Small business is key to productivity growth in Canada - CFIB

    TORONTO, April 24 /CNW/ - Canada's small businesses is key to
productivity growth in Canada, according to new research by the Canadian
Federation of Independent Business (CFIB). The study, Building Business
Success: A Survey of SMEs on Productivity, shows that smaller businesses are
committed to efficiency.
    "The productivity debate is based entirely on macro-economic data that
only gives the view from 30,000 feet. What has been missing, until now, is
information about productivity from the business owner's perspective," said
Ted Mallett, CFIB's Chief Economist. "Our goal was to uncover the drivers and
barriers to productivity growth at the micro level."
    CFIB's research demonstrates that small and mid-sized enterprises (SMEs)
are competitive and continually strive to improve by investing in new
equipment, training and technology. The majority of them say they have become
more productive and many are planning to expand or diversify their businesses
in the short-term.
    The study looked at productivity gains during the past 12 months and the
following areas, linked to productivity: business plans, customer base,
capacity use, investment plans in capital and staff, technology adoption and
barriers, competition, and, vertical integration.
    "Productivity doesn't just happen," Mallett said. "It only occurs if a
business owner makes a decision to invest in people, equipment or innovation,
and the truth is they are only going to do that if they feel confident that
those investments will pay off. From a public policy perspective, that means
governments have to look to create an environment that promotes those types of

    CFIB makes several recommendations to help small business increase its
    -   Governments should ensure that the right conditions prevail so
        businesses are encouraged to grow by creating an environment of low
        inflation, low interest rates and low levels of government debt.
    -   Governments should eliminate barriers that hinder business expansion
        plans. A lower total tax burden will free-up business resources and
        improve the investment climate for SMEs.
    -   Regulations and paper burden restrict business efficiency, undermine
        competitive advantages and add compliance costs to business
        operations. Reducing the regulatory burden and red tape will lower
        compliance costs for SMEs, supporting prosperity.
    -   Inadequate access to financing can hinder investments and constrain
        the growth potential of SMEs. Governments should take measures to
        promote a higher level of competition in the financial services
        sector so that SMEs ability to obtain credit financing is not
    -   As the study shows, SMEs understand that competition can bring
        positive spin-offs to their own business. In fact, many business
        owners think international competition and free trade treaties would
        create new market opportunities, investment growth and job creation,
        and two thirds of the SMEs believe that governments should renew
        their efforts to improve the flow of trade between provinces.

    The full report is available at

For further information:

For further information: Judy Langford at (416) 222-8022

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