Earlier in October, I attended Canada’s Competition Summit held in Ottawa, which brought together policymakers, economists, and business leaders to talk about how Canada can address issues such as productivity and innovation.

This year’s summit made clear that Canada’s growth depends on new entrants willing to challenge the status quo. That means founders, such as those in Ottawa’s growing startup scene, have a bigger role to play than ever.

Competition now favours the challenger

Industry Minister Mélanie Joly opened the summit by stressing that the federal government intends to take a tougher and more proactive stance on promoting competition across sectors. Competition Bureau Commissioner Matthew Boswell reinforced the point by emphasizing that protecting dominant firms from rivals weakens them over time. Specifically, he noted that Canada’s companies can only succeed internationally if they face meaningful competition within the domestic market.

For founders, this shift matters because it means policymakers now see startups as engines of productivity; when new companies push incumbents to innovate, prices fall, service improves, and customers win.

Red tape still blocks progress

Regulators at the summit identified Canada’s sluggish rate of new business creation as a key concern, with the main challenges including high licensing costs, ownership restrictions, and lengthy approval processes that continue to make it difficult for new ventures to enter the market. In response, the federal government has launched a red-tape review aimed at understanding where regulatory burdens most affect small and medium-sized enterprises (SMEs).

Early steps have focused on gathering data within government to understand where existing rules are outdated, duplicative, or unnecessarily complex. The next phase will involve direct engagement with SMEs and industry stakeholders across sectors to collect specific examples of how regulation slows growth and innovation. The goal is to translate these findings into targeted reforms that simplify compliance and make it easier for small businesses to operate and expand.

For startups, this review signals that the federal government is beginning to recognize that heavy regulatory costs fall hardest on early-stage companies that lack the legal and administrative capacity of larger firms. If the engagement process leads to concrete action, founders can expect gradual improvements in licensing timelines, lower compliance costs, and fewer overlapping requirements between various regulators. While changes will take time, the review suggests a growing policy focus on enabling entrepreneurship that founders can expect to benefit from.

Capital and scale still define success

Alongside its broader competition agenda, the federal government has also directed the Competition Bureau to examine how limited competition in Canada’s lending market affects SMEs. This is in part because the market is dominated by a handful of major banks, while smaller or newer lenders face significant barriers to entry. For founders, this means that loan options are difficult to compare, switching between lenders is cumbersome, and borrowing costs are often higher than what larger firms pay. Notably, this financing gap is wider in Canada than in many other OECD economies.

Taken together with the red-tape review, this demonstrates a shift in policy focus toward strengthening the underlying conditions that enable small businesses to operate and grow, and complementing existing innovation programs such as the Business Development Bank of Canada’s loan accelerator initiative. If the Bureau’s recommendations lead to meaningful reforms, founders could eventually see more diverse lending options, simpler credit processes, and better access to working capital.

Beyond Ottawa and Ontario

The summit also focused on Canada’s interprovincial trade barriers, which include rules that differ across provinces that make it harder for startups to scale nationally. Recent steps show that momentum for reform is building, with the federal government removing all remaining federal exceptions under the Canadian Free Trade Agreement and passing the One Canadian Economy Act to promote the mutual recognition of comparable provincial regulations. 

Harmonized interprovincial rules would make it easier to sell products or services nationwide without tailoring compliance frameworks for each province. Moreover, startups in fintech, clean-tech, and health-tech stand to benefit the most as they operate in highly regulated sectors, often with overlapping provincial licensing or data-handling requirements that slow expansion. Improved labour mobility standards could also make hiring across provinces faster and cheaper for early-stage companies competing for specialized talent.

Access the information you need to plan ahead

As policymakers work to open markets and reduce barriers for new entrants, founders still need to be prepared to navigate the complex legal landscape that comes with building and scaling a business in Canada. Legal clinics like the uOttawa Startup Law Clinic play an important role in helping early-stage entrepreneurs access legal information within this evolving framework, from incorporating and raising capital to drafting employment agreements and protecting intellectual property. Our upcoming town halls will be useful primers on such legal information.