Business Growth: From Formation to Scale

Canada has too many small firms that stay small. This matters because larger firms are more productive, pay higher wages, invest more in technology, and export more. The policy environment, from the small business deduction to government lending programs, has in places actively discouraged growth past the thresholds at which preferential support retrenches, and government subsidies too often reward firms for existing rather than for growing. Even where capital is available, many Canadian firms lack the marketing and sales capability to turn it into scale. Reforming business supports to reward growth, not size, is a higher-return use of public resources.