How Canada can win AI with Build Canada CEO Lucy Hargreaves | Building The North ep 001

What do you think needs to change to enable more people to feel like they can stay?

A lot of things.

So I will say, because I get criticism sometimes when I go kind of too down the negative track.

It's not typically Canadian to be too pessimistic.

And I am an eternal optimist.

And so I like to keep that top of mind and really look at the really positive, good things.

But we've made it, quite frankly and honestly, we've made it really difficult for entrepreneurs and not only entrepreneurs from a founder's perspective, but, you know, young people who are working in startups and that innovation economy, we've made it really hard for them.

And so there are, you know, a number of things that range from like fairly easy fixes to more complex fixes that I think would, you know, really help send the right signals to encourage them.

The top kind of three or four things that I always talk about in terms of growing our productivity and encouraging entrepreneurs is number one, tax reform.

I know it's kind of a boring topic for people, but when you really start talking to entrepreneurs, you realize that, you know, our capital gains tax structure in Canada is just woefully uncompetitive with what is on offer for entrepreneurs and innovators and investors.

in the United States with the QSBS program.

So we need to change that.

That is a, you know, it's a fairly simple fix and I think would send a really strong signal to innovators and entrepreneurs that we want to retain them here and we want to reward them for taking extremely bold risks that quite frankly don't always pay off, right? You know, if you're starting a startup, you don't know if it's going to work.

You hope it's going to work and you're going to have some sort of exit and financial benefit from that.

But as you know, you both know, not every startup story ends that way.

And so these people are taking enormous risk and we need to use our capital gains tax structure to reward that risk and encourage them.

We also know that U.S. investors and Canadian investors are requiring in their term sheets Canadian founders to relocate to the U.S. so that those investors can benefit from the capital gain structure.

And that's one thing that I would really love to see the government take action on.

So corporate tax structure is also wrapped in there, but I think the capital gains piece is bigger.

Number two, I think we need to do a lot more to open up our markets in this country.

We have a number of highly protected sectors ranging from telecommunications to financial services.

You know, even we can go so far for being a bit spicy to talk about the dairy industry.

But those protected sectors, like when you protect a sector and you don't have open competitive markets, it destroys innovation.

It makes it really difficult for new innovative incumbents to start new companies in those sectors and to offer better services to customers.

And it keeps prices high for consumers.