8 Interesting Facts about Canadian Small Businesses

By Joe Issid
Monster contributing writer

Industry Canada publishes an annual study titled “Key Small Business Statistics” that provides baseline data on the small business sector within Canada. The most recent issue was published in August, 2013 and provides some engrossing – if not altogether surprising – numbers about the role that small enterprises play in the Canadian economy. Among the many questions the study addresses are those concerning how many small businesses exist, how many people work for such businesses, how many jobs are created and how innovative they are.

In order to qualify as a small business, a company needs to be incorporated, have filed a tax return with the Canadian Revenue Agency within the last three years and have 1-99 employees. In comparison, medium-sized businesses have 100-499 paid employees while a large business has 500 or more. Now on the numbers:

1. Small businesses comprise 98.2% of all Canadian companies
As of 2013, there 1,107,540 employer businesses in Canada of which 1,087,803 were small. 1.6% were medium businesses with large businesses comprising 0.1% of the total private employment sector. If you work in the private sector in Canada, chances are you work (or have worked) for a small business.
2. 69.7% of Canadians work for small businesses
In 2012, over 7.7 million Canadians in the private sector worked for small businesses. In comparison, 2.2 million (20.2%) employees worked for medium businesses. All told, 89.9% of all Canadians worked for a small or medium enterprise (SME).
3. 57% of all Canadian businesses are in Ontario and Quebec
The Atlantic Provinces account for only 7% of all Canadian enterprises, while the western provinces account for 36%. The Northwest Territories, Yukon and Nunavut represent only 0.3% of Canada’s employer businesses.
4. PEI has the highest SME employment rate in Canada
Prince Edward Island had the highest percentage of employees working for SMEs at 94.3%, followed by Nova Scotia (94.1%) and British Columbia (93.7%). Conversely, Quebec and Ontario had the lowest share of employees working for SMEs at 87.5% and 88.5%, respectively. According to the Industry Canada report: “Such variations are likely due to the structure of provincial economies: For example, Ontario’s economy has many large firms in the manufacturing sector, whereas Prince Edward Island’s economy is structured around small businesses.”
5. From 2002-2012, small businesses created 77.7% of all new jobs in Canada
As small businesses account for 98% of all private sector Canadian employment, it stands to reason that more than 3/4 of all new jobs come from within the sector. In total, small businesses created, on average, 100,000 new jobs per year from 2002-2012.
6. 86% of small businesses survive 2 years
However, this number is somewhat tempered when examining the number of micro-businesses (1-4 paid employees). From 2007 to 2009, only 68% of micro-enterprises survived 2 years (however, the general economic conditions at the time were certainly a major contributing factor).
7. Small businesses only account for 31% of R&D spending
Despite accounting for 98% of total employer business, small businesses investments in R&D are relatively paltry. Conversely, large businesses, who make up 0.2% of all employer business, account for more than 50% of all Canadian R&D expenditure.
8. 13.5% of small businesses are solely owned by women
Businesses with equal partnerships between male and female owners accounted for 18.2% of employer small businesses, while 53.8% were solely owned by males. When looking at medium-sized businesses, female ownership dropped to 4%.

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