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Canada’s Economic Growth Agenda Needs to Be Bold

Downtown Montreal business area
Downtown Montreal business area
Phil Taylor

Phil Taylor

Managing Director of External Communications, Canadian Chamber of Commerce

The federal government needs to be as bold and agile in rebuilding the economy as it was in helping Canadians and businesses get through the shutdown.

To say that it is a difficult time for Canada’s small businesses is an understatement. We’re all working very hard to find our own way forward as we enter different reopening stages across the country. Whether we’ve made a hard turn towards online sales or found ways to adapt our storefronts so that they’re both safe and profitable, it’s clear there are no easy answers amidst the COVID-19 pandemic.

Surviving day to day is all-consuming for most small businesses, requiring all of our time and skills. Canada’s experiencing its worst economic downturn in nearly 100 years that’s wreaking havoc on Canadian companies, their employees, and federal, provincial, and municipal balance sheets.

According to Statistics Canada, in May, 61% of Canadian businesses reported laying off at least 50% of their workforce. Even the most optimistic economists are projecting that it will take years, not months, for Canada to return to the levels of economic activity that were taking place before the pandemic.

Economic recovery needs small business

We might very well be in this for the long haul. As hard as it is, we need to start thinking about the bigger picture and the million-dollar question: what comes next? At the very core of that question is how to rebuild an economy that’s still finding its legs. Government support programs can’t, and shouldn’t, last forever, and their costs, necessary as they were, will be a fiscal burden that we will need to pay for.

A steadfast measure of the health of any business or economy is the amount of jobs it creates. It’s where growth comes from, and it can only come from the private sector. Between 2013 and 2018, small businesses were responsible for nearly 57%  of net employment growth. That’s why Canada’s recovery efforts must be focused on businesses on every Main Street across the country.

An economic growth plan for the future

Getting Canadians back to work is the only way to start healing our economic losses. This starts with transitioning CERB to a reformed Employment Insurance, with the latter geared towards re-skilling and up-skilling workers. We must have every government incentive aimed at getting Canadians back into the workforce.

Next, we need to reset our economic growth agenda. We need to be as equally bold and agile in rebuilding our economy as we were in helping Canadians and businesses get through the shutdown.

Right now, that means Canada must prepare to transition away from a subsidy-based crisis response toward economic stimulus. To do so, we will need to encourage investment and business activities that will create jobs and generate the revenue needed to offset the extraordinarily high levels of public spending during the emergency. That means we need to focus on the must-haves, not the nice-to-haves.

For small businesses, the fundamental changes needed to create more jobs are:

  • A tax system that helps small businesses grow and support investment
  • Policies that address bureaucratic obstacles to trade between provinces and with the U.S.
  • A significant reduction in red tape that inhibits our ability to move skilled and unskilled talent across all provincial borders

Even as we continue supporting each other today, we must also begin looking over the horizon to the post-COVID-19 world. For our economy to thrive, we must be bold and innovative and avoid the temptation to seek comfortable solutions in an increasingly uncomfortable world. Our response must rise to the measure of the challenge before us. Just like small businesses have done throughout the pandemic.

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