Factors Influencing Entrepreneurship in Canada

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BUSM4186 - Global Entrepreneurship Research Project

Introduction
Canada is home to over 1,100,000 small and medium-sized businesses (ISED 2019). Collectively,
they account for over 90% of the private sector workforce, employ 10.7 million people, and
generate something in the neighborhood of a trillion dollars in GDP for Canada (ISED 2019). The
backbone of the Canadian economy are the nation's small and medium-sized businesses, which
are essential to both economic development and job creation.
Moreover, Canada is one of the world's most enterprising nations. Numerous worldwide
rankings place Canada favorably in terms of entrepreneurship. However, despite its significance
to the economy, entrepreneurship remains a challenging and demanding profession. This may
explain why Canadians have been less interested in entrepreneurship over the past two
decades (Bouchard and Bédard-Maltais 2019). However, recent trends indicate that a new
generation of Canadian company entrepreneurs has a revived interest in the subject.
In this research, we will examine significant information on the factors that influence the
degree of entrepreneurship in Canada. Next, we will examine the causes that have contributed
to Canada's high degree of entrepreneurship, as well as prospective elements that foster
entrepreneurship. Finally, we will provide future improvement suggestions.
Pertinent Facts
Demographics
Medium-term shifts in the age composition of the workforce are beginning to show clear
effects of the aging of the population in 2022. In fact, during the last three years, changes in the
age structure have been driven by a surge in Canada's senior population, a segment with
dramatically lower labor force participation rates. The drop in the rate of labor force
participation between those aged 55 and above (now 1.9 percentage points below its pre-
pandemic baseline) is attributable more to the natural attrition of this population than to a
deliberate policy of employers to reduce the number of hours their employees put in. There has
been little to no change in the participation rates for different age groups compared to what
was recorded before the epidemic.
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Economic Performance
Despite having one of the fastest recoveries from COVID-19 among advanced economies, the
Canadian economy is facing uncertainty owing to the labor market's significant shortages
(Gellatly and McCormack 2022).
The following chart depicts Canada's economic performance from 2013 and 2021.
2013 2014 2015 2016 2017 2018 2019 2020 2021
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Canada's Economic Performance 2013 - 2021
Exports of goods and services (% of GDP)
GDP growth (annual %)
Employment to population ratio, 15+, total (%) (national estimate)
Unemployment, total (% of total labor force) (national estimate)
Imports of goods and services (% of GDP)
Figure 1. Canada’s Economic Performance 2013 – 2021 (World Bank 2022)
Similar to the first quarter, real GDP growth in the second quarter was 0.8%. The economy has
expanded for four consecutive quarters, gaining 4.6%. The second quarter's total activity was
1.7% more than the last quarter of 2019 prior to the outbreak (World Bank 2022).
After a decline in the first quarter, export volumes (+2.6%) increased in the second. Due in large
part to an increase in purchases of transportation equipment, quarterly import volumes grew
by the maximum (6.9%) since trade activity resumed after the first COVID-lockdowns. Total
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