Key Small Business Statistics - July 2012

Highlights

Industry Canada's definition of "small business" is firms that have fewer than 100 employees.

Number of Businesses

• There are just over one million small businesses in Canada that have employees (excludes self-employed entrepreneurs). Ninety-eight percent of businesses in Canada have fewer than 100 employees.
• Between 2002 and 2008, about 100,000 new small businesses, on average, were created in Canada each year.
• Taking into account firms that exit the marketplace, the number of firms increased by about 9,000 per year, on average, over the 2002–2008 period.

Contribution to Gross Domestic Product (GDP)

• Small businesses contribute slightly more than 30 percent to Canada's GDP.

Employment

• As of 2011, small businesses employed approximately five million individuals in Canada, or 48 percent of the total labour force in the private sector.
• Small businesses created about 21,000 jobs in 2011. Over the 2001 to 2011 period, small firms accounted for 43 percent of all jobs created, on average, in the private sector.
• Approximately 15 percent of all employed workers in the Canadian economy in 2011 were self-employed.

Earnings

• On average, small business employees in Canada earned around $763 per week in 2011, less than the overall average of $852.

Sectoral Breakdowns

• Small businesses account for over two thirds of employment in five Canadian industry categories: non-institutional health care, forestry, other services, construction, and accommodation and food.
• Roughly 21 percent of small businesses operate in Canadian goods-producing industries; the remaining 79 percent operate in service industries.

Survival

• Survival rates for small and medium-sized businesses (with less than 250 employees) in Canada decline over time. About 85 percent of businesses that enter the marketplace survive for one full year, 70 percent survive for two years and 51 percent survive for five years.
• The number of business bankruptcies in Canada fell by 56 percent between 2000 and 2010 to about 3,600 in 2011.

Growth

• The Organisation for Economic Cooperation and Development (OECD) defines high-growth firms as those with average annualized growth rates greater than 20 percent per year, over a three-year period, and with 10 or more employees at the beginning of the period.
• While a relatively small number of firms (about 13,000) achieved high growth in terms of employment, they created approximately 45 percent of net new jobs over the 2003–2006 period.
• High-growth firms are present in every economic sector and are not just concentrated in knowledge-based industries. The highest concentration of high-growth firms was in professional, scientific and technical services; construction; and administrative and support, waste management and remediation services.

Women in Business

• In 2010, it was estimated that 17 percent of small businesses were majority-owned by women, while 9 percent were owned in equal partnerships between male and female owners.

Exports

• About 86 percent of Canadian exporters were small businesses. In 2010, small businesses were responsible for $77 billion, or about 25 percent of Canada's total value, of exports.
• The largest contributions to exports were in construction (84.3 percent), transportation and warehousing (80.3 percent) and retail trade (80.5 percent).