TORONTO - Canadian small businesses are just as willing to take risks and seek growth opportunities as their American counterparts. However, Canadian companies face more barriers to growth than U.S. businesses.

Heavy taxation, lack of skilled workers, and economic and market conditions were listed as the main barriers to growth. Other issues named by participants were competition, access to financing, and government regulation.

These were the major findings of a recent study done by the Canadian Federation of Independent Business (CFIB), Canadian Manufacturers and Exporters (CME), and RBC Financial Group. In total 1,200 owners and managers, 800 from Canada and 400 from the U.S. participated in the survey.

"While our study represents a good beginning, more work is clearly required, particularly around management practices and the key drivers of successful growth," said Gordon Nixon, President and CEO, RBC Financial Group.

Further highlights of the study included

• Canada has a higher percentage of micro-businesses than the U.S.
• Canadians have been successful starting small businesses, but less successful expanding these business to be market leaders
• Business on both sides of the border have lower rates of productivity then larger corporations
• Removing Canadian barriers could potentially increase productivity and the standard of living as compared to the U.S.

The study made recommendations for changes to both public and private policies that would reduce growth barriers. Private policy recommendations included:

• Increasing equity financing to new, innovative companies.
• Providing better management training to SME owners.
• Encourage SME’s to look at how they can expand their business through using new technology, performing more research and development, exploring export potential, and investing in productive capital.

Turning to public policy recommendations it’s no surprise to see tax reform near the top of the list. Other recommendations were:

• Federal government needs put policies in place that rebuild productivity because current programs are not working
• Cut red tape so that regulations are less complex and costly
• Increase protection for intellectual property rights
• Explore programs that encourage technology partnerships and expositions

To see the report in full go to http://www.rbc.com/newsroom/pdf/20021007CanadaSME.pdf.

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