The unreliability of an old trading partner is a good time for Canada to take a fresh look at what works and doesn’t work, and lay the economic groundwork for the next fifty years. If smaller and poorer countries can do it, so can we. Business leaders can reclaim their pioneering spirit, which used to be a quintessential Canadian trait.
Here are three suggestions on how Canada can weather Trump’s economic and climatic threats, because they are linked, while forging a more productive and resilient economy without destroying our natural capital.
Increase support for small businesses
The backbone of the Canadian economy is the small businesses with 1-99 paid employees – not the big companies. Small companies support the economy and communities because they’re resilient, adaptable, and widespread in every city and town, and in every economic sector across Canada. They also receive little government support, unlike the billions of dollars that are given to the big companies. There are just a handful of big companies in Canada, mostly multi-nationals.
In 2023, according to Statistics Canada, businesses with 1-19 employees were 86.7% of all employer businesses, and an additional 11.2% of all employer businesses was from businesses with 20-99 employees. This leaves 2% of Canadian companies with 100 or more employees as the big companies, which is unexpected because they receive most of the media attention that unduly elevates their importance to the economy. It’s worthwhile asking if the billions of dollars in subsidies that are given to the 2% is good value for taxpayers, in addition to being a photo-op for politicians.
Yet, the federal government acknowledged the importance of small businesses to the Canadian economy with its fast response to them at the start of the COVID19 crisis. It showed it has the administrative capability to provide quick, effective, and accessible financial assistance to keep small businesses afloat when the economy was listing.
At that time, the federal government’s newly created emergency programs such as CEBA*, CEWS*, and CERS* were the lifeline to the Canadian economy during the unexpectedly globally stressful time, and were successful in helping Canada weather the storm. Not only that, they weren’t costly subsidies as small businesses were required to repay the loans, unlike the largesse given to large companies. After the repayment deadline, Statistics Canada had reported that less than 20% of the CEBA loans remained outstanding.
If needed, these programs can be reactivated quickly.
Support Innovations and Design Improvements
Doing things better with less requires a fresh perspective that is often prompted by a crisis that necessitates change. Innovating and improving design are not easy to create, or implement, and can be costly. But when the need is there, better solutions can be found.
Innovations and design improvements are more likely to occur in small companies that have a small pragmatic team with good communication, and cash flow. These firms are resilient, adaptable, and committed to try something new that might work rather than stay with the limitations of something familiar. Their employees are doing more than just a job. The movie Blackberry captured the employees’ creative synergy in the early days of Blackberry when they were working in an open area but could also play when they needed to relax their brains.
Canada has had many innovators and innovations, and can meet the challenges of a rattled status quo as it can be an exciting time for innovation and better designs, especially if they are more Earth-friendly and conserve energy. This change is long overdue.
Grow the Circular Economy
Canada had been blessed with a bounty of resources that have been squandered by processes, products, and procedures designed in the last century, which was a time of plenty, but still used today. No one cared about conserving energy or resources because they seemed endless, but they’re not anymore.
Redesigning with energy conservation in mind would result in things being done better and more cheaply by using less material, electricity, heating, water, and time. The recovery of used materials would be recycled in the circular economy. This means less waste going to landfills (disclaimer: I have shares in GFL Environmental Ltd.).
The need for mining for virgin resources would be greatly reduced if urban mining from recyclables was increased. This would benefit the natural habitat by making resource extraction, which is hugely destructive, less profitable, especially if the tax advantages were removed.
The circular economy is virtually non-existent in Canada, but it is vitally important in a new economy. The former provincial government of Kathleen Wynne recognized this when it implemented the Cap-and-Trade program to revitalize Ontario’s economy. Both were dismantled by the Ford government.
A working circular economy would go a long way to increasing economic productivity without destroying our natural capital. Natural habitats can be protected, and can recover if given the chance, which would be a cheaper and more effective way to mitigate the economic, social, and environmental threat of frequent severe climate events.
Canada can be a world leader in creating a functioning and effective circular economy, but to do so would require federal and provincial legislation and enforcement.
One of the manufacturing awards that I am most proud of was the “ISRI Design for Recycling” award. The Institute of the Scrap Recycling Industries (now called ReMA) recognizes the designing stage as the most important stage when creating products and packaging that are easy to recycle, and made from recyclable materials.
This period of tariffs and economic turbulence can be an exciting time for Canada’s economy to grow-up while protecting the environment. Supporting small businesses to implement these changes is the way to grow the economy both domestically, and internationally.
*CEBA (Canada Emergency Business Account)
*CEWS (Canada Emergency Wage Subsidy)
*CERS (Canada Emergency Rent Subsidy)
Sharolyn Mathieu Vettese
President
SMV Energy Solutions
www.smvholdings.com
SMV Energy Solutions provides simple smart solutions that conserve energy