CFIB/Scotiabank report suggests more support would ‘empower’ immigrant entrepreneurs
As Canada navigates economic challenges – including heightened Canada-U.S. trade tensions this week – a new economic report commissioned by the Canadian Federation of Independent Business concludes it is essential for all entrepreneurs – including immigrants – to be set up for success.
Assisting newcomers
With that in mind, the report (From Challenges to Opportunities: The Newcomer Entrepreneurial Experience in Canada), looks at the leading hurdles facing newcomer entrepreneurs and their motivations for starting a business in Canada.
It also includes recommendations to policymakers and financial institutions on how to better support these important contributors to the country’s economy.
Sponsored by Scotiabank, the report notes that newcomer entrepreneurs – those who have been in Canada less than 10 years – own more than 7 per cent of enterprises in Canada, although they face unique challenges impacting their entrepreneurial growth and integration in the broader business community.
Entrepreneurial experience
“It takes a lot of courage and resilience to move to another country and open a business,” says Marvin Cruz, CFIB’s director of research and the report’s co-author. “Newcomer entrepreneurs play a crucial role in enhancing the Canadian business landscape and economy by bringing in diverse perspectives and skills.”
The top challenges facing newcomer entrepreneurs include securing financing (considering their limited credit history in Canada), navigating government regulations and compliance, building trust and networks, overcoming culture and communication differences, and accessing information and resources.
A range of backgrounds
Newcomer entrepreneurs choose to start a business in Canada for a wide range of reasons, including their previous entrepreneurial experience from their country of origin, access to market opportunities, the country’s strategic location, the pursuit of autonomy and financial success, and the appeal of a high quality of life and safety.
“As Canada navigates economic challenges, including Canada-U.S. trade tensions, strengthening entrepreneurship is more important than ever,” says Francesca Basta, CFIB’s research analyst, who was also a co-author of the report.
“To enhance Canada’s productivity and global competitiveness, it’s essential that all entrepreneurs, including newcomers, are set up for success,” she continues. “That’s why it’s important for policymakers and financial institutions to provide better and ongoing support to Canada’s newcomers in their entrepreneurial journeys.”
Role of policymakers
CFIB recommends that policymakers work to increase awareness of existing government grants and support programs, create an easily accessible and centralized platform to host critical information on tax rules, labour laws, and licensing requirements, and simplify regulatory compliance while enhancing customer service.
CFIB also recommends expanding immigration options for foreign entrepreneurs in Canada and to continue to support and promote newcomer organizations and settlement agencies that have proven to be effective.
As well, it is suggested that financial institutions should continue to promote mentorship programs and financial literacy resources, remove barriers to improve access to capital for newcomer entrepreneurs and simplify the banking setup process.
Immigrant entrepreneurs
According to the report, immigrants are more likely to be entrepreneurs than individuals born in Canada. While immigrants make up 23 per cent of the population, they own 28 per cent of Canadian enterprises. Additionally, immigrant owned businesses have similar longevity to those owned by Canadian-born entrepreneurs, with 80 per cent lasting two years and 58 per cent lasting seven years.
“As the country seeks to enhance its global competitiveness, the role of newcomer entrepreneurs – those who have immigrated to Canada within the past 10 years and are starting, managing, or expanding a business – has become increasingly important,” the report states.
Perspectives and innovation
“They bring diverse perspectives and innovative ideas which enrich and contribute to the vibrancy of Canada’s business landscape. For many, entrepreneurship is a conscious and empowering choice, allowing them to not only forge their own path to success in Canada, but to create jobs and contribute to local economies.”
“Considering most businesses in Canada are small, supporting newcomer entrepreneurs is crucial for driving growth and innovation in this sector,” the report maintains. “As Canada’s productivity remains stagnant, and business openings are struggling to outpace closures, immigrant entrepreneurs play an essential and needed role in strengthening the Canadian business landscape.”
Favourable survival rates
In addition to underlining their resilience, the report says immigrant entrepreneurs play an important role leveraging their international background and knowledge to expand Canadian trade opportunities. It found that the survival rates of immigrant-owned businesses are comparable to those of businesses owned by Canadian-born entrepreneurs.
After two years, on average, 78 per cent of businesses owned by immigrants remained in operation, compared to 80 per cent of those owned by Canadian-born entrepreneurs. After seven years, the survival rate was 56 per cent for immigrant-owned businesses, closely mirroring the 57 per cent for Canadian-born entrepreneurs.
The report notes that newcomer entrepreneurs bring immense potential to Canada’s economy, but face unique barriers that can impact their growth and integration. It concludes that strengthening support systems for newcomer entrepreneurs “would empower them to thrive, unlocking their full potential and enriching Canada’s business landscape.”
