Arlene Dickinson Challenges Narrative on Canadian Business Exodus

In a recent LinkedIn post, Arlene Dickinson challenges the prevailing narrative that businesses are leaving Canada solely because the ecosystem is “broken.” Dickinson argues that this portrayal is an oversimplification and that the reasons for companies relocating, particularly to the United States, are more nuanced.

Debunking the “Broken Ecosystem” Myth

Dickinson takes issue with the frequent assertion that Canada’s business environment is inherently flawed, leading to an exodus of companies. She points to data from a National Foundation for American Policy study, which highlights the significant contributions of immigrant founders to US “unicorn” companies. The study reveals that countries like India, Israel, the UK, China, and Canada all produce a substantial number of founders for billion-dollar startups in the US.

“A ‘26 National Foundation for American Policy study shows US unicorn founders come from many countries. India produced 96. Israel produced 60. The UK produced 47. China produced 41. Canada produced 30. So, more than half of all US billion dollar startups have at least one immigrant founder. It’s not a Canada exodus as shown.”

According to Dickinson, this data suggests that the phenomenon is not unique to Canada but is rather a characteristic of strong talent pools situated near a massive capital market. She posits that the success of Canadian entrepreneurs in the US is a testament to the talent generated within Canada, rather than a sign of systemic failure.

Capital and Policy: Part of the Solution

While Dickinson disputes the idea of a widespread Canadian business exodus driven by a broken system, she acknowledges that certain factors within Canada could be improved. She suggests that increasing the availability of growth capital and implementing more favorable tax policies for founders could help retain businesses.

“Some of this is fixable with more growth capital here and better tax policies for founders.”

However, Dickinson emphasizes that even these improvements may not be the primary drivers for companies choosing to relocate, especially when significant US investment is involved. As she notes, the decision to move is often influenced by external financial pressures rather than purely domestic shortcomings.

The Influence of US Venture Capital

A key point Arlene Dickinson raises is the role of US venture capital in the relocation decisions of Canadian companies. She argues that when companies seek funding from the US market, relocating their headquarters south of the border often becomes a condition embedded within the term sheets of investment deals.

“If you take the US money then relocating HQ south usually comes baked into the term sheet. It’s not simply a choice founders are making because the grass is greener (which can be well argued it isn’t).”

In Dickinson’s view, this contractual obligation supersedes the notion that founders are simply choosing a more appealing business environment. The decision, she implies, is often a business imperative dictated by funding terms rather than a reflection of dissatisfaction with Canada’s potential.

A Call for a “Will to Build”

Ultimately, Arlene Dickinson concludes her post with a call for a stronger commitment to building businesses within Canada. While acknowledging the practicalities of international investment, she stresses the importance of entrepreneurial spirit and the determination to foster growth domestically.

The insights shared by Arlene Dickinson offer a counter-perspective to the often-negative commentary surrounding Canada’s business landscape, emphasizing the strength of its talent and the complex financial dynamics that influence company location decisions.