Report Names Canada a Top Five Country for Entrepreneurship, Funding Still Lagging Behind
Ernst & Young has released its G20 Entrepreneurship Barometer today and Canada ranks in the top five countries.
In fact, the report states that Canada’s levels of new business activities and startups are well above the G20 average. Canadian entrepreneurs support each other, the cost of launching is low, startups are spending less time on their tax affairs than their peers in other nations and they enjoy lower labour costs.
Canada has emerged as a real leader in fostering an entrepreneurial culture,” said Colleen McMorrow, leader of Ernst & Young’s Canadian Entrepreneur Of The Year program. “There’s an emphasis on research and innovation in this country, and we value the role of entrepreneurs in job creation. All these factors are combining to really promote the growth of entrepreneurs and entrepreneurship from coast to coast.”
Like any report that celebrates Canada’s entrepreneurial status, the notorious elephant in the room was sure to be given attention: accessing funding continues to be challenging. In fact, the report found that nearly three in four Canadian entrepreneur’s struggle to find funding.
MORE: The State of Venture Capital in Canada: An Entrepreneur’s Perspective
McMorrow said that while the number may be strong compared to the other G20 countries, it actually presents a mixed picture. “The ratio of private equity activity to GDP in  Canada is now higher than in any other G20 nation, except Australia. So private equity and venture capital are improving, but bank financing remains a challenge.”
The funding environment may be poor, but it is improving at rates quicker than any other G20 country. “While there’s no denying access to funding remains a barrier to growth, 45% of entrepreneurs in Canada say it has improved, compared to only 35% across the G20 as a whole,” said Ernst & Young partner Charles-Antoine St-Jean. “Canada’s government has been highly supportive of entrepreneurs, providing regulatory and tax regimes that have enabled start-ups and growing companies to flourish.”
While Canadian entrepreneurs possess the lowest insolvency costs in the entire G20 (or the lowest inability to pay back debts), 36% of them said that business failure is a barrier to future business ventures, above the national average.
This could be from high expectations, and given our proximity to the never-ending “bubble of false positives” that finds its way north from Silicon Valley, it isn’t surprising. According to the report, Canadians may “expect greater levels of assistance and support, and could be prone to disappointment during tougher times.”
Of interesting note, St. Jean also said that entrepreneurs in the Great White North are often critical of the country’s incubators, accelerators and mentor networks.
Despite the shortcomings, the fact remains that Canadian entrepreneurs are scoring consistently high in nearly all categories of the entrepreneurial environment, particularly in their support for each other. “Looking ahead, all these strengths should support growing levels of new business creation, with one report predicting the net creation of 150,000 new businesses in the coming decade — a resounding endorsement for Canada’s entrepreneurial ecosystem,” read the report.
