Calgary, Saskatoon best cities to start a business: survey

Western Canada is driving Canada’s entrepreneurial spirit, accounting for six of the top 10 communities in which to run a small business, a new survey shows.

The Canadian Federation of Independent Business (CFIB) says the Calgary area, followed by the city of Saskatoon, are among Canada’s top entrepreneurial cities in 2013.

The study was released during Small Business Week, now taking place across Canada, and is a tribute to both the people who start their own shops, as well as the government policies that help support them.

“Small business development is extremely important to the long-run health of a community. It’s why these communities started in the first place,” says CFIB chief economist Ted Mallett and author of the report with colleague Simon Gaudreault.

In many instances, it was the regions around major centres such as Toronto, Calgary and Vancouver that scored highest on the list, Mr. Mallett noted.

For instance, communities in the Greater Toronto Area and Greater Calgary were among the top 10, but not the cities themselves.

Mallett says that’s because municipalities around big city centres often have lower rents and a more competitive tax base, which are incentives for small businesses.

Still, both the Greater Edmonton area and the City of Edmonton were on the top 10 list. In Quebec, both Sherbrooke and Saguenay also made the top 10, scoring 5^th and 10^th, respectively.

“It may seem obvious, but one of the surest signs of an entrepreneurial hot spot is the presence of a high concentration of entrepreneurs and a high business start-up rate,” the report states. “It is also important that business owners have high levels of optimism and success in their operations. Good public policy is also critical.”

The study looked at cities with populations of 25,000 or more people, and across 14 indicators in three categories: Presence; which is the scale and growth of small business; Perspective; including optimism and growth plans; and Policy; which is business taxation and regulation that is friendly to entrepreneurs.

Cities in Western Canada dominated the list in part because of the support entrepreneurs receive from the resource economy. It explains why businesses in the outskirts of Calgary ranked highest for the second year in a row, as the oil and gas industry continues to boom.

St. John’s, Saguenay and Saskatoon were among the most upbeat entrepreneurial cities, while Vancouver and Greater Toronto tied for having the most presence. Greater Edmonton and Greater Calgary beat out their peers across Canada for having the best government policies aimed at small business. Then there's the fact that Alberta has no provincial tax.

“Despite the millions of influences that affect community growth, nothing would happen if it weren’t for individuals making entrepreneurial decisions to hire, invest or innovate,” the report says. “The more of those people in a community, the stronger the growth that follows.”

Top 10 Entrepreneurial Cities (score out of 100)

1. Greater Calgary 68 (ranked 1^st in 2012)

2. Saskatoon 67 (2^nd in 2012)

3. Greater Toronto 65 (5^th)

4. Greater Edmonton 64 (3^rd)

5. Sherbrooke 62 (7^th)

6. City of Edmonton 61 (6^th)

7. Regina 61 (4^th)

8. Kelowna 59 (15^th)

9. St. John’s 58 (8th)

10. Saguenay 58 (10^th)