Why Is Canada A Bad Place To Do Business?

Canada: a magnet for young talent through our great universities, a beautiful place with safe, family-friendly cities, and a hub for small businesses by way of our low taxes. We’re a leader in the world in terms of business development, right?

Not quite. Although Canadian politicians constantly laud the country’s attractiveness as a business center, new research shows that Canada is slipping significantly in worldwide rankings of business regulation. The World Bank recently released its 2018 Doing Business Report, an annual publication that compares data on domestic firms across 190 countries. Canada comes in at number 18 out of 190 this year. By 2009, Canada was ranked 8th. What’s going on?

The report hones in on areas of regulation that directly influence a country’s competitiveness in the global market. Canada earned high marks for its ease of starting a limited liability company. It also scored well for trade documentation and ease of tax compliance.

But 2017 saw Canada drop in several key areas. The country is less efficient with regard to the construction permit process and has increased fees for site plan approval and building permits. It also scored very poorly in a couple of key areas for competitiveness; for example, it was ranked 105 out of 190 countries in the time and cost to connect businesses to the electrical grid and 114th in the time to and cost of resolving commercial disputes.

New Zealand, Singapore, Denmark,  South Korea and Hong Kong are the top five countries in the Doing Business Report.  The United States follows 6th and the United Kingdom as 7th. Although these countries’ high rankings shouldn’t come as a surprise, it is unsettling that Canada now trails such countries as Lithuania, Estonia, and Macedonia.

What can the country do to begin to climb back up in the rankings? According to this opinion in Maclean’s, we’ll need more seamless collaboration between federal and provincial governments, as the current oversight of regulations does not fall exclusively under one or the other’s purview. It can, therefore, be murky as to what officials are making the call on which regulations.

No matter what, Canadian governments are going to need to take a closer look at business practices if we are going to rejoin other global business leaders in the top 10.

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