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Ross Simmonds: Embrace capitalism, save Canada

This country needs more entrepreneurs

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Canada is losing its entrepreneurial soul. The country has 100,000 fewer entrepreneurs than two decades ago despite adding 10 million people, its provinces rank below all 50 U.S. states on economic freedom, and the middle class is drowning in record household debt while government expands at twice the rate of the private sector.

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Here’s the reality: The C-Word… capitalism needs to be embraced. Not rejected by Canadians.

Ross Simmonds: Embrace capitalism, save Canada Back to video

That drop of 100,000 entrepreneurs from 20 years ago happened even as the population grew 28 per cent. The new entrepreneur rate has been cut in more than half. It went from three per 1,000 Canadians annually in 2000 to just 1.3 per 1,000 in 2022. The Business Development Bank of Canada Chief Economist Pierre Cléroux warned in 2023 that this “Simply can’t be ignored, because new businesses are responsible for almost all net new job creation in this country.”

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Unfortunately, the trend may be accelerating. Statistics Canada payroll data for December should wake everyone up. Almost every industry is seeing significant job losses except for health care and construction. Through October 2025 the business opening rate dropped to 4.5 per cent while closures rose to 4.9 per cent, though it rebalanced the following month.

Total employment declined by 84,000 (-0.4 per cent) in February and the employment rate fell 0.2 percentage points to 60.6 per cent.

Our businesses are closing at a rate higher than our businesses are opening. So when the Canadian Federation of Independent Business confirms there have been five consecutive quarters of negative net business creation and the Globe & Mail asks the question: Out of nowhere, Canada became poorer than Alabama. How is that possible?

The answer should be obvious…

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We have more businesses dying than being born, in every province except Quebec.

Self-employment tells the same story. The self-employment rate has fallen from a peak of 17.2 per cent in 1998 to 13.2 per cent in 2023. But here’s some good news (sarcasm) since January 2019, public-sector jobs rose almost 21.9 per cent while our private-sector payroll positions increased 10.4 per cent.

Business insolvencies surged to 6,188 in 2024 (spoiler – that’s the the highest since the Great Recession) and was a 28.6 per cent jump from 2023. And while it’s just the opinion of a small minority in Canada, 67 per cent of small businesses cite tax and regulatory costs (aka the government) as their top constraint.

Which takes us to the one thing growing in Canada. Over the past decade (2015–2024), those employed in the public sector grew 27 per cent, or by 950,000 jobs and doubling the job growth of 13.4 per cent in the private sector. The federal public service alone ballooned from roughly 257,000 employees in March 2015 to 367,772 by March 2024. This is a 43 per cent increase against a 14 per cent population growth.

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Think about this comparison. California and Canada have almost identical populations. We both hover around 40–41 million people. Yet the public sectors look quite different. Both governments are considered to be left leaning. But there’s a very key difference/

According to Calbright College, California’s state and local public sector is the second-biggest industry in the state by employment, with a workforce of 2.3 million. That figure excludes federal workers employed within the state. If you include the federally-supported jobs (roughly 350,000+ federal civilian workers based on California’s share of the U.S. population), you’re looking at around2.6–2.7 million total public sector workers, or roughly 14–15 per cent of the state’s workforce.

In Canada, public sector employees totalled 4.4 million, or 21 per cent of the total workforce.

Despite being virtually identical in population, Canada’s public sector is roughly60–70 per cent larger than California’s in absolute headcount, and meaningfully larger as a share of the workforce (21 per cent vs. 14–15 per cent).

Unfortunately, the “Canadian dream” is for some reason to get a pension in the government rather than build a business that pays you through retirement.

This isn’t how it should be.

Let’s fall in love with capitalism again because it’s the private sector that pays for everything. Over 65 per cent of all taxes in Canada are paid by the top 20 per cent of earners.

If you love this country and want this country to thrive with all the social benefits and safety nets, the best thing you can do is create wealth and income in the private sector.

The private sector funds the public-sector salaries and pensions, hospitals and schools. The private sector funds the food programs, the social justice programs, the rebates, the senior programs, the government backed scholarships, the subsidized housing and all the endless programs Canadians use every day. Every hospital bed, every teacher’s salary, every pension check. It’s the private sector that foots the bill through innovation, and jobs that actually create economic value that the system rewards with financial gain.

In any economic system (especially one like ours) real, sustainable value comes from producing goods and services that people voluntarily pay for, from innovating solutions to problems, from taking risks to build something that generates revenue and employs people.

That’s where wealth (and taxes) originate.

The public sector is essential for redistribution, infrastructure, safety nets, and collective goods, but it doesn’t create net new wealth for the provinces or country at large.

Capitalism rewards value creation with profit, which incentivizes more of it. When we glorify secure government jobs and defined-benefit pensions as the ultimate goal, we subtly discourage the very risk-taking and innovation that keep the whole system funded and growing.

Canada actually punches above its weight in early-stage entrepreneurial activity compared to most G7 peers (often ranking at or near the top in recent Global Entrepreneurship Monitor reports), yet too many still see the “safe” path as the aspirational one.

We need more builders. More creators. More innovators. More entrepreneurs. If we want to keep the good stuff like universal healthcare, strong social programs, a high quality of life then we have to keep celebrating and enabling the people who create the value that pays for it all.

Ross Simmonds is the founder and CEO of Foundation, a B2B growth marketing firm based in Nova Scotia.

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