How Ottawa can help small businesses digitize, grow amid economic recovery

The federal government’s Speech from the Throne rightly recognized small businesses as the lifeblood of communities and the backbone of the economy. While the ripple effects of pandemic-related shutdowns in local, regional, and national economies have been devastating—particularly for small businesses—these businesses will attest that e-commerce has been essential to their survival. Canadian companies are generally estimated to be two years behind American businesses in their e-commerce journey. Weeks into the pandemic, millions of Canadians went online to meet their basic needs. Overnight, small businesses that previously felt e-commerce was a luxury quickly digitized. From a gift shop in Newfoundland to a dance school in Vancouver, sales for almost everything went digital, including groceries, educational tools, and specialized products and services never before sold online. At the same time, many of these businesses discovered their potential for exports. Lynn and Liana Serveware, a family business based in Steinbach, Man., makes its signature line of cutting boards and serve-ware from Canadian maple. They realized during the pandemic that e-commerce presented an opportunity to sell their products to global markets. Their international orders surged as people cooked at home like never before. While the pandemic will eventually end, this new way of doing business is here to stay. As the federal government looks to help small businesses and entrepreneurs adapt, survive and thrive, it must consider the rapidly growing role of e-commerce and fintech in Canada’s economy. Businesses and consumers continue to do their best to stay afloat in a sea of uncertainty. The Canada Emergency Response Benefit, Canada Emergency Business Account, and other government response measures have helped, but many small businesses are still struggling. A recent Salesforce Canada survey suggested that 30 per cent of business owners felt unprepared to reopen their brick-and-mortar stores. More than half know they need technology to remain relevant, but don’t know where to start. All levels of governments must create the conditions for businesses to succeed now and in the future. With the right mix of regulation and oversight, the government can help foster adaptation, innovation, and growth in a new era of digital commerce. Making e-commerce more convenient, affordable, and secure has never been more critical. Policymakers must enable the safe, efficient, and reliable movement of money to encourage business investment in the financial tools needed to recover, evolve, and grow. Part of that is moving forward with legislation for the retail payments oversight framework, as announced in the 2019 federal budget. This important step will help ensure the online payment system has proper oversight to operate effectively and safely, supporting a thriving digital payment ecosystem in Canada. Empowering businesses through open banking Fintech companies can help fill critical gaps in the rapidly evolving financial services sector. Continued industry-government collaboration on the development of regulations can ensure consumer protection and privacy while fostering healthy innovation and economic growth. We encourage the federal government to resume consultations on open banking and implement actions to provide Canadians with more control over their financial health. The Senate Banking Committee supported open banking last year, noting that the rapid adoption of new financial technologies in this country has created the need for fintech companies to be able to access data securely and seamlessly. While open banking is consumer-centric, it also has the potential to empower small businesses through secure and effective data sharing. We must seize the opportunities this system provides to put Canadians on a level playing field with other nations that are already moving ahead with the open banking model. There is no turning back to the old ways of doing business. As we navigate our way out of this public-health crisis, Canada has a historic opportunity to realize the full potential of digital commerce and create a more inclusive retail and financial system that works for everyone. With the right resources, tools, systems, and public policy, we can position Canadian businesses for an innovative and resilient recovery and success on the global stage. Nicole Hurtubise-Watts is head of government relations for PayPal Canada. The Hill Times