Entrepreneurial Finance and Economic Growth: A Canadian Overview

Abstract

Commentary No. 536 February 2019 Financial Services and Regulation he C.D. Howe Institute's reputation for quality, integrity and nonpartisanship is its chief asset. Its books, Commentaries and E-Briefs undergo a rigorous two-stage review by internal staf, and by outside academics and independent experts. he Institute publishes only studies that meet its standards for analytical soundness, factual accuracy and policy relevance. It subjects its review and publication process to an annual audit by external experts. As a registered Canadian charity, the C.D. Howe Institute accepts donations to further its mission from individuals, private and public organizations, and charitable foundations. It accepts no donation that stipulates a predetermined result or otherwise inhibits the independence of its staf and authors. he Institute requires that its authors disclose any actual or potential conlicts of interest of which they are aware. Institute staf members are subject to a strict conlict of interest policy. C.D. Howe Institute staf and authors provide policy research and commentary on a non-exclusive basis. No Institute publication or statement will endorse any political party, elected oicial or candidate for elected oice. he views expressed are those of the author(s). he Institute does not take corporate positions on policy matters.

Thin Capitalization: Weak Business Investment Undermines Canadian Workers

“…A recent report on the importance of private equity in stimulating investment and growth highlights three other areas where policy could better support domestic capital formation. First, exempting gains on share sales of small businesses with gross assets 2 0 below $50 million that have been held for at least five years from capital gains tax, as the US does, could improve the environment for small businesses seeking to scale up (Lortie 2019). Second, more opportunities to invest in Canadian infrastructure could attract Canadian institutional investors, particularly pension funds, which currently look abroad for assets that match their long-term liabilities (Dachis 2017).…”