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opinion

Are you an entrepreneur looking for an interest-free loan to buy new technology? Good news! The government has a program for you.

Come on down to the Canada Digital Adoption Program. Want a loan? Hey, not so fast!

First, choose between two streams: Grow Your Business or Boost Your Business. Are you looking to Grow or to Boost? There’s a difference.

Now make an account on the website. Verify your identity. Take a quiz. Browse our list of 650 consultants. Hire one to write a business plan for you about why you need the new equipment. This could take weeks, or months (or maybe just a few minutes if the consultant writes the plan with ChatGPT).

Now it’s time for a $15,000 grant. No, not for you, for the consultant. Hey, wait a second. What do you mean this is taking too long and you have a business to run? Where are you going? Come back!

Yes, this is a real government program, launched last year, with a budget of $4-billion. Little of that budget has been used so far because few businesses are applying, and most of those that do don’t make it through to the end. For a program meant to help not-so-technologically savvy business owners, it seems like it was designed by a sadist. Or a bureaucrat. Or both.

The overall aim is important: Canadian businesses lag behind their international peers when it comes to adopting new technologies, part of the reason for our country’s enduring low productivity.

But this program is just one more demonstration of how Ottawa fundamentally does not understand businesses, or how entrepreneurs think.

Few business owners get out of bed thinking about the next grant to apply for. What they are thinking about are the products or services they provide, the workers they manage and the customers they serve. If the government wants to help small-business owners – and it should – the way to do that is by keeping their taxes low and the regulatory burden light.

Some small, targeted programs can work if they have clear goals and good follow-through. But this government seems addicted to the sugar-high of a splashy announcement with a large dollar figure attached, as though the very announcement itself is a job well done.

Then most of the money is not spent, and what is spent makes little impact. It’s a pattern that has been repeated across too many programs, from the pandemic rent subsidy, to innovation superclusters, to helping Black entrepreneurs.

There is one case study that exemplifies some of the worst of this approach, while also pointing to a possible way forward: the federal carbon price.

The policy is a key part of Ottawa’s efforts to reduce greenhouse-gas emissions. Individuals receive quarterly payments from the Canada Revenue Agency as part of the federal government’s commitment to return 90 per cent of carbon-tax revenue to households.

But businesses are still waiting for assistance to help them adjust to rising carbon costs. Typically, the government’s attempt at refunding their share of the carbon-tax burden has involved complicated application processes.

The federal environment commissioner found last year that none of the promised funds were spent in 2019-20, and that the program used 44 per cent of its funds in 2020-21 before winding down. The watchdog concluded that small and medium-sized businesses bore disproportionate costs of the carbon tax.

The government has responded in two ways. One is by hiring organizations in different provinces as intermediaries to dispense some kind of rebate to small businesses through some kind of unnamed mechanism. Given Ottawa’s track record, there’s not much cause for optimism.

But for farms, an industry highly affected by carbon pricing because of fuel-intensive practices, Ottawa has devised a much simpler approach: a tax credit. Farmers make a simple calculation based on their annual revenue, and then claim a refundable tax credit to offset the carbon-tax costs.

Ottawa could make a similar tax credit more broadly available to businesses, or just reduce the overall small-business tax rate a bit. Programs to dispense government dollars to entrepreneurs are too often overcomplicated, hard to execute and delayed in delivery. Simpler is better.