Key Small Business Statistics - August 2013

How many jobs do small businesses create?

How many jobs do small businesses create?

Small businesses account for more than 98 percent of all firms in Canada and proportionally play a large role in net job creation, creating 77.7 percent of all private jobs from 2002 to 2012 (Figure 2). In total, small businesses created a little over 100,000 jobs each year on average. Medium-sized and large businesses, which account for 1.6 percent and 0.1 percent of all firms, respectively, created 12.5 percent and 9.8 percent of net new jobs over the same period, representing about 17,000 and 11,800 jobs each year on average.

Figure 2: Percentage of Private Job Creation by Size of Business Establishment, 2002–2012
Figure 2: Percentage of Private Job Creation by Size of Business Establishment, 2002-2012
Source: Statistics Canada, Labour Force Survey (LFS), 2012, and calculations by Industry Canada.
Figure 2: Percentage of Private Job Creation by Size of Business Establishment, 2002–2012
Small (1–99) 77.7%
Medium (100–499) 12.5%
Large (500+) 9.8%

Figure 3 displays relative contributions to the net change in paid employment by small, medium-sized and large businesses from 2002 to 2012. The relative contribution varied by year, but small businesses consistently outperformed medium-sized and large businesses in terms of employment growth. Small business job creation ranged from over 192,000 in 2002, to under 15,000 jobs in 2005, to a loss of over 93,000 jobs in 2009. The 2008–2009 recession affected businesses of all sizes, resulting in more job losses in one year than in any other year during the 2002 to 2012 period. More than 336,000 jobs were lost in 2009, with medium-sized firms losing the most jobs at almost 147,000. Since 2010, over 530,000 jobs have been created by businesses of all sizes.

Figure 3: Contribution to Net Change in Private Employment by Size of Business Establishment, 2002–2012
Figure 3: Contribution to Net Change in Private Employment by Size of Business Establishment, 2002-2012
Source: Statistics Canada, Labour Force Survey (LFS), 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.
Figure 3: Contribution to Net Change in Private Employment by Size of Business Establishment, 2002–2012
Year Jobs Created
Small (1–99) Medium (100–499) Large (500+)
2002 192,442.8 43,229.1 15,553.1
2003 133,772.4 55,619.6 38,057.9
2004 101,711.5 18,672.0 5,091.5
2005 14,469.7 19,138.2 44,092.1
2006 185,361.4 727.8 43,269.1
2007 157,770.2 30,250.8 6,445.7
2008 109,993.2 22,224.4 −7,317.7
2009 −93,411.1 −146,745.0 −96,469.0
2010 117,932.3 31,440.6 4,460.5
2011 118,887.0 73,220.8 18,450.5
2012 65,304.5 41,935.6 58,593.2

Figure 4 shows the change in employment by business size over time compared with levels in the first quarter of 2008. During the recession (Q4 2008 to Q2 2009) jobs were lost in firms of all sizes, but each firm size has recovered differently. SMEs began to hire again in the third quarter of 2009.

Figure 4: Private Employment by Size of Business, Q1 2008 to Q4 2012
Figure 4: Private Employment by Size of Business, Q1 2008 to Q4 2012
Source: Statistics Canada, Labour Force Survey (LFS), 2012, and calculations by Industry Canada.
Figure 4: Private Employment by Size of Business, Q1 2008 to Q4 2012
Quarter Small (1–99) Medium (100–499) Large (500+)
Index: Q1 2008 = 100
Q1 2008 100.0 100.0 100.0
Q2 2008 100.0 100.1 102.9
Q3 2008 100.5 96.9 104.4
Q4 2008 100.9 94.8 103.4
Q1 2009 100.2 91.9 96.5
Q2 2009 99.3 91.2 92.6
Q3 2009 98.1 91.8 93.9
Q4 2009 98.8 91.3 93.5
Q1 2010 99.6 92.0 92.9
Q2 2010 100.7 93.1 94.4
Q3 2010 100.8 93.3 95.7
Q4 2010 101.6 93.6 95.6
Q1 2011 101.0 95.7 97.7
Q2 2011 101.7 95.6 97.2
Q3 2011 103.2 97.2 93.5
Q4 2011 103.0 96.1 95.6
Q1 2012 102.8 96.3 98.9
Q2 2012 103.0 97.6 103.2
Q3 2012 103.1 97.9 102.4
Q4 2012 103.5 100.0 100.9

There has been an upward trend in small business hiring since the third quarter of 2009 and small business employment has been above pre-recession levels since the beginning of the second quarter of 2010. Employment in medium-sized businesses has been recovering steadily since the fourth quarter of 2009, reaching pre-recession levels in the fourth quarter of 2012. Employment in large firms also fell during the recession and recovered pre-recession levels in the second quarter of 2012.

http://www.ic.gc.ca/eic/site/061.nsf/eng/02806.html#q4