Entrepreneurship

Canada is an entrepreneurial society, but the structure of our economy suggests that while many Canadians start new businesses, too few are able to grow their enterprises to a significant size. The business environment and social attitudes both play important roles.

• Canadian governments provide many incentives for the creation and maintenance of small businesses, but both the tax system and regulatory regimes are biased against growth.
• Canadian entrepreneurs need access to a larger and more flexible pool of domestic venture capital. The tax treatment of capital gains has improved, but there is still a shortage of "angel investors" for new start-ups. Pension funds in Canada also have been reluctant to invest in this sector. Instead, the biggest sources of venture capital are heavily subsidized Labour-Sponsored Venture Capital Corporations. A thorough review of government programs and tax rules affecting venture capital is needed to ensure that they work more effectively in fostering start-up companies and helping them to grow.
• Canada's fragmented regulatory system provides another impediment to the growth of entrepreneurial ventures by adding to the complexity and cost of doing business across provincial boundaries.
• Social attitudes exert a powerful influence in stimulating or discouraging entrepreneurial activity. If Canada wants to attract entrepreneurs and enable them to flourish, a positive business environment must be reinforced by a culture that honours initiative and celebrates success.