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The Budget

Politicians jockey for small-business vote Add to ...

Canada's small-business owners can smell a spring federal election.

No, Governor-General David Johnston hasn't dropped the writ. Yes, Finance Minister Jim Flaherty still plans to unveil the budget on March 22.

Still, federal political parties of all stripes are increasingly courting the small-business community in the lead-up to budget day, with each purporting to be its biggest champion.

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It's no wonder the woo is on, experts say. Small-business owners, including self-employed Canadians, number about two million: a sizable voting block for a minority Parliament.

Jonathan Malloy, a political science professor at Carleton University, said supporting small businesses is a "classic motherhood issue."

"I mean, who could be against small business? It is a safe bet … It's a bit more noticeable now because it fits with the policy agenda of the post-stimulus economic recovery."

Small and medium-sized businesses contribute 50 per cent of the country's gross domestic product, according to the Canadian Federation of Independent Business (CFIB). With the economy poised to be the top issue in any potential election campaign, political parties are fiercely vying for the biggest slice of the small-business vote.

That electioneering, which is already at a high level, will be kicked up a notch Wednesday when MP Navdeep Bains, the Liberal critic for small business, introduces a private member's bill to lessen the regulatory load on small businesses. While such bills are routinely defeated (and would die on the order paper in the event of an election call), his initiative provides some short-term one-upmanship on the Conservatives, while potentially signaling a future Liberal election plank.

"There is no question that political parties are, right now, going out of their way to hug small businesses," said Daniel Kelly, senior vice-president of legislative affairs at CFIB. "We feel a bit like the pretty girl at the dance who everybody wants to be next to."

Politicians have sharpened their focus on the small-business file since the start of the year as the federal government unveiled a range of initiatives specifically designed to help entrepreneurs.

In January, the Conservative government launched the Red Tape Reduction Commission and designated 2011 the Year of the Entrepreneur. In doing so, it challenged small and medium-sized businesses to drive the economic recovery by spurring innovation and job growth now that Ottawa is turning off the taps on stimulus funding.

There has also been more obvious political jockeying. Last month, Prime Minister Stephen Harper and Liberal MP Scott Brison traded barbs in the House of Commons about which of their respective parties had a better handle on the CFIB's pre-budget recommendations.

Later in the month, Mr. Harper made a personal appearance in Toronto's Chinatown before announcing that the Criminal Code would be amended to expand legal protections for people making citizen's arrests. It was an issue that had galvanized small-business owners, including new immigrants, after local shopkeeper David Chen was charged but eventually acquitted of assault and forcible confinement after he captured a shoplifter.

"Our government's top priority is the economy. Small business owners really were the unsung heroes of the global economic downturn. They are often the first to hire and the last to fire, and small and medium-sized businesses employ a majority of Canadians," said Rob Moore, Minister of State for Small Business and Tourism, in an e-mailed statement.

"Small business owners play an essential role in creating jobs for Canadians, and this is why we are committed to putting in place the right conditions for small business owners to succeed. It is also part of why our government declared 2011 the Year of the Entrepreneur."

To a certain extent, MPs are also taking their cues from U.S. President Barack Obama, who has stressed the importance of small business and innovation during the global recovery.

Even so, Canadian entrepreneurs have a wide range of views on the role of government in promoting innovation.

"President Obama's perspective is that government should be there with tax breaks, subsidies and different tools and instruments to try and create incentives for innovation," Mr. Malloy said.

"But you know that is not necessarily the Conservative Party way up here. They are more playing to the 'cut the red tape' and 'get out of entrepreneurs' way.'"

Mr. Moore, who is also chair of the Red Tape Reduction Commission, said the group would soon produce its interim report, with a final report to follow in the fall.

That's not nearly soon enough for Mr. Bains, who has dubbed his private member's bill the Red Tape Review and Reduction Act. It would require all regulation-making authorities to review regulations and set reduction targets on an annual basis. Progress made toward those goals would be reported to Parliament. The review would look at whether regulations interfere with global competitiveness, while identifying those that need to be changed or revoked.

"We feel that the Conservative government, at least I feel, they've been talking about this but they haven't taken any action," said Mr. Bains, the MP for Mississauga-Brampton South. "I wanted to put forth a concrete proposal that helps reduce red tape."

Daniel Paillé, the Bloc Québécois finance critic, said his party is sensitive to the needs of small businesses because small and medium-sized firms make up 99.5 per cent of all companies in Quebec.

Much like his Conservative and Liberal counterparts, Mr. Paillé has been meeting with small-business owners to get a better understanding of their needs ahead of the budget and a potential election. "It is very, very important," Mr. Paillé said of the sector.

Among the Bloc's key recommendations for the federal budget is a proposal to create a new program to help small and medium-sized businesses that would cost the federal government a total of $250-million. Of that amount, about $57.5-million would directly benefit Quebec, he said.

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