Archived — Key Small Business Statistics - August 2013

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 The following document is out of date.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. Although the studies below expand the scope of the definition of small business to include businesses with no paid employees, the self-employed and indeterminate businesses, these are the only studies available that measure the contribution of small businesses to GDP. Due to the different approaches to measuring GDP, estimates vary greatly.

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 9 Table 8 shows small businesses' contribution to GDP (including public and private sectors) for Canada and each province from 2002 to 2011.

Table 8: Small Businesses' Contribution to GDP by Province, 2002 to 2011
Province Contribution to GDP (Percent)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: British Columbia's Statistical Service, Small Business Profile 2012: 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 19 18 21 19 19 18 18 20 19 20
Prince Edward Island 32 29 31 30 30 29 29 29 26 32
Nova Scotia 26 25 26 25 25 26 25 25 24 23
New Brunswick 25 23 25 25 24 25 25 24 23 22
Quebec 27 27 29 30 30 30 31 30 28 27
Ontario 24 23 24 25 26 26 27 26 25 25
Manitoba 23 24 25 25 26 26 26 26 24 24
Saskatchewan 26 24 29 29 30 32 33 35 30 32
Alberta 28 26 26 27 29 31 31 29 27 27
British Columbia 28 29 33 33 33 34 34 32 30 29
Canada 26 25 27 28 28 29 29 28 27 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 2011, small businesses accounted for approximately 27 percent of Canada's GDP. This level of contribution has remained consistent over the past decade. The contribution to GDP ranges from a low of 20 percent in Newfoundland and Labrador to a high of 32 percent in Saskatchewan and Prince Edward Island. The largest increase in the contribution to GDP occurred in Saskatchewan, where it was 26 percent in 2002 and 32 percent in 2011. The contribution to GDP decreased most in Nova Scotia and New Brunswick, where it fell 3 percent over the period.

In a recent study, Statistics Canada found that, in 2008, small businesses (here defined as those with 1 to 99 employees) accounted for about 41 percent of private sector GDP. In contrast, large businesses accounted for the most, with 48 percent of GDP, and medium-sized businesses the least, with 11 percent of GDP. Of the total economy, small businesses in the private sector accounted for about 30 percent of GDP, while medium-sized and large firms accounted for 9 and 36 percent of GDP respectively. The public sector accounts for the remaining 25 percent.Footnote 10

Figure 13 compares the share of GDP by size of business across different industries in 2008. Small business GDP contributions were highest from agriculture (92.8 percent), health (82.4 percent), other services (81.0 percent) and education (79.1 percent). In contrast, small businesses contributed far less to the GDP from utilities (2.6 percent), mining (8.6 percent), information (10.3 percent) and manufacturing (25.5 percent).

Figure 13: Share of GDP within Industries by Size of Business Establishment, 2008

Figure 13: Share of GDP within Industries by Size of Business Establishment, 2008
Source: Statistics Canada, The Growth of Large Firms in Canada, 2008, and calculations by Industry Canada.
Description of Figure 13
Figure 13: Share of GDP within Industries by Size of Business Establishment, 2008
Industries Small (1–99) Medium (100–499) Large (500+)
Utilities 2.6% 4.8% 92.6%
Mining 8.6% 8.5% 82.9%
Information 10.3% 7.6% 82.1%
Manufacturing 25.5% 18.3% 56.2%
Transportation 33.5% 12.7% 53.8%
Arts and Entertainment 39.6% 10.4% 49.9%
Wholesale 40.0% 17.8% 42.2%
Administrative 44.2% 15.6% 40.3%
Finance 44.8% 6.9% 48.3%
Retail 46.3% 9.7% 43.9%
Professional 57.4% 12.7% 29.9%
Accommodation and Food Services 61.5% 15.5% 23.0%
Construction 72.7% 13.2% 14.1%
Education 79.1% 10.1% 10.9%
Other Services 81.0% 7.9% 11.0%
Health 82.4% 6.8% 10.8%
Agriculture 92.8% 3.7% 3.5%
Help us improve
Back to "Help us improve" section.
  
Back to "What's the problem?" section.
Got it, thanks!
Um, you didn't enter anything.
Date modified: