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Canadian Small Business Exporters - June 2011

Highlights

This special edition of Key Small Business Statistics includes three sections each using a different source of data. In the first section, the Exporter Register, which only includes merchandise exports over $30 000, is the primary source used. The source used in the second section is the Survey on Financing of Small and Medium Enterprises, which measures goods and services exports of any value. Finally, the Survey of Innovation and Business Strategy (SIBS) is the source used in the third section. This survey was conducted to better understand strategic decisions, innovation activities and operational tactics used by Canadian enterprises. For more details on these sources, see the Data Sources and Methodology section.

Key Statistics on Small Business Exports

• Nine percent of Canadian small and medium-sized enterprises (SMEs) export goods and services according to the Survey on Financing of Small and Medium Enterprises, which asks business owners to report their export activities. According to the Exporter Register, which tracks goods, it is estimated that 2 percent of SMEs export only goods.
• In 2009, about 86 percent of Canadian exporters were small businesses compared with 87 percent in 1999. They were responsible for $68 billion (25 percent) of the total value of exported goods, with an average value of $2 million per firm. Medium-sized businesses accounted for $51 billion (18 percent) of the total value of exports, while large businesses accounted for $157 billion (57 percent).
• The proportion of small businesses that export (1.4 percent) is lower than the proportion of small businesses in the overall economy (98 percent). About 31 000 small businesses exported goods in 2009.
• The largest contributions to exports by small businesses were in retail trade (79.1 percent), agriculture, forestry, fishing and hunting (72.3 percent) and other sectors (72 percent).
• In 2009, small businesses exported disproportionally more than medium-sized or large firms to a number of markets. They accounted for 65 percent of the value of Canadian exports to India. Other major export destinations for small firms were Egypt (63.3 percent), Turkey (60.6 percent) and South Korea (52.8 percent).
• The value of small business exports to BRIC (Brazil, Russian Federation, India and China) countries increased from about $1.3 billion in 1999 to $5.5 billion in 2009, representing approximately 2 percent and 7 percent of the total value of small business exports respectively.
• Small business enterprises accounted for approximately 23 percent of the value of exports to the United States in 2009. The main U.S. market for Canadian small businesses was the Midwest region (32 percent), while they exported the least to the Industrial Heartland (18 percent).
• In 1999, 2004 and 2009, 88 percent or more of the value of small business exports came from Quebec, Ontario, Alberta and British Columbia (including the Territories). Ontario and Alberta had the largest share of the value of exports among small businesses in 2009.
• In 2009, mineral products represented the largest proportion (almost 30 percent) of the value of small business exports, but enterprises exporting those goods accounted for only 1.4 percent of the total number of small business exporters.
• In 2008, the total value of imports to Canada was approximately $380 billion. Eighty-seven percent of importers were small businesses and were responsible for $88 billion (23 percent) of the total value of imports. In 2008, medium-sized businesses accounted for 9 percent of all importers, while large businesses represented about 4 percent of all importers.

Financing Profile of Small and Medium-Sized Enterprise Exporters

• In 2007, the likelihood of exporting increased with business size, both in terms of number of employees and revenue size.
• Among SME exporters, the percentage of revenues derived from exports of goods and services was similar across all size groups (average of 47 percent), suggesting that firm size did not determine export intensity.
• On average, exporters were more innovative (investing more in research and development) and growth oriented, and had been in operation for more years than non-exporters.
• SME exporters were more likely to request external financing than non-exporters (27 percent compared with 17 percent in 2007), but were also more likely to report obtaining external financing as an obstacle to business growth (21 percent compared with 17 percent in 2007).
• In both 2004 and 2007, the average SME exporter requested a higher amount of debt financing than its non-exporter counterpart. Specifically, in 2004 the average loan was $209 000 for SME exporters and $141 000 for non-exporters. In 2007, the average loan was $461 000 for SME exporters and $232 000 for non-exporters.
• SME exporters had greater difficulty obtaining approval for external financing in 2004 (86 percent approval rate versus 91 percent approval rate for non-exporters), but had a slightly easier time in 2007 (97 percent approval rate versus 96 percent approval rate for non-exporters). Although approval rates decreased in 2009, exporters had less difficulty obtaining external financing than non-exporters (85 percent versus 79 percent).

SME Involvement in Global Value Chains

• Approximately 50 percent of manufacturing enterprises engaged in international business activities between 2007 and 2009.
• Between 2007 and 2009, medium-sized manufacturing enterprises displaced (relocated or outsourced) out of Canada more business activities in the production of goods than small and large manufacturing enterprises. Over the same period, small manufacturing enterprises were more likely to displace their marketing, sales and after sales services than medium-sized and large enterprises.
• Small and medium-sized manufacturing enterprises were more likely than large manufacturing enterprises to fill orders from domestic buyers and then export the goods "as is." Specifically, 21 percent of small enterprises and 24 percent of medium-sized enterprises were indirect exporters of final goods compared with 17 percent of large enterprises.

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