Key Small Business Statistics - July 2006

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 5 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 2005, just over 5.0 million employees on payroll, or 48 percent of the total private sector labour force,^{Footnote 5} worked for small enterprises (those with fewer than 100 employees), as shown in Table 5. Nearly 1.7 million, or 16 percent, worked for medium-sized enterprises (those with 100 to 499 employees). In total, therefore, SMEs employed just over 6.7 million, or 64 percent, of private sector employees covered by SEPH.

Table 5: Number of Private Sector Employees by Industry and Size of Business Enterprise, 2005^1,2,3

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 2006, 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	63 055	9 727	15 678	10 335	6 240	41 980	7 210	2 352	9 562	11 513
Mining	163 479	7 956	13 247	11 456	9 252	41 911	19 335	9 275	28 610	92 959
Utilities2	107 886	92	383	365	435	1 274	2 982	1 453	4 435	102 177
Construction	683 214	127 994	204 573	122 608	68 812	523 987	68 273	17 555	85 828	73 399
Manufacturing	1 952 543	42 436	168 813	216 651	208 187	636 087	343 065	138 758	481 823	834 633
Percent in Goods- Producing Sector	28.4	21.2	22.3	26.8	29.3	24.7	35.7	38.4	36.4	29.8
Wholesale Trade	738 681	51 304	144 296	118 825	83 558	397 983	110 660	36 921	147 581	193 117
Retail Trade	1 695 839	115 925	300 563	211 315	172 674	800 477	143 182	31 186	174 368	720 993
Transportation and Warehousing2	522 157	39 884	62 456	51 084	39 919	193 343	54 466	18 312	72 778	256 036
Information and Cultural	349 671	10 408	23 362	22 511	19 241	75 522	30 443	15 086	45 529	228 621
Finance and Insurance	582 336	23 786	41 658	37 204	31 450	134 098	45 435	21 993	67 428	380 811
Real Estate and Rental	243 713	39 382	56 732	31 336	21 590	149 040	25 067	10 237	35 304	59 369
Professional Services	667 573	125 694	141 577	86 447	55 347	409 065	72 689	29 802	102 491	156 017
Management of Companies and Enterprises	94 846	12 831	14 150	10 674	6 152	43 807	8 997	3 662	12 659	38 381
Administration, Waste Management	661 218	46 702	87 181	65 155	55 588	254 626	95 756	41 191	136 947	269 645
Health2	219 339	73 189	92 664	23 685	6 630	196 168	2 035	945	2 980	20 191
Arts, Entertainment and Recreation	246 205	14 410	40 817	38 903	28 602	122 732	36 449	13 247	49 696	73 777
Accommodation and Food	954 237	50 466	228 729	219 668	148 163	647 026	117 418	31 342	148 760	158 451
Other Services	511 018	96 962	168 963	68 944	39 061	373 930	50 325	17 317	67 642	69 446
Percent in Service- Producing Sector	71.6	78.8	77.7	73.2	70.7	75.3	64.3	61.6	63.6	70.2
Industry Aggregate Total	10 457 010	889 148	1 805 841	1 347 166	1 000 901	5 043 056	1 233 787	440 634	1 674 421	3 739 536

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 five industries: the (non-institutional) health care sector (89 percent), construction industry (77 percent), other services (73 percent), accommodation and food (68 percent), and forestry (67 percent). In four other 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 (0.80 million), accommodation and food (0.65 million), manufacturing (0.64 million), construction (0.52 million), professional services (0.41 million) and wholesale trade (0.40 million). These industries alone accounted for 68 percent of all jobs in small firms in Canada.

Figure 3: Number of Private Sector Employees by Industry and Size of Business Enterprise, 2005^1,2
D

Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), March 2006, 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 5. 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.