A Focus on Small and Medium-sized Enterprises (SMEs)

Small and medium-sized enterprises (SMEs) are defined as firms with fewer than 500 employees. These businesses make an important contribution to the Canadian economy. Consider:

• SMEs account for 99.9 percent of the total 2.3 million businesses operating in Canada.
• In 2008, SMEs represented nearly all of Canada's employers (99.7%) and employed almost two-thirds of Canada's private sector workforce.

Doing business in Canada means that a business must deal with the cumulative requirements imposed by three orders of government – federal, provincial/territorial and municipal. Results of an Organisation for Economic Co-operation and Development (OECD) study of 11 countries — Businesses' Views on Red Tape: Administrative and Regulatory Burdens on Small and Medium-sized Enterprises — indicated that paperwork burden per employee in the smallest companies was found to be more than five times higher than for larger firms. A Statistics Canada's November 2007 Survey of Regulatory Compliance Costs shows that Canadian small businesses with 1 to 4 employees incur at least seven times more costs per employee than its larger counterparts.

The Government of Canada recognizes paperwork burden as a priority in Advance Canada and subsequent budgets including the Canada's Economic Action Plan.

Budget 2010 announced the creation of the Advisory Committee on Small Business and Entrepreneurship (ACSBE), a private sector committee created to provide the government with advice on how to further improve business access to federal programs and information.