Small business creation

Nothing like Fraser coming along and telling you what I have been saying for years. But than again, I don’t have the brand of Fraser, now do I?

A Fraser Institute report recently ranked New Brunswick’s small business creation rate the second worst in North America. Only P.E.I.’s record is more dismal. The leaders of the pack were Alberta (nationally) and Nevada (continentally).

But the TJ story on this is so right on the mark. I could have written this myself. In fact, I wish I had:

Some have taken this as an indication that the provincial government should be pulling out all the stops to create a business environment more favourable to small operations. They’ve suggested measures that range from lowering the small business tax rate to reducing the interest on and increasing the availability of loans for small business startups.

We believe the statistics send a very different message. What Alberta and Nevada have demonstrated is not that small businesses thrive on government subsidies, but that growth in the small business sector follows growth in big business. New Brunswick will be further ahead in a decade if it can attract major employers and spur concentrated technological and industrial development, injecting tremendous amounts of cash into the provincial economy.

This is a hallelujah moment. I don’t think I have ever seen the media talk about the symbiotic relationship between small and large businesses. Never. The true is that everywhere you see successful small business growth, you see strong large business growth and investment.

Small businesses emerge to support the economic activity generated by large businesses – through supply chains but also to support the new employment base. If you have 1000 new workers at an IBM facility, you need new restaurants, new retail stores, etc.

Large businesses spin out disaffected staff who then become the entrepreneurs (look at Ottawa and the Nortel downsize – it led to dozens of successful small firms and look at Saint John and Aliant’s downsize to see a similar thing).

And we have a real live example in New Brunswick of what not to do. Former Premier Lord cut small biz taxes to the bone. He eliminated ‘red tape’. He made small businesses key to his ‘made in New Brunswick’ solution – and was rewarded with the second worst rate of small business creation in North America.

Thanks a heap, CFIB.

I am starting to like the TJ more and more each day. I might just go and work for them 🙂