Technology entrepreneurs across Canada continue to stomp their feet over this year’s federal budget, which has been criticized at length for unduly stifling innovation—at a time, no less, when Canada is already grappling with severe brain drain and other crippling concerns.
Big names, such as the leaders behind Canadian tech titan Shopify, have been decidedly outspoken against the budget’s increased capital gains tax, which has been called a tax on innovation.
They’re hardly alone in their complaints.
“While other countries strategically support their tech sectors, Canada is on the verge of losing its footing in the high-stakes game of global tech innovation,” posits Alistair Vigier in a recent op-ed. “Why is Canada complicating things when we are already the least productive country in the G7?”
Vigier is the founder of Vancouver-born Clearway Law, a company specializing in law firm client qualification software. He warns that Canada’s risk-averse approach to entrepreneurship “has dried up the venture capital that new companies desperately need to get off the ground.”
“Canada is making it impossible for tech entrepreneurs like me to raise capital,” Vigier laments. “Six angel investors told us they are no longer investing in Canadian companies, and another 10 investors have said they are waiting to see the impact of these policies.”
It’s a big problem, he notes, because other countries are actively more business-friendly, attracting firms and their employees, while Canada pushes them away.
Canada’s decision to increase the capital gains inclusion rate “ignores the global battle for resources, where countries compete to offer the best business conditions,” writes Vigier.
“Entrepreneurs spend as much time figuring out regulations as they do solving problems and creating,” he says.
Startups success hails from attracting and nurturing talent and investment in the global economy. In this regard, Canada “has become a textbook example of what not to do.”
Vigier’s team is now preparing to research other markets around the world as Clearway “seriously” considers moving its business out of Canada.
“The message is loud and clear for companies: Innovate elsewhere,” he concludes. “Canada is closed for business.”
