Opinion: Adversarial narrative toward entrepreneurs is harming prosperity

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Entrepreneurs serve as the lifeblood of any nation, willingly shouldering risks that many shy away from. Fuelled by determination, perseverance and resilience, they create opportunities for growth out of nothing. We should be doing all we can to put wind at their backs, yet, disappointingly, our public discourse and that of our nation’s leaders have often leaned in the opposite direction.

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According to the latest statistics from the federal government, as of December 2020, Canada boasted 1.22 million employer businesses, with small businesses comprising 97.9 per cent of the total and contributing around 38 per cent to the GDP. Medium-sized businesses numbered 22,725 (1.9 per cent, 15 per cent of GDP), and large businesses totalled 2,936 (0.2 per cent, 48 per cent of GDP).

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Between 2014 and 2018, there was an average annual creation of 97,640 small and medium-sized businesses, with 89,227 disappearing per year — a testament to the challenges of starting and sustaining a business. Only about one in 12 new ventures manages to survive beyond its initial years.

Perhaps the most important statistic underscores the effect of these businesses on the Canadian economy. Small businesses employed 7.7 million Canadians, comprising 67.7 per cent of the private labour force. Medium and large businesses employed 2.3 million and 1.3 million individuals, respectively. In total, 11.3 million Canadians were actively engaged in creating wealth for themselves, their families, communities and society at large.

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Entrepreneurs play a vital role in wealth creation and contribute to funding social programs and infrastructure, underscoring their integral place in sustaining the nation.

Regrettably, there has been a shift in the narrative surrounding entrepreneurship in Canada. Business leaders are often portrayed as adversaries rather than integral components of the nation’s success. There appears to be a tendency to undermine their importance in ensuring the long-term viability and continuous renewal needed for Canada’s prosperity. Political leaders need to re-engage with the business community and especially entrepreneurs, recognizing the foundational role they play in Canada’s prosperity and cultural fabric.

Consider the issue of inflation. Over the past 30 years, businesses have been the backbone of production, services and innovation, contributing to economic growth. It is essential to dispel the notion that businesses suddenly became “greedy.” Rather, a combination of stimulative monetary and fiscal policies, coupled with COVID-induced disruptions to supply chains and labour shortages, has led to a temporary inflation spike. Recognizing this is a transient issue that will stabilize as the market adjusts and supply chains normalize is crucial.

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Furthermore, Statistics Canada indicates an 11 per cent decline in the number of self-employed Canadians who operated businesses employing others from 2015 to 2022. This decline contrasts sharply with an 18 per cent growth in public sector employment during the same period. Balancing government jobs with private sector job growth is imperative for sustainable development, especially considering an aging population and evolving social needs.

Canada’s regulatory and policy landscape has also become increasingly complex, hindering the startup and scaling process. The layering of regulations raises costs and extends the time required to launch businesses, prompting entrepreneurs to seek opportunities elsewhere. Canada must address these challenges to rekindle entrepreneurship at home, reverse declining productivity and boost GDP.

To address these challenges, maintaining an entrepreneurial culture is paramount. Entrepreneurs excel at identifying and cultivating markets. Government interventions — such as picking winners and losers or redistributing capital based on political considerations — distort markets and hinder the growth of startups. Strategic focus on long-term thinking and maintaining an entrepreneurial culture is crucial for sustaining Canada’s economic success.

Creating businesses that contribute to community well-being and prosperity is the collective effort of millions of entrepreneurs, business owners, employee-owned enterprises and founders. They play a vital role in fostering stable communities and driving wealth that has shaped Canada’s present.

I hope that government leaders will come to appreciate this in a much deeper way before it’s too late to ensure our tomorrows are better than our today.

Grant Wilde is president and CEO of Spartan Controls and a member of the Business Council of Alberta.

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