Small and medium business is a big deal in Canada.
After a long time in ‘Big Business’, the founders of Provision CPA created our Vancouver accounting and taxation firm to work exclusively with small and medium enterprises (SMEs) to provide entrepreneurs with financial insights and strategies to navigate the ups and downs that they will inevitably face when growing a business in Canada.
Unfortunately, the odds are stacked against small business owners in Canada but more on that another time. Today, I want to focus on just 4 reasons why supporting small businesses in Canada is so important to Provision CPA and why it should be important to all Canadians.
Reason 1: Jobs
SME Businesses are Canada’s largest employer
Small enterprises in Canada play a huge role in the creation of jobs and employment opportunities for Canadians. Between 2005 to 2015, SMEs in Canada created 1.2 million jobs for Canadians.
To put it another way, during that 10-year period, 87.7% of Canada’s jobs were created by owner-operated SME businesses. This impressive but little-known fact about the small business sector came from the 2016 Labor Force Survey by Innovation, Science and Economic Development Canada (ISDEC).
Jobs created by SME Entrepreneurs lay the groundwork for the well-being and prosperity of Canadians and this contribution cannot be overemphasized. Unfortunately, during times of recession, small and medium-sized businesses are lumped in with the unfavourable narrative earned by massive global conglomerates who have been known to take advantage of the labour force. That misdirected negative public opinion toward employers causes politicians to legislate policies that gravely impact Canada’s small business sector and that often results in the closure of businesses and the loss of jobs and wages that Canadians need.
Provision CPA was established to support the sustainable development of Canadian small businesses through periods of economic growth and recession (as well as shortsighted government policy) and each time we are successful, jobs are retained and created for Canadians.
Reason 2: Canadian Exports & GDP
Canada depends heavily on trade and the GDP of small businesses to sustain the incomes and living standards of Canadians and the prosperity of the nation
A study by ISEDC showed that 97% of Canadian export businesses were small businesses. In 2019, Canada’s export of goods increased by $533.3 billion, and 40.6% of that was attributed to SMEs.
In addition, Canada ranked 17th out of 130+ countries when it comes to innovation in health, technological advancements, and research, and SMEs account for 49.4% of our GDP in the goods sector and 56.1% in the services sector.
Put these facts together and it’s clear that when we support small businesses to grow in Canada, we are supporting the resilience of our economy and that helps all Canadians.
As a firm, Provision CPA has helped innovative entrepreneurs access both private funding and government grants that support Canadian research and development, exports, and innovation. As innovators and developers of goods, business owners are experts in their products, service, and industry but don’t necessarily have the resources to access to funds for development and growth. This is a particular area that Provision looks to help SMEs and, therefore, the Canadian economy.
Reason 3: Women
Canadians are the most active women entrepreneurs in the world.
According to a recent global report, women in Canada are more likely to open their own businesses than in any other nation.
“Canada has seen a surge of entrepreneurship in our economy over the last 20 years, and women have been at the forefront, launching businesses at rates that often outpace men,” said Karen Hughes, a professor at the University of Alberta’s Alberta School of Business and Department of Sociology, and author of the 2015/16 biennial Global Entrepreneurship Monitor (GEM) Canada Report on Women’s Entrepreneurship.
Why should this matter to Canadians? When more women work and lead businesses, economies grow. Women’s economic empowerment boosts productivity and increases economic diversification and income equality in addition to other positive development outcomes. Plus, it is estimated that companies with three or more women in senior management functions score higher in all dimensions of organizational performance. So, going back to Reason #1, if we want more stable jobs from stable companies, we need more female business leaders.
Reason 4: A Better World
Making a Difference is the Core of Canadian Small Business
According to reports, 60% of Canadian small businesses were created to make a difference, not only on a local scale but globally, also. And doing good isn’t just the goal of the product or service; it’s part of small business culture.
Research by ISED in Canada shows that, within small businesses, diversity is higher, career advancement opportunities are accelerated, mental health and happiness of employees are rated higher, and employees report feeling valued by the business leadership.
Furthermore, small business entrepreneurs are the people most likely to support community teams, social clubs, and events and volunteer in the community as leaders, coaches and change-makers.
And, a larger portion of the money made by a small business remains in Canada because both the business and employee spending habits are closer to home.
As the economy is opening up post-COVID-19 pandemic and the country drives into a recession, the Government is expecting small businesses to drive recovery, just like the SME sector has done in 2008 and previous times of economic recovery.
The magnitude of the contribution of SMEs in Canada cannot be overstated. Without question, supporting the success of a small business as consumers, service providers, and suppliers is the best way to advance our economy and quality of life.
The Entrepreneur’s Accounting Firm
Entrepreneurs that are growing and scaling their businesses in Canada need support from an accounting firm, but not all accountants are created equal. While many start-ups can grow with a bookkeeper at the beginning, as the business becomes more complex, the need for professional tax and financial strategy becomes apparent. Provision CPA is the entrepreneur’s accounting firm. Our strategic advisers are entrepreneurs who have built a thriving small business themselves and have the experience and expertise to offer impactful advisory, on-call to entrepreneurs, whenever you need them.