Government Is failing small businesses. How can we help?

This week’s blog is my rant about how our Canadian federal government — along with other levels of government — is failing small and medium-sized businesses (SMBs). Promises have been broken, programs are poorly planned, and the systems in place are overly complex and administrative. The result? Small and micro-businesses (those with fewer than 99 employees) are struggling to survive — not just in their first year, but in the long run.

A Couple of Facts You Should Know: 

- 98% of Canadian businesses are small. If they fail, we all fail.

- From 2016–2020, small firms contributed 35% to Canada’s GDP — yet there’s no current data for 2021–2024. Unacceptable.

Billions Spent, but Businesses Still Closing

Despite billions in funding and rebates — $2.5B carbon rebate, lower credit card fees, and a $560M boost to the Small Business Financing Program — small businesses are still closing faster than ever. The strategy isn’t working.

The Harsh Reality of What Small Businesses face:

- Limited access to capital

- Inconsistent policies

- A lack of large domestic “anchor” companies

The Numbers Don’t Lie:

- 20% of small businesses close in their first year

- 50% survive five years

- Only 30% reach ten years

- That’s a 70% failure rate.

A third of small business owners say their biggest challenge is maintaining positive cash flow. Many also struggle with marketing, time management, and administrative overload. And let’s not ignore this key issue — 42% of small businesses fail because they haven’t researched their market, offering products or services that customers simply don’t want.

WHAT'S THE SOLUTION? My Two Cents:

Remember during the COVID-19 pandemic when our Canadian political leaders turned to health experts for guidance on managing an out-of-control virus? It’s now time for all levels of government to turn their attention to business experts—to find practical solutions and develop the right financial strategies to reduce the growing number of bankruptcies.

Professional business service providers, like MVP4, also play a critical role. We must partner with small and micro-businesses to ensure they have a solid 1–5 year business plan—one built on the right combination of people, product, plan, and profit—before launching or to prevent them from going under indefinitely.

If government and business experts can identify the right ROI formula for small businesses and cut the bankruptcy rate in half—from 70% to 35%—everyone wins: businesses, families, communities, and Canada as a whole.