Canada is grappling with numerous crises, but none is as crippling as the entrepreneurial crisis.
Entrepreneurship—the art of creating and operating a business for profit—is an essential catalyst for innovation, job creation, and economic vitality. This is not merely a popular belief; it is substantiated by extensive global studies. Yet, this crucial element is alarmingly disappearing from Canada’s economic landscape.
The root cause of the problem is complicated and multifaceted.
Our aging population and declining business competition are significant factors. Recent anti-entrepreneurial tax policies, such as the adjustments to deduction of interest costs and the notable increase in capital gains tax, exacerbate the issue.
Additionally, our “go-for-bronze” culture that fosters tall poppy syndrome, further stifles entrepreneurial spirit. As a result, we are left with an economy where one-third of new businesses close within 5 years, and two-thirds within 15 years. It seems we are softly killing the spirit of the very population our livelihood depends on.
Fostering a conducive environment for entrepreneurship is a difficult task, and retaining entrepreneurship in Canada is even harder. This challenge appears to surpass the capabilities of our current leadership. However, there is an immediate solution that can save the day: immigration.
Despite the objective of transforming Canada into a world-leading economy, our economic immigration policies are failing even to maintain our modest global standing, let alone improve it. It should be intuitive and straightforward: Canada, once known as a nation of entrepreneurs, is facing an entrepreneurial decline and should leverage immigration to attract entrepreneurial talent. Yet, the reality is starkly different.
Of the only two federal entrepreneurial programs—the Federal Self-Employed and Start-Up Visa programs— both programs have been knee-capped. The former is currently on pause with wait times exceeding five years. The latter, despite being well-designed on paper, is plagued by serious integrity issues and implementation failures, with wait times exceeding 3.5 years. This program has also been recently and reactively curtailed.
In the broader context, out of the 60% of economic immigrants we welcome in Canada with high hopes, only 1.2% are entrepreneurs. This is a glaring oversight, especially considering the succession tsunami that is already underway as baby boomers retire with $2 trillion worth of business assets at stake and finding a buyer becoming increasingly difficult. We must also not forget our productivity crisis, the obvious solution to which is boosting entrepreneurial activity.
Put simply, our economic immigration policy is primarily focused on attracting skilled workers en masse for jobs that are either nonexistent or mismatched to their qualifications due to flawed selection criteria. A recent Bloomberg report provides evidence of this, highlighting the significant unemployment discrepancy between new immigrants and the rest of the population.
Meanwhile, our immigration policy neglects programs that could attract entrepreneurs who could provide an economic lifeline. Consider Shopify’s Tobias Lütke, an immigrant who founded a business now valued higher than major Canadian banks and employing around 12,000 people. This is the type of entrepreneur Canada should be aggressively courting.
A well-designed and executed entrepreneurial immigration policy is only a short-term solution. While it can ensure a pipeline of entrepreneurs, it is not enough on its own to ensure their retention. According to Canada’s commitment to the Global Compact for Safe, Orderly, and Regular Migration (GCM), immigration must be viewed as a whole-of-government and whole-of-society issue.
This necessitates a coordinated approach involving all levels of government and society. This includes Innovation, Science and Economic Development Canada, the Canada Revenue Agency, provincial counterparts, innovation hubs, entrepreneurial centers, academia, and expert civil society. Only with well-intentioned collaboration at a national level can we hope to change the course of our country.
Canada’s entrepreneurial crisis is more than an economic issue; it is a threat to our way of life. By rethinking and realigning our immigration policies, we can attract the entrepreneurial talent needed to rejuvenate our economy. But this requires a concerted effort, not just from the government but from all sectors of society. It is time for Canada to recognize the critical role of entrepreneurs and take decisive action to foster an environment where they can thrive.
Siavash Shekarian is CEO of Shekarian Law PC, chair of the business immigration committee of the Canadian Immigration Lawyers Association, and public affairs liaison of the citizenship and immigration section of the Ontario Bar Association.
