Fraser Forum

William Watson: The business of Canada depends on business

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U.S. President Calvin Coolidge said in 1925 that “The chief business of the American people is business,” a line often mis-quoted as “The business of America is business.” No Canadian prime minister has ever dared be so pro-business. The business of Canada, they’ve argued, is getting along with one another or showing the world diversity works or being self-consciously non-American in North America.

But the wise ones have understood that doing whatever the business of Canada is requires doing plain old business well, too. Whatever your social goal is, unless it’s anti-materialism, having higher incomes helps. As Coolidge said in the same speech in 1925: “The accumulation of wealth means the multiplication of schools, the increase of knowledge, the dissemination of intelligence, the encouragement of science, the broadening of outlook, the expansion of liberties, the widening of culture. Of course, the accumulation of wealth cannot be justified as the chief end of existence. But we are compelled to recognize it as a means to well nigh every desirable achievement.”

Given the social importance of business, it’s interesting to see where Canada ranks in the World Bank’s latest assessment of countries’ friendliness to business, which came out this week.

The good news: In the “Ease of Doing Business” index we rank 14th among 189 countries, just behind Australia and just ahead of Germany, which is pretty good company. Singapore and New Zealand are Number 1 and 2, the U.S. is 7th. Also, we’ve moved up a step this year.

On the other hand, our moving up isn’t actually our own doing. 122 countries overall made reforms last year that increased the ease of doing business inside their borders. But we didn’t. Which makes this the second year in a row in which we haven’t made any pro-business changes that show up in the index. Other countries are getting smarter in their approach to business. We’re apparently happy with the status quo.

As with most such indexes, the devil but also the interesting bits, is in the details.

Among our strengths are:

  • Starting a business (3rd overall: only two procedures taking 1.5 days);
  • Getting credit (7th overall); and
  • Paying taxes (9th overall: only eight payments a year, time devoted to it: 131 hours), which will be a surprise to many small business owners.

Where we can improve:

  • Dealing with construction permits (only 53rd overall: 12 procedures, 249 days to complete on average);
  • Getting electricity (only 105th overall: 7 procedures, 137 days);
  • Enforcing contracts (49th overall: 570 days to completion;
  • Quality of judicial process only 10.5 on a scale of 0 to 18); and
  • Trading across borders (only 44th overall with a score of 88.4 out of 100 on an index of ease of trading).

Canada is a big, federal country and the World Bank didn’t sample all our provinces. In fact, the data for Canada reflect a CBC-style view of the country: they’re for Toronto only.

Things may be better outside Ontario. But there was lots of talk during the recent election campaign about how the entire country’s economic performance has been disappointing over the last few years. If we want to do better, making things easier for business is bound to be part of the solution. Whether you’re content to let business keep the money it has earned or whether you want to use it to further whatever you believe the real business of Canada to be, making economic activity easier can only help.

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