Key Small Business Statistics - July 2005

How many people work for small businesses?

To best answer this question, it is necessary to look at business establishments as part of the larger enterprise to which they belong, where applicable. Statistics Canada defines a business enterprise as "a family of businesses under common ownership and control for which a set of consolidated financial statements is produced on an annual basis". Statistics Canada's Survey of Employment, Payrolls and Hours (SEPH) covers employer businesses in Canada and reports the number of employees at the enterprise level. Self-employed persons who are not on a payroll are not included in these figures, nor are employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. Firms are grouped into seven size categories: those with fewer than 4 employees, from 5 to 19, from 20 to 49, from 50 to 99, from 100 to 299, from 300 to 499, and 500 and more employees.

According to SEPH data, on average in 2004, just over 5.0 million employees on payroll, or 49% of the total private labour force,^{Footnote 4} worked for small enterprises (those with fewer than 100 employees), as shown in Table 5. Over 1.6 million, or 16%, worked for medium-sized enterprises (those with 100 to 499 employees). In total, therefore, SMEs employed close to 6.7 million, or 65%, of all employees in the private sector covered by SEPH.

Table 5: Number of Private Sector Employees by Industry and Size of Business Enterprise, 2004^{1, 2, 3}

Industry	Total	Size of Business Enterprise (No. of Employees)
		0–4	5–19	20–49	50–99	Small (<100)	100–299	300–499	Medium (100–499)	Large (500+)
Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), March 2005, and calculations by Industry Canada. Industry data are classified in accordance with the North American Industry Classification System (NAICS). Note 1: SEPH data exclude self-employed workers who are not on a payroll, and employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. The data breaking down employment by size of firm also exclude unclassified industries. Note 2: Besides the data excluded from the SEPH, the data shown in this table also exclude employment in public administration, public utilities (water, sewage and other systems), postal services, public transit, educational services, and institutional and other government-funded health care services, but include employment in the CBC, private practices (physicians, dentists and other health practitioners), and beer and liquor stores. Industry Canada's Small Business Quarterly regularly publishes data similar to those in Table 5, but without excluding public sector employment. A technical note on the separation of public and private sector employment is available upon request by contacting Customer Services at sbrp-rppe@ic.gc.ca. Note 3: By conventional Statistics Canada definition, the goods-producing sector consists of North American Industry Classification System (NAICS) codes 11 to 31–33, while NAICS codes 41 to 91 define the service-producing sector.
Forestry	52 367	9 706	13 556	7 738	4 906	35 905	5 029	1 390	6 419	10 044
Mining	155 088	7 652	12 779	11 241	9 045	40 718	19 074	7 515	26 589	87 781
Utilities2	107 822	91	408	357	450	1 307	2 795	1 128	3 923	102 592
Construction	667 586	123 939	204 058	120 636	68 682	517 314	62 272	16 551	78 822	71 449
Manufacturing	1 996 455	43 730	172 269	217 455	210 537	643 991	348 166	150 138	498 303	854 162
Percent in Goods-producing Sector	28.9	20.8	22.4	26.7	29.5	24.7	36.3	40.4	37.4	30.8
Wholesale Trade	741 018	51 864	145 508	120 703	87 427	405 501	106 915	36 144	143 059	192 458
Retail Trade	1 644 075	118 178	297 343	208 058	169 696	793 274	136 136	28 168	164 304	686 496
Transportation and Warehousing2	513 397	39 629	62 999	51 925	39 170	193 723	53 382	17 665	71 047	248 627
Information and Cultural	343 195	10 358	23 678	22 431	20 353	76 820	30 406	14 603	45 008	221 367
Finance and Insurance	575 967	24 629	41 425	36 567	31 154	134 259	46 231	20 550	66 781	374 928
Real Estate and Rental	233 494	38 831	55 279	30 937	20 922	145 969	23 625	9 222	32 847	54 679
Professional Services	659 929	124 112	141 130	85 898	53 347	404 487	70 776	30 246	101 021	154 421
Management of Companies and Enterprises	90 674	13 045	14 243	10 674	6 026	43 988	9 523	4 107	13 630	33 057
Administration, Waste Management	627 851	46 527	86 540	64 578	53 710	251 354	91 131	38 704	129 835	246 663
Health2	216 968	73 893	91 374	22 820	6 259	194 345	2 117	1 103	3 220	19 403
Arts, Entertainment and Recreation	244 280	14 354	40 808	38 622	28 853	122 636	36 769	13 801	50 570	71 274
Accommodation and Food	941 324	51 577	227 809	217 238	148 486	645 109	111 437	29 247	140 683	155 534
Other Services	505 793	97 488	166 896	69 545	37 493	371 422	50 360	17 470	67 829	66 542
Percent in Service-producing Sector	71.1	79.2	77.6	73.3	70.5	75.3	63.7	59.6	62.6	69.2
Industry Aggregate Total	10 317 481	889 599	1 798 100	1 337 419	996 999	5 022 118	1 206 141	437 748	1 643 889	3 651 474

The distribution of employment by size of firm varies considerably across industries. As shown in Table 5 and Figure 3, small businesses account for over two thirds of employment in four industries: the (non-institutional) health care sector (90%), construction industry (77%), other services (73%), and accommodation and food (69%). In another five industries at least half of the workforce is employed by small businesses. Lastly, in terms of the total number of employees, industries that had the largest number of employees working for small firms were, in order of magnitude, retail trade (0.79 million), accommodation and food (0.65 million), manufacturing (0.64 million), construction (0.52 million), wholesale trade (0.41 million) and professional services (0.40 million). These industries alone accounted for 68% of all jobs in small firms in Canada.

Figure 3: Number of Private Sector Employees by Industry and Size of Business Enterprise, 2004¹

Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), March 2005, and calculations by Industry Canada. Industry data are classified in accordance with the North American Industry Classification System (NAICS).

Note 1: SEPH data exclude self-employed workers who are not on a payroll, and employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. The data breaking down employment by size of firm also exclude unclassified industries.

Note 2: Besides the data excluded from the SEPH, the data shown in this figure also exclude employment in public administration, public utilities (water, sewage and other systems), postal services, public transit, educational services, and institutional and other government-funded health care services, but include employment in the CBC, private practices (physicians, dentists and other health practitioners), and beer and liquor stores. Industry Canada's Small Business Quarterly regularly publishes data similar to those in Figure 3, but without excluding public sector employment. A technical note on the separation of public and private sector employment is available upon request by contacting Customer Services at sbrp-rppe@ic.gc.ca.

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Footnote 4. Private sector employment in the SEPH data was identified with the aid of Employment Dynamics and Small Business Profiles data for corresponding years and by projecting trends for more recent years. A technical note on the methodology used in this process is available and can be obtained by contacting Customer Services at sbrp-rppe@ic.gc.ca. In addition to the industries excluded from SEPH, data shown in Table 5 and Figure 3 exclude employment in public administration, public utilities (water, sewage and other systems), postal services, public transit, educational services, and institutional and other government-funded health care services, but include employment in the CBC, private practices (physicians, dentists and other health practitioners), and beer and liquor stores.