Key Small Business Statistics - July 2012

Statistics Canada's Business Register maintains a count of business locations^{Footnote 1} and publishes results twice a year. Business locations can belong to the same company; each company owns at least one business location. For an individual business location to be included in the Business Register, the company to which it belongs must meet at least one of the following minimum criteria: it must have at least one paid employee (with payroll deductions remitted to the Canada Revenue Agency (CRA)), it must have annual sales revenues of $30,000, or it must be incorporated and have filed a federal corporate income tax return at least once in the previous three years.

As of December 2011, there were about 2.4 million business locations^{Footnote 2} in Canada, as shown in Table 1. About half of all business locations are called "employer businesses" because they maintain a payroll of at least one person (possibly the owner). The other half are classified as "indeterminate" because they do not have any employees registered with the CRA. Such businesses may indeed have no workforce (they may simply be paper entities that nonetheless meet one of the criteria for recognition as a business location) or they may have contract workers, family members and/or only the owners working for them. The "indeterminate" category was created because information about their workforce is not available.

Approximately 58 percent of all business locations in Canada are located in Ontario and Quebec. Virtually all the rest are divided between the western provinces (37 percent) and the Atlantic provinces (5 percent). The Northwest Territories, Yukon and Nunavut represent only 0.3 percent of Canada's businesses.

Relative to population, the western provinces, Yukon and Prince Edward Island have more business locations than elsewhere, with the highest ratios in Saskatchewan and Alberta at 90.3 and 89.1 per 1,000 population respectively. Nunavut, Newfoundland and Labrador, New Brunswick and Nova Scotia have the lowest ratios of business locations per 1,000 population. Ontario and Quebec are below the national average of 69.4, with 66.2 and 61.7 business locations per 1,000 population respectively.

In terms of gross domestic product (GDP) per business location by province, Nunavut shows the highest ratio at $2,151,000 per location. (This is likely due, in part, to the low number of business locations per 1,000 residents; therefore, its GDP is spread over fewer business locations).

More broadly, there is a noticeable negative relationship between the number of business locations per 1,000 inhabitants and contribution to GDP per business location in that a higher number of business locations per 1,000 population corresponds to a lower GDP per business location. Alberta is an exception to this rule, with a relatively high GDP per business location as well as a high number of business locations per 1,000 residents.

Of the 1,122,306 employer businesses, 2,528 (about 0.2 percent) have 500 employees or more, 1,100,779 employer businesses (98 percent) have fewer than 100 employees, 75 percent have fewer than 10 employees and 55 percent have only 1 to 4 employees (see Table 2).

About one quarter of all business locations (indeterminate and employer businesses alike) produce goods, whereas the remainder provide services. Small firms (those with fewer than 100 employees) make up 98 percent of goods-producing employer businesses and 98 percent of all service-producing employer businesses (Table 2 and Figure 1). Using an alternative definition of small businesses in the service-producing sector that defines small businesses as those with fewer than 50 employees, small firms account for 96 percent of all service-producing employer firms.

Figure 1: Distribution of Business Locations in the Goods-Producing and Service-Producing Sectors by Firm Size (Number of Employees), December 2011

[Description of Figure 1]
Source: Statistics Canada, Business Register, December 2011.

Note 1: By conventional Statistics Canada definition, the goods-producing sector consists of North American Industry Classification System (NAICS) codes 11 to 31–33, while NAICS codes 41 to 91 define the service-producing sector.

Note 2: The "indeterminate" category consists of incorporated or unincorporated businesses that do not have a Canada Revenue Agency payroll deductions account. The workforce of such businesses may consist of contract workers, family members and/or owners.

Table 3 shows the distribution of employer businesses by size of business location in each province and territory. Generally speaking, the distribution by size in the provinces is similar to the national average distribution by size. However, there is some variation among the provinces and territories; for example, there is a higher percentage of micro-enterprises (1 to 4 employees) in Alberta (59 percent) and British Columbia (57 percent) than in Ontario (56 percent), Quebec (51 percent) or the territories (from 23 percent to 50 percent).

Table 4 presents the distribution of employer businesses by size of business location in each industry. The greatest variation across industries is found among micro-enterprises. The highest percentage of micro-industries is in professional, scientific and technical services (75.6 percent) and in agriculture, forestry, fishing and hunting (71.9 percent). The lowest percentages of micro-enterprises are found in public administration (22.5 percent), accommodation and food services (27.7 percent) and utilities (33.0 percent).