Archived—Key Small Business Statistics - July 2012

How many jobs do small businesses create?

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The data that make it possible to answer this question are derived from Statistics Canada's Survey of Employment, Payrolls and Hours (SEPH). SEPH data exclude self-employed workers who are not on a payroll. Other limitations also apply (see How many people work for small businesses?).

Table 6 displays relative contributions to the net change in private sector paid employment by small, medium-sized and large businesses from 2001 to 2011. Over the years, the relative contribution in terms of size varied greatly. During the period under review, each of the business-size categories played the leading role at different times in net job creation in Canada. For three years, from 2001 to 2002 and in 2010, small businesses made the greatest contribution to net job creation. On the other hand, large businesses played the leading job-creation role from 2003 to 2008. Over the 2001 to 2011 period, small firms accounted for 43 percent of all jobs created, on average, in the private sector.

Table 6: Net Change in Private Sector Paid Employment by Size of Business Enterprise (Annual Averages), 2001–20111, 2
Year Size of Business — Number of Employees
0–4 5–19 20–49 50–99 Small
(<100)
Medium
(100–499)
SMEs
(<500)
Large
(500+)

Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), April 2012, and calculations by Industry Canada. Historical data are frequently revised and, as of 2000, are available on a North American Industry Classification System (NAICS) basis.

Note 1: SEPH data exclude self-employed workers who are not on a payroll, and employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. Data in this table also exclude employment in public administration, public utilities (water, sewage and other systems), postal services, public transit, educational services, and institutional and other government-funded health care services, but include employment in the CBC, private practices (physicians, dentists and other health practitioners), and beer and liquor stores.

Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics are largely due to revisions to the historical SEPH data. A small proportion of the differences is the result of refinements in the methodology used to separate the private and public sectors. A technical note on the separation of public and private sector employment is available upon request by contacting the Small Business Branch of Industry Canada at SBB-DGPE.

2001 43,434 30,579 26,994 32,449 133,457 −7,979 125,478 62,808
2002 −7,274 30,622 46,924 64,780 135,052 3,181 138,233 52,214
2003 12,814 259 24,905 23,976 61,953 28,725 90,678 125,383
2004 −12,430 27,944 4,093 7,159 26,766 11,118 37,884 66,989
2005 18,270 −6,774 10,330 17,541 39,367 36,068 75,435 81,977
2006 21,159 22,386 36,523 28,838 108,907 59,425 168,331 121,571
2007 −1,698 38,747 35,846 22,780 95,675 46,801 142,476 106,866
2008 10,080 21,375 21,852 20,849 74,156 13,952 88,107 76,139
2009 −15,970 −43,447 −38,631 −53,654 −151,703 −105,045 −256,748 −151,963
2010 −1,978 6,599 3,115 6,980 14,715 619 15,334 −14,197
2011 −14,728 −8,342 24,685 19,525 21,140 58,489 79,628 76,245
Total Job Creation
(2001–2011)
51,679 119,948 196,636 191,222 559,484 145,353 704,837 604,032
Percentage of Job Creation 4.0 9.2 15.0 14.6 42.8 11.1 53.9 46.2

Table 7 shows year-over-year quarterly changes in paid employment from the third quarter of 2008 to the fourth quarter of 2011 by business size. Jobs were created in the third and fourth quarter of 2008 and were lost in every quarter of 2009 and in the first two quarters of 2010. In the second half of 2008, the rate of job creation averaged about 105,000 jobs per quarter. The number of jobs created started declining significantly in 2008 and became negative in 2009. In 2009, the number of jobs lost increased rapidly from 235,000 jobs lost in the first quarter to 527,000 jobs lost in the third quarter. The decrease in GDP growth was a factor in causing job losses throughout 2009 among businesses of all sizes. The rate of job creation started to recover in the fourth quarter of 2009 and reached positive levels in the third quarter of 2010.

Table 7: Year-Over-Year Net Private Sector Paid Employment Change and Percent Contribution by Size of Business Enterprise, Quarterly, 2008 Q3 to 2011 Q41, 2, 3
Year and Quarter Total
Net
Change
Net Private Sector Paid Employment Change by Size of Business
0–4 5–19 20–49 50–99 Small
(<100)
100–299 300–499 Medium
(100–499)
Large
(500+)

Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), April 2012, and calculations by Industry Canada.

Note 1: SEPH data exclude self-employed workers who are not on a payroll, and employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. Data in this table also exclude employment in public administration, public utilities (water, sewage and other systems), postal services, public transit, educational services, and institutional and other government-funded health care services, but include employment in the CBC, private practices (physicians, dentists and other health practitioners), and beer and liquor stores.

Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics are largely due to revisions to the historical SEPH data. A small proportion of the differences is the result of refinements in the methodology used to separate the private and public sectors. A technical note on the separation of public and private sector employment is available upon request by contacting the Small Business Branch of Industry Canada at SBB-DGPE.

Note 3: Minor discrepancies between total net employment change and the sum of changes by size are largely due to small differences between aggregate and the sum of disaggregated source data.

2008   Q3 162,193 5,753 4,772 22,482 26,326 59,332 −3,212 20,993 17,781 85,072
Q4 48,755 −1,890 11,202 4,734 2,855 16,900 −11,883 8,326 −3,557 35,409
2009   Q1 −235,076 −17,752 −32,123 −17,016 −33,154 −100,045 −56,857 −4,516 −61,373 −73,654
Q2 −446,421 −49,058 −34,698 −46,780 −60,785 −191,322 −66,064 −43,817 −109,881 −145,221
Q3 −527,341 15,659 −74,641 −59,341 −71,973 −190,296 −75,541 −55,131 −130,672 −206,366
Q4 −426,015 −12,751 −32,324 −31,404 −48,703 −125,182 −72,042 −46,215 −118,257 −182,578
2010   Q1 −194,338 3,623 −3,441 −16,064 −17,697 −33,579 −25,677 −32,730 −58,407 −102,359
Q2 −15,397 15,161 4,206 6,736 2,644 28,746 −957 −8,412 −9,369 −34,774
Q3 90,275 −33,515 33,053 18,067 25,595 43,200 19,597 7,634 27,231 19,847
Q4 124,008 6,854 −7,447 3,720 17,368 20,495 34,701 8,306 43,006 60,509
2011   Q1 145,447 −14,398 −5,221 20,766 15,747 16,894 34,353 10,196 44,549 84,004
Q2 140,644 −15,749 −24,735 15,158 21,104 −4,222 48,151 11,186 59,337 85,521
Q3 162,177 −16,502 −5,582 27,720 15,966 21,602 47,206 20,072 67,278 73,296
Q4 167,041 −8,502 −89 31,402 23,107 45,918 46,583 12,594 59,176 61,945
% Contribution to Private Sector Employment Change by Size of Business
2008   Q3 100 3.5 2.9 13.9 16.2 36.6 −2.0 12.9 11.0 52.5
Q4 100 −3.9 23.0 9.7 5.9 34.7 −24.4 17.1 −7.3 72.6
2009   Q1 100 7.6 13.7 7.2 14.1 42.6 24.2 1.9 26.1 31.3
Q2 100 11.0 7.8 10.5 13.6 42.9 14.8 9.8 24.6 32.5
Q3 100 −3.0 14.2 11.3 13.6 36.1 14.3 10.5 24.8 39.1
Q4 100 3.0 7.6 7.4 11.4 29.4 16.9 10.8 27.8 42.9
2010   Q1 100 −1.9 1.8 8.3 9.1 17.3 13.2 16.8 30.1 52.7
Q2 100 −98.5 −27.3 −43.7 −17.2 −186.7 6.2 54.6 60.9 225.8
Q3 100 −37.1 36.6 20.0 28.4 47.9 21.7 8.5 30.2 22.0
Q4 100 5.5 −6.0 3.0 14.0 16.5 28.0 6.7 34.7 48.8
2011   Q1 100 −9.9 −3.6 14.3 10.8 11.6 23.6 7.0 30.6 57.8
Q2 100 −11.2 −17.6 10.8 15.0 −3.0 34.2 8.0 42.2 60.8
Q3 100 −10.2 −3.4 17.1 9.8 13.3 29.1 12.4 41.5 45.2
Q4 100 −5.1 −0.1 18.8 13.8 27.5 27.9 7.5 35.4 37.1

Small businesses lost jobs in each year-over-year period between the first quarter of 2009 and the first quarter of 2010. Small businesses regained jobs in the second quarter of 2010, while medium-sized and large businesses regained jobs in the third quarter of 2010. In 2011, small businesses lost jobs in the second quarter. This occurred mainly in firms with fewer than 20 employees.

Job creation among micro-businesses was the most volatile of the seven firm-size categories. This is the only firm-size category in 2009 that was a source of job creation, when micro-businesses created about 16,000 jobs in the third quarter of 2009. However, micro-businesses shed jobs from the fourth quarter of 2008 to the second quarter of 2009, in the fourth quarter of 2009, in the third quarter of 2010 and in every quarter of 2011.