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Key Small Business Statistics - July 2006
How many people are self-employed?
In 2005, self-employed workers represented nearly 16 percent of all employed workers in the Canadian economy (Table 11). The number of self-employed peaked in 2005 at 2.51 million. Over the past decade, the number of self-employed workers increased 20.6 percent. 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 percent to 36 percent, and has remained at around 35 percent since 1999.
Table 12 shows a breakdown of the self-employed in five categories from 1995 to 2005. On average in 2005, of 2.51 million self-employed workers, 64.6 percent had no paid help, 34.4 percent worked with paid help and 1.0 percent were unpaid family workers. Self-employed workers with and without paid help are further categorized according to whether their businessesFootnote 8 were incorporated or not. Of those who worked without paid help, 1.2 million or 75 percent were unincorporated in 2005; 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 percent annually, on average, over the past 10 years (not shown), compared with 2.0 percent for all self-employed. However, there was a great difference in the pattern of growth between those with paid help and those without. The number of those with paid help grew 0.7 percent annually, on average, between 1995 and 2005. The number of incorporated self-employed persons with paid help generally declined between 1995 and 2002 — with the exception of small increases in 1997 and 1999 — after which, four consecutive annual increases occurred for the first time since the late 1980s and early 1990s (not shown). In contrast, the number of incorporated self-employed persons without paid help increased rapidly between 1995 and 2005, with average annual increases of 8.8 percent.
As shown in Figure 7, the various categories of self-employed workers experienced slightly different growth rates from 1976 to 2005, 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 percent during this period. Self-employed workers owning incorporated businesses registered the highest growth rates — 7.5 percent for businesses without paid employees and 3.6 percent for businesses with paid employees. A third category also showed a relative increase — 2.5 percent for self-employed workers owning unincorporated businesses with no paid employees. Lastly, two categories experienced growth rates below the 2.5 percent average, which means their relative importance in terms of self-employed workers diminished. These categories were self-employed workers owning unincorporated businesses with paid employees (0.5 percent) and unpaid family workers (-4.9 percent).
Figure 7: Self-Employed Persons (Thousands), by Category, 1976–2005
Source: Statistics Canada, Labour Force Survey, April 2006.
Footnote 8. 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.)."