Key Small Business Statistics - July 2012

In 2011, there were 2.67 million self-employed workers, representing around 15.4 percent of all employed workers in the Canadian economy (Table 10). The number of self-employed reached 2.70 million in the third quarter of 2010, and decreased by the first quarter of 2012 to 2.62 million. Over the past decade, the number of self-employed workers increased by 17 percent, while the growth rate of the overall labour force was 15 percent. Slightly more than one third of self-employed workers were female—the share of female self-employment rose steadily from 1976 to 1998, from 26 percent to 36 percent, and has remained at around 35 percent since 1999.

Table 11 shows a breakdown of the self-employed in five categories from 2001 to 2011. On average in 2011, of 2.67 million self-employed workers, 68.0 percent had no paid help, 31.3 percent worked with paid help and 0.8 percent were unpaid family workers. Self-employed workers with and without paid help are further categorized according to whether their businesses^{Footnote 8} were incorporated or not. Of those who worked without paid help, 1.3 million or 73 percent were unincorporated in 2011; this category accounted for almost half the total number of self-employed in Canada. In the category with paid help, 73 percent were incorporated. Therefore, the preferred choice of those with paid help is to be incorporated, while those without paid help are mostly unincorporated.

The number of self-employed persons with incorporated businesses increased 2.9 percent annually, on average, over the past 10 years (not shown), compared with 1.5 percent for all self-employed. However, there was a great difference in the pattern of growth between incorporated businesses with paid help and those without. The number of incorporated businesses with paid help grew 2 percent annually, on average, between 2001 and 2011. In contrast, the number of incorporated self-employed persons without paid help increased rapidly between 2001 and 2011, at an average annual increase of 4.6 percent.

As shown in Table 11, the total number of self-employed workers in Canada increased at an annual rate of 2 percent between 1981 and 2011 but, as shown in Figure 10, the various categories of self-employed workers experienced slightly different growth rates over that period. For example, in the last two decades, there was negative growth in the category of unincorporated self-employed individuals with paid help. The annual average growth over the entire period was -0.4 percent. The highest growth for self-employed workers without paid help occurred over the 1991–2001 period (3.5 percent). For those with paid help, the highest growth occurred during the 1981–1991 period (3.2 percent).

Figure 10: Self-Employed Persons (Thousands) by Category, 1981-2011

[Description of Figure 10]
Source: Statistics Canada, Labour Force Survey, April 2012.

Self-employed workers owning incorporated businesses registered the highest growth rates between 1981 and 2011—6.8 percent for businesses without paid employees, followed by unincorporated businesses without paid employees at 2.3 percent and incorporated businesses with paid employees at 1.9 percent.

Three categories experienced growth rates below the 2-percent average, which means their relative importance in terms of self-employed workers diminished. These categories were self-employed workers owning incorporated businesses with paid employees (1.9 percent), unincorporated businesses with paid employees (-0.4 percent) and unpaid family workers (-5.5 percent).