The Canadian Cultural Advantage: Why Strong Company Cultures Drive Innovation, Talent Retention, and Economic Growth
Canada has a once-in-a-generation opportunity to define itself as the best place in the world to build a business and a career. But that only happens if we get workplace culture right.
As the U.S. moves toward political and economic unpredictability, some corporations are gutting Diversity, Equity, and Inclusion (DEI) programs under the guise of legal pressures. Companies like Bank of America, Meta, and Amazon are backtracking on their investments in employees. Others—like Costco—are doubling down on investing in people because they know it’s a competitive advantage. The businesses that prioritize workers, invest in their people, and develop an engaging workplace culture win in the long run.
This is not just about fairness; it’s about economic survival. Canada’s ability to withstand economic uncertainty and global downturns hinges on investing in people and fostering strong, future-proof businesses – of all sizes. The question is whether we seize this moment—or let our workforce and unique business ecosystem become another disposable asset in a short-term profit play.
The SME Advantage: Small Businesses, Big Impact
Canada’s business backbone is its small and medium-sized enterprises (SMEs), which accounts for over 97% of businesses and nearly 70% of the workforce. These businesses aren’t stepping stones to corporate careers; they are economic engines driving innovation, stability, and wealth creation. SMEs generate half of Canada’s overall GDP and create world-famous destinations – which create more national value and wealth equality than chainified U.S. city streets.
Yet, SMEs are often left out of discussions on workforce investment. Unlike large corporations with massive HR budgets, small business owners are flying blind—learning on the go, managing teams without structured HR, and navigating rising costs while trying to retain employees.
Investing in people doesn’t require billion-dollar programs. It starts with fundamentals that are doable by even the smallest businesses: fair wages, paid sick days, predictable scheduling, and growth opportunities. The businesses that invest in people through basics like these reduce turnover, increase productivity, and create workplaces that employees want to stay in – which creates stability during uncertain economic times.
The Business Case for Investing in People
- Retention Saves Money – High turnover is expensive. In retail, turnover averages 60%, but at Costco, where wages and benefits are higher, it’s 8%. It costs companies thousands of dollars to lose just one employee, so achieving turnover reductions like this represent massive cost savings.
- Productivity increases – Unengaged employees cost businesses 20% of their salary in lost productivity. The companies that invest in their workforce see direct bottom-line benefits, and the Canadian economy doesn’t waste valuable resources at a time when our revenues are already taking a hit.
- Fuels hiring and sales – 54% of Gen Z won’t apply to workplaces that lack commitments to fairness and inclusion. A strong workplace culture is a competitive edge in hiring, and talented staff foster loyal customers who spend money at Canadian businesses.
What Needs to Change
Most Canadian companies are running on thin margins, balancing quickly rising rent and insurance – and now they’re facing unstable supply chain costs. And yet, businesses that invest in people consistently perform better. We’d think more businesses would turn to this solution at such a critical time – so why isn’t this the norm?
- Lack of Access to HR Support – Small businesses struggle with talent retention because they don’t have the same HR resources as major corporations.
- Short-Term Financial Pressures – Employers know investing in workers pays off, but when rent-seeking landlords, rising insurance premiums, and supply chain issues squeeze profits, long-term investments feel out of reach.
- Government Policy Gaps – Programs like Digital Main Street helped SME modernize during the COVID pandemic. A similar initiative—a $2,400 grant to support higher wages tied to a career growth plan in SMEs —could jump-start investment in workers, giving small business owners the confidence to adopt new worker benefits that also circulate more wealth locally.
At even the smallest of employers, this type of initiative would help employers visualize upskilling their workforce as a tangible asset – not just theory – that puts wealth into front-line workers pockets who then circulate cash in local economies across Canada.
Keeping Canadian Businesses Canadian
An owner retiring doesn’t have to be the end of a business’s lifecycle. Similarly, owners looking to retire shouldn’t be forced to sell to U.S. buyers or large private equity firms that extract profits and cut jobs.
Canada is a country of entrepreneurs – but that doesn’t have to mean launching their own business. Buying a business is a great alternative for entrepreneurs that keeps continuity for workers & communities who rely on the goods or services provided by that enterprise.
Over the next decade, a trillion dollars of business assets will be up for sale. Canada has eager local entrepreneurs ready to invest in a business – but often lack access to financing. It’s no surprise many retiring business owners have trouble finding non-institutional or private-equity buyers.
Those business assets will either melt away or be exploited by already-wealthy investment firms. Lowering capital gains tax on sales to employees or local buyers ensures businesses stay in Canadian hands, providing opportunities to build wealth and generate more revenue.
The Canadian USP: Culture as a Competitive Edge
Unlike the U.S.’s “melting pot,” Canada has long valued our diverse people and cultures as a strength. This has shaped our business leadership, workforce resilience, and global economic positioning. But cultural leadership is not accidental—it must be built.
What does great workplace culture look like?
- Leadership that fosters trust and growth.
- Transparent hiring and promotion practices.
- Opportunities for upskilling and career advancement.
- Employee input in decision-making.
- Time for workers to invest in themselves and their communities.
At the Better Way Alliance, our members prove this works. Artery Community Roasters built an entire business around employing and paying people with disabilities a living wage, and they’re now a recognized and profitable brand. Plum.io helps businesses use data-driven hiring to engage and retain workers, generating consistent results for themselves and for their clients.
Canadian companies that purposefully invest in their people don’t just survive, they innovate and outperform competitors.
The real risk is ignoring people-focused investment
Businesses pulling back on workplace investments are playing a dangerous game. U.S. companies slashing DEI and talent investment are slashing their opportunity to beat their competition by 3 percentage points and reduce their attrition rate by 50%.
Canada needs to signal a completely different market environment. A market where businesses invest in people is a market where businesses win.
Companies that prioritize culture, leadership development, and fair workplaces will attract the best talent and position themselves for long-term success. Government programs that spur investment in people and productivity at-scale will boost resilience at a time when it’s needed the most.
Building a Stronger Canada, One Business at a Time
Now is the time for business owners to lean into the fundamentals that drive retention and productivity. Buy Canadian shouldn’t just mean buying Canadian goods. It MUST mean supporting Canadian businesses that invest in their workers, regardless of where their products are made.
If we want to reduce economic reliance on the U.S., we must strengthen our SME ecosystem—not by cutting costs or gigifying our workforce, but by building workplaces where people want to stay, grow, and lead.
Let’s make culture in every company Canada’s great competitive advantage.