MONTREAL - What's stunting the growth of small and medium Canadian businesses (SMEs)? That's what a nationwide study by RBC Financial Group, Canadian Manufacturers and Exporters (CME) and the Canadian Federation of Independent Business (CFIB) will try to answer.

"Small and medium-sized businesses now represent half of the Canadian economy, as compared to one-quarter 25 years ago," said Catherine Swift, president of the CFIB. "They are also responsible for creating about 80 per cent of net new employment.

"It is, therefore, more important than ever to eliminate barriers to their success. An action plan to facilitate the growth and innovative capacity of the small and medium-sized business sector, which requires the commitment of both governments and the business community, will yield benefits for all Canadians via enhanced wealth creation and an improved standard of living."

The study will try to determine which factors enhance or block economic growth for SMEs, as compared with those in the United States. Results are expected to be released this fall, together with recommendations on how Canadian SMEs can grow and compete internationally.

CME President Perrin Beatty points out that, while Canadian companies continue to hold their own globally, they still have a long way to go.

"CME's Excellence Gap analysis shows that we remain mired in last place in a competitiveness ranking amongst G7 countries," he said. "Canada will succeed or fail based on the innovative capabilities of industry, particularly those of the small and mid-sized companies that comprise the vast majority of our industrial base. It is imperative that we find ways to remove the impediments and make our businesses world leaders in innovation."

Gordon M. Nixon, CEO of RBC Financial Group, said Canada's public and private sectors must work together to improve the nation's prosperity and competitiveness.

"We need to improve Canada's ability to grow our most promising small firms, not only to replace those that are disappearing, but also to ensure we remain a diversified, value-added economy with high-paying jobs," he said. "We must find ways to encourage our small companies to invest in their future and we need to remove impediments to their growth."

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