For years now, the federal government has been trying to get Canadians to diversify away from our dependence on natural resources by building new kinds of companies — bigger, bolder ones that can compete internationally and win. The government promotes entrepreneurship via a tantalizing smorgasbord of federal and provincial grants, loans and tax incentives for start-ups — one of the richest sets of subsidies in the OECD. A new entrepreneur with a decent accountant can write down a lot of business costs and write some off altogether, while paying a very low tax rate overall.
On paper, it seems to be working. Canada is now the second-easiest place in the world to start a company, reports the World Bank, meaning that we trail New Zealand. And according to the Global Entrepreneurship Monitor (GEM), nearly 17 per cent of working-age Canadians, versus about 13 per cent of Americans, either are currently engaged in setting up a company or are already owner-managers of a “baby business” that’s generating revenue and is less than three and a half years old.Read More