You Can’t Champion Canadian SMEs While Maintaining the Status Quo

As global trade tensions rise, one thing is clear: Canada must bet on itself. That means championing the small businesses that fuel our economy, investing in innovation, and building the digital infrastructure that sets us up to win. Entrepreneurs across the country are sounding the alarm—growth is being held back by outdated policies and entrenched interests.

A Call for Pro-Growth Policy

Prime Minister Mark Carney’s campaign platform noted that it’s time to “build the strongest economy in the G7,” but how do we get there? His new government must prioritize a pro-growth agenda that breaks down barriers, accelerates open banking, and dismantles the oligopolies blocking progress for Canadian businesses.

It isn’t a coincidence that Canada’s banks are the most profitable among developed countries, while we rank among the bottom developed countries for the adoption of digital banking, digital B2B services, and fintech solutions. This lack of competition limits innovation and leaves Canadian businesses and employees at a disadvantage.

A recent report from the Canadian Federation of Independent Business (CFIB) indicates that small business investment in Canada is slowing, leading to declining productivity and economic risks. I’ve seen it firsthand. Talented entrepreneurs are moving operations to the US as Canadian policies and infrastructure limit their ability to scale. Projects that can be realized in a few years in the US often require double the time here in Canada—the math simply doesn’t add up for founders. The result? Founders look elsewhere to grow, and a steady talent drain limits our economic future.

Reducing Friction for SMEs

If small businesses are the backbone of our economy, why are we asking them to crawl through a maze of compliance just to exist? We don’t need more innovation grants, we need less friction for founders. Unleashing SMEs starts with trusting them, not burying them under compliance.

Beyond reducing friction, the best thing our government can do is ensure strong foundations.

The Open Banking initiative that many have advocated for immediately comes to mind as a first step that could have a massive impact. The Liberals had promised to introduce an open banking regime by 2023 in their 2021 platform, however, the initiative was notably absent from Prime Minister Carney’s platform despite his past support for a similar initiative in Britain during his time as governor of the Bank of England.

Energizing the Startup Ecosystem

Looking at Mr. Carney’s platform, I am energized by several of his proposed policies and initiatives to invest in Canadian SMEs, including increasing the claimable amount under the Scientific Research and Experimental Development Tax Incentive Program (SR&ED) to $6M, recapitalizing the Venture Capital Catalyst Initiative (VCCI) by $1 billion, and introducing flow-through shares to our Canadian startup ecosystem.

Creating a business-friendly environment will unlock enhanced opportunities for workers, including better wages, improved benefits, and greater job security. This promotes a win-win scenario where both employers and employees reap the rewards.

Building the Strongest Economy in the G7

For Canadian SMEs to thrive, the government needs to introduce policies that reduce barriers caused by industry giants acting as gatekeepers. These companies don’t want more competition—but competition is the engine of innovation. To build the strongest economy in the G7, Prime Minister Carney needs to encourage competition, embrace innovation, and invest in digital infrastructure.