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Key Small Business Statistics - July 2005
How many people are self-employed?
In 2004, self-employed workers represented approximately 15% of all employed workers in the Canadian economy. The number of self-employed peaked at nearly 2.5 million in 1999, subsequently declined over the next year, but by 2004 had climbed back to the 2.5 million peak. Moreover, quarterly data indicate that the number of self-employed in the last three quarters of 2004 exceeded this peak in annual data (Table 10). In recent years, slightly over one third of self-employed workers have been female; the share of female self-employment rose steadily from 1976 to 1998, from 26% to 36%, and has remained at around 35% since 1999.
Table 11 shows a breakdown of the self-employed in five categories from 1976 to 2004. On average in 2004, of 2.5 million self-employed workers, 64.7% had no paid help, 34.0% worked with paid help and 1.2% were unpaid family workers. Both self-employed workers with and without paid help are further categorized according to whether their businessesFootnote 6 were incorporated or not. Of those who worked without paid help, 1.2 million or 76% were unincorporated; this category accounted for half the total number of self-employed in Canada.
The number of self-employed persons with incorporated businesses increased 4.7% annually over the past 30 years, compared with 2.5% for all self-employed. However, there was a great difference in the pattern of growth between those with paid help and those without. Those with paid help grew 3.6% annually, on average, but this growth was not steady between 1976 and 2004. Prior to 1993, the number of self-employed persons with paid help increased progressively, but grew very slowly through the mid-1990s and after 2002. From 1999 to 2002, the number declined. In contrast, self-employed persons with incorporated businesses that do not have paid help increased rapidly throughout the entire period between 1976 and 2004. On average, they increased 7.6% annually.
As shown in Figure 7, the various categories of self-employed workers experienced slightly different growth rates from 1976 to 2004, which means that the relative importance of these various categories changed slightly over time. The total number of self-employed workers in Canada increased at an annual rate of 2.5% during this period. Self-employed workers owning incorporated businesses registered the highest growth rates – 7.6% in businesses without paid employees and 3.6% in businesses with paid employees. A third category also showed a relative increase – 2.6% for self-employed workers owning unincorporated businesses with no paid employees. Lastly, two categories experienced growth rates below the 2.5% average rate for the group as a whole, which meant that their relative importance in the overall category of self-employed workers diminished. These two sub-groups were self-employed workers owning unincorporated businesses with paid employees (0.5%), and unpaid family workers (-5.0%).
Figure 7: Self-employed Persons (Thousands), by Category 1976–2004
Source: Statistics Canada, Labour Force Survey, March 2005.
Footnote 6. While the term "incorporated activities" generally refers to businesses, this is not necessarily the case when we speak of "unincorporated activities". According to the definition used by Statistics Canada's Labour Force Survey, self-employed workers involved in unincorporated activities are "active owners of a business, farm or unincorporated professional office and independent workers who do not have a business as such (child-care workers, newspaper delivery agents, etc.)".