Issue
Small- and medium-sized enterprises (SMEs) are the backbone of Canada’s economy, representing over 98% of all businesses and employing nearly two-thirds of the private labour force.78 Despite their central role in job creation and innovation, SMEs face systemic barriers — chief among them: excessive federal regulatory burdens and a lack of accessible workforce development support. These constraints threaten Canada’s long-term economic competitiveness, particularly in high-growth sectors such as digital technology, clean energy, and advanced manufacturing.
To ensure Canada’s SMEs remain agile and globally competitive, the federal government must commit to modernizing the regulatory environment and investing directly in workforce upskilling.
Background
Despite their critical role in Canada’s economy, SMEs encounter outsized administrative and financial burdens when dealing with federal regulations. Between 2006 and 2021, the number of federal regulatory requirements increased by 37%, growing from 234,200 to more than 320,900.
Recommendations
That the Government of Canada:
- Commit to working directly with SMEs to identify and remove prohibitive administrative burdens related to HST, GST remittances, ROE filing and CPP/EI Reporting; ; mandating full digitization of licensing and permitting within 24 months; and creating a Federal Innovation & Small Business Ombudsperson.
- Introduce a National Upskilling Tax Credit offering a 50% refundable credit for accredited training in digital skills, clean tech, and advanced manufacturing, with bonus credits for training underrepresented groups.
- Develop a centralized digital “One-Stop Portal” for SMEs to streamline access to regulatory services, tax credits, training resources, and compliance support—integrated with commonly used business platforms.
