum in Honolulu. The training to be certified is rigorous -- six hours a week for six weeks, then shadowing a certified docent, then delivering your spiel to two different staff members in two different areas of the museum." -<em>Therese Wilkin</em>, 63

  • Dancing

    "I began morris dancing in 1984 and long sword dancing in 1989. These forms are English and date back several centuries. I get exercise; a very close bond with a group of people of both genders and a variety of ages; the challenge of learning and performing a wide variety of rather complex and demanding dances; and the satisfaction of helping keep ancient traditions alive and growing." -<em>Robert Orser</em>, 79

  • Gardening

    "It is lovely to come to this physical and spiritual, scientific and creative body of knowledge at this point in my life. When I talk over the back fence with my gardening neighbors or give someone a bouquet of flowers from my garden, I know just how my grandmother and mother felt when they did the same thing." -<em>Ally McKay</em>, 68

  • Singing In A Choir

    "We had one piece that we were doing at a festival, which we had only a short time to learn, and we rehearsed on the bus to Abilene. We were the last to perform, and our director was very nervous. We rehearsed one last time before going on, and everyone in the choir got every note right. It's a pleasure you can't understand if you haven't done it. It really keeps you going." -<em>Mary Roberson</em>, 70

  • Community Theater

    "The best part of community theater is that no one cares about your politics, your religion, or your money. Everyone's on the same bus. I've gotten so much out of it. My closest friends come from there. The ones I depend on, the ones who have my back, come from the theater." -<em>Ellen Kazin</em>, 71

  • Writing

    "When I retired I took several Road Scholar watercolor trips and subsequently read everything I could find on Winslow Homer... My wife suggested that I had uncovered so much material on Homer that I should write a book... The rewards are beyond my fondest dreams...I believe that has brought me as close to the Master as one can get." -<em>Robert Demarest</em>, 83

  • Learning A Foreign Language

    "I started [studying Italian] when my husband and I were planning our first of four Road Scholar trips to Italy. I have found other people -- over two hundred of them, to be exact -- in an organization called Il Circolo Italiano on the Philadelphia Main Line, who come together to speak and promote the Italian Language and culture... They are the warmest people you would every want to meet." -<em>Jean Benning</em>, 75

  • Volunteering With Habitat For Humanity

    "I wanted to do something in retirement that would give back to the community and to people in need, and this seemed to be an excellent candidate... The major reward is seeing families that are living in great need...partner with us in building first other people's and then their own homes, and then move into what in most cases is the first home they have ever owned." -<em>Robert Bond</em>, 75