Frank Stronach: Government bureaucracy is the cholesterol clogging up the economy

Back in the early 1980s, when commercial computers first came onto the market, they were sold with a big promise: they could do the work of an entire floor of employees in a typical office building and could dramatically decrease the amount of paperwork and paper filing for businesses and organizations.

The facts bear this out: government spending as a percentage of National GDP was around 16 per cent in the late 1950s and then it more than doubled in the early 1960s and has steadily grown ever since then, sitting at around 44 per cent today.

Who suffers most as a result? Canadian taxpayers, for sure, since they have to foot the bill for the expansion of our bureaucracy.

Think of commerce as the arteries of our economy, and think of government bureaucracy as the cholesterol clogging everything up.

Government is micro-managing small business to death. All the additional red tape and regulations haven’t made them more competitive or more profitable. On the contrary, it is crippling them.

In a pre-budget submission prepared by the Chartered Professional Accountants of Canada (CPA Canada) in fall of last year, the national accounting organization urged the federal government to act on a Canada Revenue Agency task force report issued in 2011 that identified 61 areas where government could remove regulatory burdens on small businesses. Turns out it was nothing more than another government report collecting dust. More than a decade has passed, and nothing has changed in terms of the paperwork and compliance Canada’s small business and startups get saddled with.

But the best course of action government can take is to completely eliminate any income tax on any business with 300 or less employees. By doing this, small businesses can re-invest their profits in developing new products and hiring more employees to fuel continued growth and expansion.

On the other hand, large businesses — those with more than 300 employees — should be required to share 20 per cent of their annual profits with employees.

But when businesses get really large, those personal bonds slip away. Employees often become numbers. The founders of the companies are usually long gone, having died or sold their business, and the business is now run by a large pension fund or hedge fund. There’s no real affinity for the workers — and the workers know it.

By requiring large businesses to share profits, employees get a fair share of the wealth they help generate, and because they get a slice of the economic pie, they work harder to make the company more profitable. It’s a classic win-win scenario: workers get more pay in their pockets, and companies become more productive and profitable.

It’s distressing to see the number of emails I get from National Post readers who say they’re ready to throw in the towel with their small businesses because they are tired of the red tape, bureaucratic obstruction and high taxes. That’s a shame in a country that was built on the backs of thousands upon thousands of small business owners.

It’s high time we gave Canada’s small business owners the freedom and the space to do what business was meant to do: sell products and services that people want and need, create jobs, and generate economic wealth.