As Canada looks for ways to grow through a grinding trade war with the United States, our political leaders should remember one thing: Prime Minister Mark Carney’s Canada Strong concept is not just about defending what we have. It's about how we build more, better.
In a few days, Prime Minister Mark Carney will host the first Canada Investment Summit in Toronto, gathering the world's largest institutional investors behind a plan to catalyze $1 trillion in investment over five years.
The summit is a big idea that thrusts Canada into the global limelight. But big funds and big projects are only half the story. To move forward, Canada needs more human capital, too. And right now Canadians have a unique opportunity to co-develop plans to secure that.
Before they fund new pipelines, clean energy, power lines and natural-resource development, global investors need to trust that Canada has the infrastructure to build all these projects. And that includes thousands of small businesses that will either help construct and outfit them or supply these projects once they're up and running.
Currently, however, the country is suffering what the Canadian Federation of Independent Business calls an “entrepreneurial drought,” in which more businesses are closing than opening. With rising taxes, labour costs and economic uncertainty, the CFIB says 55% of Canadian entrepreneurs wouldn't recommend starting a new business today.
Even a trillion dollars in institutional capital cannot build pipelines, ports and power corridors without the small and mid-sized firms that do the actual work. Big capital needs a deep bench of entrepreneurial partners. While the systemic problems the CFIB identified will take time to address, there is one easy policy fix for Canada: open our arms to entrepreneurial talent and capital from around the globe.
This isn’t a new idea. Immigrants built Canada, and they can help us meet the current challenge. According to Statistics Canada[1], foreign-born Canadians are over 40% more likely to own a business than those born here. They create more jobs, export more and invest more in R&D.
Two years ago, in response to public concerns that immigration was growing too fast, Canada paused its programs to attract experienced entrepreneurs from other countries. In January, Carney’s government shelved its landmark Startup Visa program, due to widespread accusations of misuse – and unwieldy processing periods approaching 10 years. Yes, mistakes were made, and changes are needed. But blocking the flow of experienced business owners with capital to invest should never have been the outcome.
Mobile talent with money and hustle is a rare breed, much in demand around the world. While Canada stalls out, other countries are doubling down: last year New Zealand overhauled its investor visa and saw applications jump fivefold. Italy's flat tax on foreign income keeps drawing millionaires to Milan. Many countries will happily accept the entrepreneurs, families and capital that we turn away.
Canada can compete again by reopening the doors to legitimate foreign investors and builders. But let’s do it right this time. Call it strategic immigration. Canada should put out the welcome mat not just for qualified entrepreneurs with startup ideas, but also for investors ready to put their capital and expertise into existing Canadian businesses.
The logic is simple. A pension fund financing an LNG terminal or a transmission corridor generates thousands of contracts that mid-market firms must fill. To galvanize this sector, we can invite immigrant investors with the experience and resources to buy into, recapitalize and modernize these essential suppliers.
To be clear, this is not about attracting passive millionaire families. Canada can target active operators with vetted track records, taking real risks in real businesses. By identifying and wooing this sought-after demographic, Canada can grow the capacity of its business sector without opening its immigration doors too widely.
Just as Carney’s summit will attract the capital for new projects, strategic immigration can help us deliver them.
Attracting these confident newcomers could also help Canada meet another big economic challenge. A Bank of Nova Scotia report found nearly one-third of Canadian business owners plan to sell their businesses by 2030 – yet most have no succession plan, or any strategy to grow their firms. Experienced immigrants with capital are a ready-made supply of new owners for our legacy businesses, and the jobs they represent.
Now is the time for new thinking. Since Ottawa closed its Startup Visa program in January, it has been working on devising a new, “high impact” pilot program to replace it. This pilot stage is our opportunity to build back better. Let’s get strategic investor immigration right: with fast processing times, rigorous vetting to eliminate bad-faith actors, and a clear lane for investors to buy existing businesses (rather than forcing them to start something new).
We encourage the business community, entrepreneurs, investors and immigration experts to suggest the right way to develop a strategic immigration program in Canada now, while the pilot's design is still open.
The trade war will run its course. What Canada builds in the meantime is entirely up to us. Let's spend less energy watching Washington, and more welcoming in the world.
Saeed Zeinali is a Toronto-based entrepreneur who runs NextStars, a multinational advisory platform for entrepreneurs. Rick Spence is the former editor and publisher of Profit, host of the Startup Canada Podcast and an adviser to NextStars.
