Archived—Key Small Business Statistics - July 2012

What is the contribution of small businesses to Canada's gross domestic product?

warning View the most recent version. The following document is out of date.

Archived Information

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Gross domestic product (GDP) is a key measure of economic production that can be used to compare any two industries' value added, i.e., the value that an industry, through its activities, adds to its inputs. The main advantage of the GDP concept is that it avoids double counting; hence, it is considered superior in gauging economic performance over, for example, revenue, business counts or even employment.

The Government of British Columbia's Statistical Service (BC Stats) has developed a method to determine the small business contribution to GDP by province using the income-based approach of the System of National Accounts.Footnote 7 Table 9 shows the percentage of small businesses' contribution to GDP (including public and private sectors) for Canada and each province from 2001 to 2010.

Table 9: Small Business' Contribution to GDP by Province, 2001 to 20101, 2
Province Contribution to GDP (Percent)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: British Columbia's Statistical Service, Small Business Profile 2011: British Columbia.

Note 1: In these data, small businesses comprise businesses with fewer than 50 employees, plus those operated by the self-employed with no paid employees.

Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics reflect changes to the underlying data on which the numbers are based, as well as a refinement of the methodology used to generate the estimates.

Newfoundland and Labrador 20 19 18 21 19 19 18 18 20 19
Prince Edward Island 33 32 29 31 30 30 29 29 29 26
Nova Scotia 26 26 25 26 25 25 26 25 25 24
New Brunswick 24 25 23 25 25 24 25 25 24 23
Quebec 27 27 27 29 30 30 30 31 30 28
Ontario 25 24 23 24 25 26 26 27 26 25
Manitoba 24 23 24 25 25 26 26 26 26 24
Saskatchewan 26 26 24 29 29 30 32 33 35 30
Alberta 26 28 26 26 27 29 31 31 29 27
British Columbia 29 28 29 33 33 33 34 34 32 30
Canada 26 26 25 27 28 28 29 29 28 27

BC Stats' definition of small business is restricted to businesses with fewer than 50 employees, plus those operated by the self-employed with no paid employees. By this definition, it is estimated that, in 2010, small businesses accounted for approximately 27 percent of Canada's GDP. The percentage varies from a low of 19 percent in Newfoundland and Labrador to a high of 30 percent in Saskatchewan and British Columbia. Over the 2001 to 2010 period, the contribution of small businesses to GDP increased slightly at the national level from 26 percent in 2001 to 29 percent in 2007 and 2008 and to 28 percent in 2009 and 27 percent in 2010. The largest increase occurred in Saskatchewan, where the GDP contribution was 26 percent in 2001 and 35 percent in 2009. The GDP contribution decreased most in Prince Edward Island, where it fell from 33 percent in 2001 to 26 percent in 2010.

Figure 9 shows the contribution to GDP by firm size for only one year, 2005, using a different methodology. In a recent study, Statistics Canada found that small businesses (here defined as those with 1 to 100 employees) accounted for about 42 percent of private sector GDP and SMEs (those with 1 to 499 employees) accounted for about 54 percent (Figure 9.1). Industry Canada's estimates indicate that, when taking into account both the public and the private sectors, small businesses in the private sector account for about 31 percent of GDP, while medium-sized businesses account for 9 percent (Figure 9.2).

Figure 9: Contribution to GDP by Firm Size, Public and Private Sectors, 2005
Figure 9.1: Private Sector Figure 9.2: Public and Private Sectors [Description of Figure 9]
Source: Statistics Canada, Small, Medium-Sized and Large Businesses in the Canadian Economy: Measuring Their Contribution to Gross Domestic Product in 2005, June 2011; Industry Canada calculations.

Footnotes

Footnote 7

A background note describing the method in somewhat greater detail is available upon request by contacting the Small Business Branch of Industry Canada at SBB-DGPE.

Return to footnote 7 referrer