Canadian Small Business by the Numbers

Innovation, Science and Economic Development Canada publishes key small business statistics annually. This information provides a useful insight into the Canadian economy for small business owners and entrepreneurs and those who provide services to them.

This article discusses some of the key findings which we consider will be of interest to readers. It should be noted that government's definition of small business (a business with 1 to 99 employees) may be significantly different to that of the average business owner.

At the end of 2015 there were 1.17 million businesses employing people in Canada of which 1.14 million were small businesses. That's a staggering 97.9% - without question small businesses are the backbone of the Canadian economy. In terms of employment, small businesses employ 8.2 million individuals which is 70.5% of the total private labour force. Of these businesses 78.5% were in the service-producing sector and 21.5% in the goods-producing sector.

Of course, to many of us a firm with even 50 employees is large, so what about micro-enterprises? Those who only employee one to four people? Impressively, these account for 54.1% of all private employers - the largest small to medium enterprise (SME) group.

Now, it gets really interesting. When we extend the range to include five to nineteen employees, we account for 86.2% of all employer businesses.

Geographically, more than half of all small employer businesses are in Ontario and Quebec (642,250). British Columbia leads Western Canada with 176,014 small businesses (December 2015) and Nova Scotia leads the Atlantic provinces with 29,298. However, relative to population (i.e. number of businesses per 1,000 of population) Alberta and PEI have the greatest number.

Every sector has high growth companies (definition: a firm with annualized growth rate of greater than 20 percent, over a three-year period, and with 10 or more employees at the beginning of the period). The heaviest concentrations were in construction, administrative and support services, transportation and warehousing.

How are these businesses financing themselves? Just over 50% of small to medium enterprises sought external financing.

Over 80% of start-ups (2-years or younger) used personal financing to get their business up and running. This was usually due to a lack of credit history or collateral. The bank of mom and dad still reigns supreme.

Provincially, small businesses are vital to the economy and contributed an average of 30% to the gross domestic product (2014 figures). British Columbia and Alberta businesses outperformed the rest of the country with figures of 33% and 32%.

In terms of demographics, the majority of companies are owned by men (64.7%). In 2014, women majority owned 15.7% of SME's, and equally owned with men 19.7%. Female entrepreneurs are most common in information, administration, healthcare, recreation and other service industries.

A little over 47% of small business owners were aged between 50-64 in 2014. Educationally, 38% of small business owners have a post-secondary degree; this rises to over 60% for medium-sized enterprises.

As a small business or micro-enterprise owner, make no mistake you play a vital part in the Canadian economy.

Read the full report here Read the full report in French

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