Canada is facing mounting pressure to close the gap with the United States in terms of helping small and medium-sized businesses.
Benjamin Tal, deputy chief economist with CIBC World Markets, said what's missing in Canada, relative to the U.S., is not financial assistance but information. What entrepreneurs really need is a comprehensive, yet easy-to-understand guide on starting a new business, he said. "It is a bit easier in the U.S."
Some measures taken by Ottawa in recent years:
Tax cuts. For example, the amount of business income eligible for the small business tax rate of 11 per cent was increased to $500,000 from $300,000.
A new Red Tape Reduction Commission was launched earlier this month.
Canada's Economic Action Plan included $15-million in annual financing to support the Canada Business network, which provides startup information for entrepreneurs.
The United States, meanwhile, has been forced to take more "urgent" measures, Mr. Tal said. Last September, a new Small Business Jobs Act took effect. It included:
- A new $30-billion (U.S.) small business lending fund.
- $12-billion in additional tax breaks for small businesses.
- A temporary increase in tax deductions for startup costs.
Rita Trichur