This publication presents the OECD country review of small and medium-sized enterprise (SME) and entrepreneurship policy in Canada. The report is part of the country review series of the Working Party on SMEs and Entrepreneurship and undertaken by the OECD Centre for Entrepreneurship, SMEs, Local Development and Tourism.

The SME and entrepreneurship policy reviews are undertaken in countries that express an interest in co-operating with the OECD on an external assessment of their policy successes and challenges that can be used to help strengthen their policy strategies, programmes and implementation arrangements in this area. Recently reviewed countries include Israel, Italy, Mexico, Poland, the Russian Federation and Thailand. The present review was requested by the Government of Canada, through Innovation, Science and Economic Development, Canada (ISED).

The reviews provide a comprehensive assessment of the structure and performance of SME and entrepreneurship activity, the business environment and framework conditions for SMEs and entrepreneurship, the strategic framework and delivery arrangements for policy, national SME and entrepreneurship programmes and the local dimension of the policy. They include international comparisons of data and policy approaches and offer specific recommendations for the countries concerned, often illustrated with inspiring practices from other countries.

The country reviews may include chapters of special relevance to the country concerned, as agreed between the OECD and the participating country. This report includes a special chapter on policy for women entrepreneurship. Special chapters in other review reports have focused on issues such as cluster development, policy evaluation and the development of medium-sized enterprises.

The methodology for the country reviews includes completion of a fact-finding questionnaire by national government authorities on SME and entrepreneurship conditions, policies and programmes, a study mission to the participating country by the OECD Secretariat and international experts, comments on a draft report by a steering group of members of the OECD Working Party on SMEs and Entrepreneurship and stakeholders in the reviewed country, and a peer review of the revised draft report by government delegates in a regular meeting of the Working Party on SMEs and Entrepreneurship.

Canada is a country with healthy entrepreneurial attitudes and strong performance in many aspects of SME innovation, although business dynamics are slow and SME direct export activity is limited. Small business taxation, regulation and labour market flexibility are favourable but there are weaknesses in some areas of small business finance markets. A number of recommendations are made for strengthening federal programmes for SMEs and entrepreneurship, such as in SME internationalisation, entrepreneurship education, public procurement and entrepreneurship among under-represented groups. The federal Regional Development Agencies and FedNor are playing key roles in adapting SME and entrepreneurship policy to varying local conditions across Canada and there are good arrangements for federal-local policy co-ordination, although local legislation affecting small business could be improved in some areas. The report also points to important federal and local initiatives to increase gender equality in entrepreneurship that could be scaled up.

This report assesses the policies in place before the federal election in November 2015 and does not fully reflect changes in government programmes and initiatives since that date.