Alberta Index - ECONOMY: Alberta has country’s highest rate of small business creation, says Fraser Institute

ECONOMY: Alberta has country’s highest rate of small business creation, says Fraser Institute

(AlbertaIndex, December 18, Tuesday) --- Alberta has the country’s highest net business creation rate of 2.4 per cent and the 11th highest in North America, according to a study by the Fraser Institute.

It rated Ontario as second to Alberta, and the 21st highest in North America with a net business creation rate of 1.9 per cent. British Columbia was placed 24th with a rate of 1.7 per cent.

The study concluded that the US is more successful than Canada at encouraging entrepreneurs and creating new businesses.

Newfoundland, Saskatchewan, Nova Scotia, New Brunswick, and Prince Edward Island occupy the bottom five spots among the 60 jurisdictions.

In fact, Saskatchewan, Nova Scotia, New Brunswick, and Prince Edward Island recorded negative net business creation rates – meaning they actually lost businesses over the time period studied.

The peer-reviewed study found Nevada had the highest net small business creation rate at 5.2 per cent, followed by Florida (4.7 per cent) and Utah (4.5 per cent). They are followed in order by Idaho, Montana, Virginia, Georgia, Missouri, Arizona, and Delaware, which shows a diverse geographic pattern of entrepreneurial success across the US.

Using data provided by Statistics Canada, the study measures the creation of new, small businesses during 2002 and 2003 in all 50 US states and 10 Canadian provinces as well as comparing the number of new businesses to the number of firms that go out of business each year to come up with a net measure of business creation.

“In recent years, governments have recognized the importance of small businesses and have begun instituting policies to encourage small business development and entrepreneurship,” said Jason Clemens, Resident Scholar in Fiscal Studies.

“A province with a negative rate of new business creation clearly has not enacted the correct type of policies to encourage business or improve its economy.”

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