Once a year, The World Bank tackles the issue of the ease of “doing business” in various countries across the globe. Canada ranked #3 for “Starting a Business” in 2012, behind New Zealand and Australia (hat tip Inc. Magazine); that’s the good news. Overall, Canada ranked #13 for ease of doing business, falling one notch versus last year’s study.
But it was the woeful “Access to Credit” rank that holds the nation back: The nation is #24 on that front, down from #21. Canada is Top 10 when it comes to “starting a business”, “protecting investors”, “paying taxes” and “resolving insolvency”. But 24th on the Access to Credit front, despite all of the advertising that was being done by The Business Development Bank of Canada (see prior post “BDC bumps advertising spend 173% post-recession” July 15-11) and the general health of the domestic economy.
I guess neither the BDC nor the Canadian banking fraternity are holding their own when compared to other global markets if things have slipped over the past year. The U.K. ranks #1; Hong Kong, New Zealand and the U.S. #4; Singapore, Korea, Ireland, Australia, and Israel are tied for #8, among others. The U.K. and Ireland have been through a terrible banking crisis, and the U.S. regulators are obstensibly being much tougher on their domestic banks. Yet none of that pain has impacted an entrepreneurs ability to access credit south of the 49th parallel.
These are the key trading partners and competitors, and the trend is not our friend. Something isn’t working. Is it a lack of suitable government programs? Indifference? No small banks to cater to entrepreneurs? BDC’s move to ever-larger credits for ever-larger companies? Tougher local lending standards?