By Wallace Imman, Globe and Mail, March 29, 2012
Stimulating small-business creation and growth should be a key focus of Canada’s plans to move out of austerity and drive the economy, business owners and advocates said on the eve of the federal budget.
In January, Prime Minister Stephen Harper said he wanted to get the views of “entrepreneurs, workers, small businesses and ordinary hard-working Canadians” before finalizing the document. Leading up to its release on Thursday, the Conservative government is branding its Economic Action Plan 2012as an exercise in building jobs, growth and long-term prosperity. A senior government official has included “supporting entrepreneurship, innovation and world-class research” in a list of the budget’s five priorities.
Sources told The Globe and Mail on Wednesday that Ottawa will extend by another year a temporary hiring credit for small and medium-sized business that will defray their cost of employing more people. The measure will provide a credit of up to $1,000 against the increased employment insurance premiums a small firm would have to pay as a result of hiring new staff. The credit means a firm could take on two or three new employees without incurring additional EI costs.
Minister of State for Science and Technology Gary Goodyear has said there will also be a “transformative” change to the way Ottawa spends nearly $7-billion in R&D funds. But he’s cagey about whether it’s more than just a shuffling of current budgets.
The federal government plans to replace the immigrant entrepreneur program it shelved in 2011, with a new system aimed at identifying and speeding the path for “high-value innovators,” but not until the end of this year. And the head of the Canadian Federation of Independent Business (CFIB), Catherine Swift, said there will be an announcement soon about reductions in red tape, but it would be post-budget.
Entrepreneurs and small businesses are a growth engine of the Canadian economy, said the co-founder of non-profit advocacy group Startup Canada, Victoria Lennox, who is in Ottawa as part of a cross-country tour to meet with aspiring entrepreneurs. “There are more than one million small businesses that employ 48 per cent of Canada’s total work force, account for 25 per cent of total exports, and provide 30 per cent of our total GDP. Of those small businesses, 4.7 per cent are classified as high-growth enterprises and are responsible for 45 per cent of new job creation in Canada.”
The federal government needs to take a stronger lead in co-ordinating startup programs, Ms. Lennox added. “In Canada we’re fortunate to have many organizations that provide advice and support for entrepreneurs, but the ecosystem is very fragmented, so people don’t know where to go and when. We need to develop a collective vision and strategy.”
Startup Canada was formed last fall because even though Ottawa declared 2011 the “year of the entrepreneur,” very little changed in terms of new business development, Ms. Lennox said. “We see the need to move things along faster.”
The group, which is not affiliated with government, is travelling the country to collect recommendations to present to Ottawa in the fall, Ms. Lennox said. She would like to see more support for small-business owners and the investors who back them. A similar U.S. group, Startup America, was announced last year by President Barack Obama, whose government initiative offers entrepreneurs funding through sponsors, including the Ewing Marion Kauffman Foundation and The Case Foundation.