Canadians are pretty good at creating businesses that last, according to a new study by the Chartered General Accountants’ Association of Canada (CGA-Canada). Laying the Foundation for a National Entrepreneurship Strategy finds that around 85 percent of new Canadian businesses survive for a year, 62 percent make it at least three years and 51 percent are still going after five years. The Business Development Bank of Canada puts this last number above 66 percent.
Overall, “Canada is well positioned to capitalize on its strengths and increase the amount of entrepreneurial activity in this country.” Nonetheless, “Key challenges for Canadian entrepreneurs include access to skilled labour, education and training, lack of innovation, access to financing and the complexity of tax and regulatory compliance.”
Among the barriers to success for small and medium enterprises (SMEs) are the oft-cited low productivity and limited innovation. CGA-Canada chalks these problems up to limited access to financing, plus bureaucracy and taxes.
Industry Canada supports this view. A recent report on the 2008 Survey of Regulatory Compliance Costs found that the hours SMEs spend on regulatory paperwork had decreased from 2005, but continued to be a burden. On average, small and medium businesses spent 18 hours per establishment over the study period. And the smaller the business, the greater the cost of compliance per employee.
While CGA-Canada’s recommendations focus on government initiatives to aid and promote entrepreneurship (e.g., lowering business taxes, reducing red tape, opening borders), the study itself contains much valuable insight into the state of independent business in Canada today and the economy in general.
The government does try to help though. It offers the Canada Business website, a portal for government services directed at entrepreneurs. The site greets visitors with an offer to help find grants, loans and financing, and permits and licences. One of those financing options is the Canada Small Business Financing Program, which provides loans to purchase or improve property and equipment.
Read Laying the Foundation for a National Entrepreneurship Strategy here (PDF).
See the Business Development Bank of Canada’s Canadian Entrepreneurship Status 2010 report here (PDF).
Other government resources for small and medium businesses include the Small Business Quarterly newsletter and a website devoted to the government’s ongoing efforts to reduce bureaucracy for SMEs, www.reducingpaperburden.gc.ca.
First Reference Internal Controls, Human Resources and Compliance Editor
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