Tales from the Trenches | How Do We Boost Canada's Economic Prosperity?

By David Stein

In the midst of a federal election, I’ve had numerous meetings on the state of the Canadian economy, our growing debts and deficits, lack of any per capita growth over the past decade, and our lagging technology ecosystem.

Founders, builders, and policymakers are discussing what must change to accelerate the formation and growth of tech companies as a key growth driver.

In this context, I’ve been asked:  How can we develop more global technology companies that create high-paying jobs, deepen our skilled workforce, and also benefit Canadian businesses?

Over the last decade, Canada has fallen behind. Growth is the only way forward.

What we do know:

1) Tax, spend + government engineering of the economy hasn't worked.

2) R&D investments across businesses continue to lag.

3) Focus on equality of outcome, not equality of opportunity hasn't worked.

4) Low priority to optimize government services using Canadian providers.

5) A bias towards “NO” prevents bold change and advancement.

Despite the headwinds, when entrepreneurs build, grow, and succeed on the global stage, amazing benefits accrue to employees, investors and Canadians.

Take Shopify. They are a global leader, generating $10B in sales, sport a market cap of $165B, and employ 8,100 earning an average of $238K. Their employees pay close to $1B per year in income taxes!

Their people develop valuable experience, start new businesses, and might even stay to build in Canada… Yet many of our most talented, both these grizzled veterans and new graduates, are leaving.

Despite heavy investments in education, our top STEM graduates often head for greener pastures, robbing us of future innovators and job creators.

What’s driving them away?

1) Limited internship opportunities to develop skills and career options.

2) Uncompetitive tax rates. They pay ½ the income taxes in much of the US.

3) Lack of housing. They pay ½ the cost for a home in much of the US.

4) Limited early adopter customers within our companies and governments.

Imagine if we flipped the script... How could Canada be THE destination that retains talent and attracts the best?

1) Create a competitive tax regime for tech companies and their employees.

2) Allow tax flow-through shares to unlock more private investment.

3) Offer incentives for business and government to try and buy Canadian.

4) Fast-track housing development near innovation hubs.

5) Eliminate regulatory burdens that kill growth.

The math isn't complicated. Ten more Shopifys generate billions in taxes and dramatically boost job opportunities and national productivity.

The question isn't whether we can afford growth-friendly policies during economic uncertainty — it's whether we can afford not to implement them