More than a quarter of SME owners would not have gone into business if they had known the regulatory burden, CFIB reports
With all of the jobs they create, entrepreneurs are poised to lead the economy out of the recession and into growth. Yet the government is making starting a small business particularly difficult with excessive regulation and compliance requirements, reported the Canadian Federation of Independent Business.
In a survey of Canadian small business owners, the "red tape" involved with starting or running a small business was found to be a significant burden, costing the average organisation of any size $30.5 billion each year to comply with regulations.
The CFIB points out that this can be particularly damaging to small businesses, as the regulation cost per employee skyrockets as the number of employees decreases. For example, a company with more than 100 employees pays just $1,117 per worker per year in regulation costs, while a company with zero to four employees pays $5,825 per worker.
Furthermore, 26 percent of Canadian small business owners reported that if they had known the burden of regulation, they may not have gone into business.
The Canadian economy is not equipped to handle such a barrier to startup creation - Industry Canada reports that small businesses employ approximately half of the country's private sector labour force; meanwhile, the unemployment rate hovers at 8.5 percent.
