It’s time to shatter the myth that Canada is a great place to do business

Opinion: Canada has slid in global rankings about the ease of doing business, yet there has been almost no reaction from political or business leaders to this dismal decline


 
(Hero Images/Getty Images)

(Hero Images/Getty Images)

Paul Boothe and Alister Smith are researchers with the Institute for Competitiveness and Prosperity and the Trillium Network for Advanced Manufacturing.

Canadian politicians are quick to congratulate themselves on Canada’s attractiveness as a country in which to do business. Incubators and think tanks flood social media with stories of how we are a talent magnet with our great universities, our safe, friendly cities and our super low small business taxes. But how easy is it to actually operate a business in Canada? The World Bank says that Canada has lots of room for improvement.

Every year, the World Bank prepares a Doing Business Report that compares business regulation on domestic firms in 190 countries around the world.  The 2018 Report is the 15th annual edition measuring regulations on business with the aim of providing objective and comparable data that governments at all levels can use to improve the regulatory environment for business, especially small and medium enterprises (SMEs).

With our emphasis on being business friendly, you might expect that Canada would rank highly in this report. You’d be wrong. Canada is ranked 18th out of 190 countries for the ease of doing business. In 2009, we ranked 8th. Strangely, there has been almost no reaction from either political or business leaders to this dismal decline in our ranking.

The World Bank report compares the processes for starting a business, obtaining a building permit, getting an electricity connection, transferring property, paying taxes, taking a commercial dispute to court, and resolving an insolvency case, as well as examining credit and equity market regulations and the logistics of importing and exporting goods. These are basic to the success of almost all businesses and especially SMEs.

READ: What tax grab politicians in Canada could learn from Hong Kong

The top five performing countries in the 2017 Doing Business Report are New Zealand, Singapore, Denmark,  South Korea and Hong Kong. Also ahead of Canada are major trading partners such as United States (6th) and the United Kingdom (7th). As our slide in the rankings continues, Canada now trails such countries as Lithuania, Estonia and Macedonia.

It is easy to criticize the report. It does not capture many factors such as the availability of skilled labor or market size that are important to competitiveness. It focuses on conditions in the largest business city in each economy—in our case, Toronto. However, the measures are backed by a lot of research.  Most importantly, they have the advantage of focusing on areas of regulation where actions, as opposed to rhetoric, can directly influence our competitiveness.

The Doing Business Report highlights areas of strength and weakness for Canada using a ‘distance to frontier’ measure where the frontier is regulatory best practice. Canada scores very well on the ease of starting a limited liability company. Canada is also at the frontier in trade documentation and ease of tax compliance. In 2017, however, Canada fell back on dealing with construction permits, increasing fees for site plan approval and building permits. Canada has also been far from the frontier in a number of critical areas, ranking 105 out of 190 countries in the world, for example, in the time and cost to connect businesses to the electrical grid and 114th in the time to and cost of resolving commercial disputes.

One of the challenges in addressing poor rankings is that the areas of regulation do not fall neatly into the lap of either federal or provincial governments. To improve our competitiveness, at least as measured by this report, inevitably requires federal and provincial governments to cooperate.

Being a self-proclaimed talent magnet and having super low small business taxes are great fodder for photo-ops and social media campaigns. But the business basics measured by the Doing Business Report go straight to the bottom line. By setting a goal of rejoining the top 10 countries in the ranking, Canadian governments might do more to help our businesses compete in the global marketplace.

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It’s time to shatter the myth that Canada is a great place to do business

  1. We suck at marketing…..we always have.

  2. Thanks B 2 YOU, for this important truth!
    We can read and see all the BS Turdo is pumping into media sources…at our expense, driving us deeper in debt. Making HUGE promises for the oil industry, that will never be, and charging us for it. We can see the Canadians and their families struggling to make ends meet.
    The BoC has confirmed that Canadians are deep in debt. Truthful news reporting are advising that investing in Canada may be a mistake!

    We know that at the very least, BOTH Morneau and Trudeau are liars, cheaters, and thieves of our public purse.
    We know that this senate and supreme court, (small s), are spineless in the pursuit of truth and justice. Larry rolled over on his “convictions”, in the face of turdo, just hours before taking the summer off!
    “Do not spend one moment fighting for our nation, unless you are paid.”, is everyone’s motto.
    We have known for years, that turdo is cheating the Canadian taxpayer with his belligerent over spending, to glorify only himself, like the “little” god who raised him. And in Quebec. men raise their sons to follow the sad ethic, that it is not important what one knows, nor the ethics one has learned to implement in one’s direction, nor the skills nor the education bring to the “table”.

    Even Trudeau will confirm, that life is all about who you know, and how you can buy them for one’s own self entitled desires.
    turdo and entourage of Quebec family, friends and politicians, come from generations that glorify lying and cheating the tax man even on t.v…even in the faces of the working taxpayers! But hey, lets approve a supreme court order to secure pay pal information, so we can grab more tax from the online shopper! Hypocrites, with a capital H.

    This is the bold face liar and cheater of turdo, who has no guilt for the consequences others will pay, for his greed. turdo was raised to know, that there will always be someone to purchase, to provide all he desires and to take care of his bad behavior, so he holds no accountability for any of his actions.
    turdo is not loyal, to even his own gender!

    When things get difficult, spin success in our media and charge you and me for it. Bring in immigrant children for photo shoots, when Morneau$ evil ways are exposed and questioned.
    Bring in turdo’s children, when he is exposed and questioned.

    Pay off terrorists, rather than seeking justice from US and Syrian prisons. Oh what lessons this vile government is teaching our children! Didn’t turdo appoint the leading judge in this supreme court?
    Gag our ethics commissioner.
    Appoint a “SpaceHead” to govern government.
    Pay double for SanFran gay appointment, when he knew he was driving Canada in debt all year!
    When he knew Bombardier and soft wood lumber were crashing, along with oil.

    • You really can’t focus. The report is not about PM Trudeau it is about Canada and more specifically Toronto and Ontario. The points raised are Provincial jurisdictions. So calm yourself and take a deep breath.

  3. Sounds like a job for Industry Canada. I hope J.T. gets this into the Minister’s mandate letter. At least it would be a measurable target. And if nothing else, improving our ranking would help with our marketing problem.

  4. Electricity connections, building permits, property taxes etc. are all provincial/municipal responsibilities.
    Welcome to Wynn’s Ontario for the cost and delays that rupture our daily life in all these measurements.