By Market Mogul |
In 2016, the World Bank ranked Canada at number 2 for “ease of starting business” in its doing business rankings. Despite this, Canada’s overall rank for ease of doing business stood at a dismal 22nd.
By Market Mogul |
In 2016, the World Bank ranked Canada at number 2 for “ease of starting business” in its doing business rankings. Despite this, Canada’s overall rank for ease of doing business stood at a dismal 22nd.
On the other hand, Canada’s average household net adjusted disposable income per capita is $30,474 a year, above the OECD average of $29,016. While it is arguable whether successive governments have done enough to promote small and medium-sized enterprises, it is generally believed that there is a lot more that needs to happen to make entrepreneurship inclusive in Canada.
Importance of SMEs for the Canadian Economy
The SME sector is the backbone of the Canadian economy in terms of their wide geographical expanse and in providing employment to Canadians. As of December 2015, there were 1.17 million employer businesses in Canada. Of these, 1.14 million (97.9%) businesses were small businesses, 21,415 (1.8%) were medium-sized businesses and 2,933 (0.3%) were large enterprises. Nearly 8.17 million Canadians (70.5% of private sector employment) work for small businesses, which is roughly three times the population of Toronto.
The contribution of small businesses to net employment of 1.2 million jobs between 2005 and 2015 was a staggering 87.7%. In 2013, Canada exported goods totalling $420bn, of which $106bn or 25% was by SMEs. While the majority of SME exporters (26,000 out of more than 37,000 SME exporters) exported to only one country, a significant number (7,900 or 30%) exported to two or more countries. These key figures underscore the significance of the SME sector for the Canadian economy.
Economic Challenges Faced by Immigrants
While the top 1% of income earners in Canada has accounted for almost 33% of all growth in median incomes since the late 1990s, immigrant households have been hit the hardest due to many factors. In 2015, the unemployment rate for landed immigrants remained at 7.3% compared to that for people born in Canada at 6.8%. For the subset of these immigrants who had been in Canada for less than five years, the unemployment rate hovered around 12.1%. On the other hand, while 13.9% of Canadian families represented low-income households, 27.8% of landed immigrant households fell in this category.
Again, out of the immigrant families who had been in Canada for less than five years, 31.9% were classified as low-income households. As a welfare economy that affords its citizens a high standard of living, the population generally does not have enough incentives to go through the challenging process of setting up and growing companies. This is not equally true for immigrant employees who struggle to find, hold on to, and grow in their jobs. They see entrepreneurship as a viable career alternative.