The role of small businesses when it comes to job creation in Canada is far greater than has been widely acknowledged. A recent report by Bank of Nova Scotia's chief economist Warren Jestin indicates that "highly entrepreneurial small and medium-sized businesses in rapid-growth areas will likely be a key source of Canadian job creation over the next decade."
Industry Canada statistics also reveal the importance of small businesses and job creation. It found that they created 80 per cent of all jobs in Canada from 1993 to 2003. The numbers are consistent with earlier findings in the period between 1985 and 1999, and I'm sure a similar pattern would be evident from 2003 to the present.
There are two areas the Indo Canada Chamber of Commerce believes the federal government needs to address while formulating long-term policies, and during the annual budgetary exercise.
What do small businesses need to prosper?
• Lower taxes to be able to survive.
• Proper regulation to be able to compete.
Research shows that over a 10-year period, size is no longer a determinant in the survival of a business. What remains a determinant is the level of competitiveness small businesses are able to achieve, which is why government support is required. Affirmative taxation policy is the most direct method, as it assists with initial survival and subsequent grow.
The second issue is the role of immigrants in starting their own businesses. There are two aspects to this. There is an official policy of the federal government to encourage the entrepreneurial class to immigrate and start a business. That is laudatory but it has limited impact.
• There are a growing number of immigrants who become self-employed and start a small business when they immigrate to Canada because they are unable to find jobs in their fields of expertise.
• The segment usually relies on its own ethnic community even though it receives assistance from local, provincial or federal governments.
The share of immigrants active in starting or running a company is about 60-per-cent higher compared with Canadian-born counterparts, according to the Swedish think tank Captus. Historically, immigrants to Canada have not just caught up to the income levels of native Canadians - they have often surpassed them.
Any policies that assist smaller businesses tend to help with job creation and economic stability.
Special to The Globe and Mail
Asha Luthra is president of the Indo Canada Chamber of Commerce, which is holding its annual awards and gala night on June 12 in Toronto. The 11 categories include humanitarian of the year, lifetime achievement, male and female entrepreneur of the year, male and female professional of the year, and a youth award.
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