Here’s where entrepreneurs should base their businesses

CFIB determines the best Canadian cities for startups

Here’s where entrepreneurs should base their businesses
Steve Randall

The tenth annual analysis of Canada’s most entrepreneurial communities has put Whitehorse, YT at the top.

The Entrepreneurial Communities report from the Canadian Federation of Independent Businesses ranks the Yukon Territory the best based on several metrics including demographic measures, earnings levels, optimism, growth plans and local tax policy.

Winkler (MB), Victoriaville (QC), Rimouski (QC) and Rivière-du-Loup (QC) complete the top five.

“Small businesses are the backbone of the Canadian economy, bringing jobs, new products and a sense of identity to their communities,” said CFIB vice-president and chief economist Ted Mallett. “We want to celebrate that and congratulate the cities that have landed on the top of our list this year by embracing entrepreneurial values and understanding the needs of small business owners.”

Big cities less impressive
The rankings of Canada’s largest cities are in the bottom half of the list because they may face greater competition and costs.

Kelowna is 16th, Sherbrooke is 19th, and Trois-Rivières is 20th.

Property taxes play a key role in entrepreneurial-friendliness and one of the factors used to determine the rankings was the ratio between commercial and residential property taxes in each municipality.

Nearly all local governments tax commercial properties at much higher rates than residential properties, placing a major constraint on local businesses, already struggling to remain competitive amid their tax burden.

Commercial property rates can be up to 4.5 times higher than residential rates in some jurisdictions.

“What the top communities have in common is strong policy that supports small business owners and fosters entrepreneurship, namely close ratios between residential and commercial property taxes,” added Mallett. “Businesses don’t use municipal services as heavily as residents, so ideally, we would see a more equal distribution of the property tax burden between them. Instituting more business-friendly commercial property tax rates is something that every community can do to make it easier on its citizens to start and run a small business.”