Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses
Scott Douglas Jacobsen
In-Sight Publishing, Fort Langley, British Columbia, Canada
Correspondence: Scott Douglas Jacobsen (Email: scott.jacobsen2025@gmail.com)
Received: January 23, 2025
Accepted: N/A
Published: February 15, 2025
Abstract
Bradlee Whidden, a Senior Policy Analyst for Western Canada at the Canadian Federation of Independent Business (CFIB), discusses the concerning decline in capital investments among Canadian small businesses over the past decade. Highlighting a 16% drop in spending on machinery and equipment—amounting to $1,178 less per private sector worker—Whidden examines how policies such as provincial sales taxes in BC, Saskatchewan, and Manitoba, as well as federal measures affecting capital gains taxation, have contributed to Canada’s slide from being the second best to the second worst among G7 nations in productivity. He argues that addressing interprovincial trade barriers, streamlining permitting processes, reducing red tape, and maintaining key investment incentives are critical to reversing this trend and boosting overall productivity.
Keywords: Capital Investments, Corporate Income Tax, Declining Investment, G7 Countries, Investment Incentives, Machinery and Equipment, Productivity, Provincial Sales Tax, Small Businesses, Western Canada
Introduction
In this interview, Bradlee Whidden, a Senior Policy Analyst for Western Canada at the Canadian Federation of Independent Business (CFIB), provides an in-depth analysis of the declining capital investments in Canadian small businesses—a trend that has significant implications for the nation’s productivity. Based in Calgary, Whidden collaborates with government stakeholders to support small businesses and has observed a consistent decrease in investments in machinery and equipment since 2013, a trend that sharply intensified following the oil price crash in 2015.
Whidden explains that one of the major contributing factors to this decline is the imposition of provincial sales taxes on capital investments in provinces like British Columbia, Saskatchewan, and Manitoba, which artificially inflate costs for small business owners. Additionally, he points out that changes in federal policies—such as adjustments to capital gains taxation thresholds and the gradual phasing out of investment incentives like immediate expensing and the Accelerated Investment Incentive—further discourage much-needed investments. These policy challenges, coupled with economic uncertainties and regulatory red tape, have resulted in Canadian workers producing significantly less per hour compared to their G7 counterparts.
The discussion also emphasizes the broader economic impact of these trends, noting that the reduced investment in essential tools and equipment has far-reaching consequences for productivity and competitiveness. Whidden stresses the urgent need for coordinated policy reforms at both provincial and federal levels to create a more favorable investment climate, reduce operational costs, and ultimately spur economic growth in Western Canada and beyond.
Main Text (Interview)
Interviewer: Scott Douglas Jacobsen
Interviewee: Bradlee Whidden
Section 1: Introducing the Landscape
Scott Douglas Jacobsen: Today, we’re here with Bradlee Whidden. He is a Senior Policy Analyst for Western Canada at the Canadian Federation of Independent Business (CFIB). CFIB, headquartered in Toronto, has offices across all provinces. Bradlee is based in Calgary and works out of the Calgary office. He collaborates with various levels of government to support small businesses, focusing on areas such as investment, internal trade, regulation, and property taxes. He joined CFIB as an intern in 2023, authored property tax reports for Alberta and British Columbia, and holds a Bachelor of Arts in Economics and Political Science from the University of Calgary. A new report from CFIB examines the decline of capital investments among Canadian small businesses. The report shows that 32% of small businesses expect to reduce capital investments over the next two years. This stood out to me while looking for stories to explore further. What’s happening with this decline in small business capital investment in Canada projected over the next few years?
Section 2: Investment Trends Over the Decade
Bradlee Whidden: Over the last decade, investment in machinery and equipment per average private sector worker has declined. Specifically, it has decreased by about 16%, equivalent to $1,178. That’s $1,178 less spent on tools like power drills, tractors, conveyor belts, or other machinery workers rely on to make their jobs easier and more productive. Looking ahead, we expect this to worsen, as 32% of small businesses anticipate decreasing their capital investments over the next two years, a larger percentage than those expecting to increase investments.
Section 3: The Oil Price Crash Effect
Jacobsen: So, the declining machinery and equipment spending per worker isn’t new?
Whidden: That’s correct. We observed this trend since 2013 but it became significantly more pronounced in 2015 with the oil price crash. That said, the United States experienced this as well, but we didn’t see the same drop in investment there as we did here. This suggests that other factors beyond global economic conditions contributed to Canada’s decline.
Section 4: The Role of Provincial Sales Taxes
Jacobsen: If we focus on provinces like British Columbia, Saskatchewan, and Manitoba, why are high equipment costs, taxes, and cash flow issues significant factors?
Whidden: The government plays a role in shaping the policy environment. For instance, governments tax business investments in machinery and equipment in the three western provinces you mentioned—BC, Saskatchewan, and Manitoba. We’ve seen these same machinery and equipment purchases decline over the past decade.
BC, Saskatchewan, and Manitoba all impose provincial sales taxes that artificially raise the price of these investments. This is something we don’t see in any other province. It’s especially concerning given that this decline in capital investment is worse in Western Canada, and it’s exacerbated by policies where each province’s sales tax is applied to these purchases. In other provinces, businesses can get an input tax credit to write off or offset those costs.
Section 5: International Productivity Comparisons
Jacobsen: How does this machinery and equipment spending drop compare to other G7 nations?
Whidden: Well, I can’t speak to productivity directly or provide an exact comparison of machinery and equipment investment across the G7. However, Canada is now second last among all G7 countries. This is a far cry from the 1970s when we were second best.
So, we’ve dropped from second best to second worst. This decline can be attributed to decreased investment in machinery and equipment. Businesses want to be more productive, and they want their workers to produce more for less. Tools and equipment—like power drills, tractors, conveyor belts, computers, and AI—help workers be more productive and produce more per hour. Unfortunately, the average Canadian worker only produces $53 per hour. The G7 average is $61 per hour, and the United States is significantly higher than that.
Section 6: Impact of Federal Policy Changes
Jacobsen: Why is Canada overall less productive?
Whidden: It can’t simply be due to a lack of investment in machinery and equipment, though that is a major factor. Reversing this trend wouldn’t fix the problem overnight but would go a long way toward helping.
When we discuss the productivity problem, we also target other policies, particularly those from the federal government. For instance, the federal government’s decision to increase the capital gains taxation threshold dissuades investment. Business owners face a larger tax bill if those assets appreciate.
The federal government has previously recognized the importance of incentivizing investment. Programs like the immediate expensing and the Accelerated Investment Incentive were designed to help. Still, those are being phased out starting this year, sowe expect the problem to worsen.%
Jacobsen: Can you provide an example to illustrate this point?
Whidden: Of course. We did some calculations based on those three provinces—BC, Saskatchewan, and Manitoba. We found that exempting capital investments from their PSTs would boost investment by about 17%, or over $2 billion. That’s $2 billion in new investment in just those three provinces alone.
Section 7: Regulatory Challenges and Red Tape
Jacobsen: What about measures like faster permitting and processing of infrastructure projects? Could that boost productivity for Canadian workers?
Whidden: Absolutely. As we’ve pointed out, red tape is a major issue here. When business owners are stuck filling out forms or waiting for permits, they’re not using their time for more productive activities, such as investing in their businesses.
Section 8: Small Business Investment
Jacobsen: How can all levels of government prioritize policies to support small business investment and improve productivity?
Whidden: Governments at all levels must focus on creating a more investment-friendly environment. This includes removing disincentives like provincial sales taxes on capital investments, simplifying the permitting process, reducing red tape, and maintaining programs incentivizing investment. By doing so, they can help businesses make the kinds of investments that drive productivity and economic growth.
Whidden: Well, to be honest, this is nothing new, but we can’t forget about corporate income taxes. To be completely straightforward, it’s money that would otherwise go toward investing in the business but is instead being taxed by both provincial and federal governments. When we’ve polled our members—and if you’d like, I can provide detailed survey results about what business owners would do with savings from a tax cut—we’ve seen that they would hire more employees, train staff, and expand their businesses. We want to see these things in a healthy, growing economy.
Jacobsen: CFIB recommends making the Accelerated Investment Incentive and Immediate Expensing measures permanent to simplify them. What would those steps look like?
Whidden: Our recommendation is straightforward: don’t phase them out as planned. The fall economic statement did propose keeping some parts of these measures permanent, particularly for manufacturing, which is great to see. However, it’s not legislated yet, so as it stands, these measures are still set to be phased out. We’d like to see what the fall economic statement proposed. Simplifying these measures and making them more accessible for business owners would also be highly beneficial.
Section 9: Potential Policy Reforms
Jacobsen: How can governments address cash flow constraints faced by small businesses to encourage more capital investment?
Whidden: That’s tough because much of it is tied to the global economic environment. Don’t get me wrong, policy plays a significant role, too, but economic uncertainty has dominated the last few years. Ultimately, it comes back to lowering living costs through tax cuts for individuals and small businesses. On the small business side, corporate income tax is undoubtedly significant.
The survey results show that many small business owners would use savings from a tax cut to lower prices. However, on the consumer side, lowering costs through personal income tax reductions is just as important.
Jacobsen: That is equivalent to $1,178 per private sector worker, and that’s only within a decade?
Whidden: That’s right.
Jacobsen: So, that number, given the stop point of 2023, would likely be higher if this carried-forward trend extends into 2025. Is that correct?
Whidden: Well, we can’t say for certain because we based our study on the most recent data available, and the 2023 data was released just a few months ago. So we had good timing with that release. We expect, however, that if you extend this trend to 2024 and 2025, the problem will not have improved. It has likely worsened, given that 32% of small businesses expect their investment in machinery and equipment to decrease. In comparison, only 18% expect it to increase.
Jacobsen: That’s concerning.
Whidden: Yes, and the other issue is that we’re not seeing investment stagnate but actively decline. If Canada wants to keep up with countries like the United States and other G7 nations, we need to see those investment numbers increase.
Section 10: Concluding Insights and the Road Ahead
Jacobsen: If we take that trend line, along with business expectations and sentiment from the survey, what would be a reasonable timeline to reverse this long-term trend? Are we looking at another decade to return to baseline productivity levels, assuming the factors that reduced productivity from 2013 to 2023 were no longer in play?
Whidden: It’s hard to say because there are so many unknowns. For example, if tariffs are levelled against the Canadian economy this year, it will be significantly harder to recover. Even without that scenario, Canadian governments need to step in to reduce taxes and address interprovincial trade barriers, which cost the Canadian economy billions of dollars annually.
Jacobsen: That’s a good point. Are there any areas we haven’t addressed that should be highlighted?
Whidden: One key point I’d like to clarify is the concept of productivity. Many people mistakenly think productivity means working harder or longer hours, but that’s untrue. Productivity is about how much is produced for a given level of input. It’s not about working harder but working smarter and more efficiently. We use tools and technologies that help us produce more with the same or less effort.
Jacobsen: What are some of the findings from the recent study in 2024 or even more recently?
Whidden: We do have a blog post that has relevant numbers. You can see relevant survey results in the very first chart. See here:
Jacobsen: Thank you, Bradlee, for your opportunity and time today.
Discussion
This interview with Bradlee Whidden sheds light on the multifaceted challenges Canadian small businesses face amid a persistent decline in capital investments. The conversation highlights how a 16% drop in spending on machinery and equipment—equivalent to $1,178 less per private sector worker—has profound implications for productivity and competitiveness. Factors such as the pronounced effects of the 2015 oil price crash and the burden of provincial sales taxes in BC, Saskatchewan, and Manitoba are identified as key contributors to this trend, emphasizing that the issue extends beyond mere global economic conditions.
Whidden’s insights underscore the critical role that policy environments play in shaping business investment decisions. Federal measures, including adjustments to capital gains taxation and the phasing out of incentives like immediate expensing and the Accelerated Investment Incentive, have compounded the problem, while cumbersome regulatory processes further drain resources and stifle productivity gains. The interview also contrasts Canada’s current standing—now second worst among G7 nations—with its historical position as a leading economy, illustrating the stark impact of sustained underinvestment on overall economic performance.
Looking ahead, the discussion points to a pressing need for comprehensive policy reforms to create a more investment-friendly climate. By eliminating disincentives such as provincial sales taxes on capital investments and streamlining regulatory processes, the government could stimulate significant capital infusion, as demonstrated by projections of a potential 17% boost in investments in key provinces. Such coordinated actions are essential for reversing current trends, enhancing worker productivity, and restoring Canada’s competitive edge on the global stage.
Methods
The interview was scheduled and recorded—with explicit consent—for transcription, review, and curation. This process complied with applicable data protection laws, including the California Consumer Privacy Act (CCPA), Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), and Europe’s General Data Protection Regulation (GDPR), i.e., recordings were stored securely, retained only as needed, and deleted upon request, as well in accordance with Federal Trade Commission (FTC) and Advertising Standards Canada guidelines.
Data Availability
No datasets were generated or analyzed during the current article. All interview content remains the intellectual property of the interviewer and interviewee.
References
(No external academic sources were cited for this interview.)
Journal & Article Details
- Publisher: In-Sight Publishing
- Publisher Founding: March 1, 2014
- Web Domain: http://www.in-sightpublishing.com
- Location: Fort Langley, Township of Langley, British Columbia, Canada
- Journal: In-Sight: Interviews
- Journal Founding: August 2, 2012
- Frequency: Four Times Per Year
- Review Status: Non-Peer-Reviewed
- Access: Electronic/Digital & Open Access
- Fees: None (Free)
- Volume Numbering: 13
- Issue Numbering: 2
- Section: A
- Theme Type: Idea
- Theme Premise: “Outliers and Outsiders”
- Theme Part: 33
- Formal Sub-Theme: None
- Individual Publication Date: February 15, 2025
- Issue Publication Date: April 1, 2025
- Author(s): Scott Douglas Jacobsen
- Word Count: 1,706
- Image Credits: Photo by Patrick Tomasso on Unsplash
- ISSN (International Standard Serial Number): 2369-6885
Acknowledgements
The author extends sincere gratitude to Bradlee Whidden for his time and invaluable insights, which have significantly enriched the content of this interview.
Author Contributions
S.D.J. conceived the subject matter, conducted the interview, transcribed and edited the conversation, and prepared the manuscript.
Competing Interests
The author declares no competing interests.
License & Copyright
In-Sight Publishing by Scott Douglas Jacobsen is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
© Scott Douglas Jacobsen and In-Sight Publishing 2012–Present.
Unauthorized use or duplication of material without express permission from Scott Douglas Jacobsen is strictly prohibited. Excerpts and links must use full credit to Scott Douglas Jacobsen and In-Sight Publishing with direction to the original content.
Supplementary Information
Below are various citation formats for Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses.
- American Medical Association (AMA 11th Edition)
Jacobsen S. Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses. February 2025;13(2). http://www.in-sightpublishing.com/whidden-investments - American Psychological Association (APA 7th Edition)
Jacobsen, S. (2025, February 15). Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses. In-Sight Publishing. 13(2). - Brazilian National Standards (ABNT)
JACOBSEN, S. Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses. In-Sight: Interviews, Fort Langley, v. 13, n. 2, 2025. - Chicago/Turabian, Author-Date (17th Edition)
Jacobsen, Scott. 2025. “Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses.” In-Sight: Interviews 13 (2). http://www.in-sightpublishing.com/whidden-investments. - Chicago/Turabian, Notes & Bibliography (17th Edition)
Jacobsen, S. “Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses.” In-Sight: Interviews 13, no. 2 (February 2025). http://www.in-sightpublishing.com/whidden-investments. - Harvard
Jacobsen, S. (2025) ‘Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses’, In-Sight: Interviews, 13(2). http://www.in-sightpublishing.com/whidden-investments. - Harvard (Australian)
Jacobsen, S 2025, ‘Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses’, In-Sight: Interviews, vol. 13, no. 2, http://www.in-sightpublishing.com/whidden-investments. - Modern Language Association (MLA, 9th Edition)
Jacobsen, Scott. “Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses.” In-Sight: Interviews, vol. 13, no. 2, 2025, http://www.in-sightpublishing.com/whidden-investments. - Vancouver/ICMJE
Jacobsen S. Conversation with Bradlee Whidden on Declining Investments Facing Canadian Small Businesses [Internet]. 2025 Feb;13(2). Available from: http://www.in-sightpublishing.com/whidden-investments
Note on Formatting
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