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Key Small Business Statistics - July 2009
How many jobs do small businesses create?
The data that make it possible to answer this question are derived from Statistics Canada's Survey of Employment, Payrolls and Hours (SEPH), and are regularly published in Industry Canada's Small Business Quarterly. SEPH data exclude self-employed workers who are not on a payroll. Other limitations also apply (see How many people work for small businesses?). Historical employment data for the period from 1996 to 2000 are reported for only three firm-size categories (small, medium and large), so job creation over these years was estimated for the seven size categories (including four sub-categories for small businesses) using ratios to distribute annual employment levels across the size categories. Since 2000, Statistics Canada has been publishing the SEPH data with the seven size categories.
Table 6 and Figure 5 display relative contributions to the net year-over-year change in private sector paid employment by small, medium-sized and large businesses from 1998 to 2008. Over the years, the relative contribution in terms of size varied greatly. During the period under review, each of the business-size categories played the leading role at different times in net job creation in Canada. For four years, from 2000 to 2002 and in 2008, small businesses made the greatest contribution to net job creation. On the other hand, large businesses played the leading job-creation role in 1998 and 1999, from 2003 to 2007. The year 2003 was very atypical because job creation only occurred in small businesses with fewer than 20 employees and in large businesses, resulting in skewed relative contributions to job creation. Over the 1998 to 2008 period, small firms accounted for 36 percent of all jobs created, on average, in the private sector.
| Year | Size of Business — Number of Employees (Percent Contribution) | ||||||
|---|---|---|---|---|---|---|---|
| 0–4 | 5–19 | 20–49 | 50–99 | Small (<100) | Medium (100–499) | Large (500+) | |
|
[Description of table 6]
Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), April 2009, and calculations by Industry Canada. Historical data are frequently revised and, as of 2000, are available on a North American Industry Classification System (NAICS) basis. Updates for the total economy covered by SEPH are regularly published in Industry Canada's Small Business Quarterly. 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. Data 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. Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics are largely due to revisions to the historical SEPH data. A small proportion of the differences is the result of refinements in the methodology used to separate the private and public sectors. 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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| 1998 | 2 | 3 | 14 | 12 | 31 | 29 | 40 |
| 1999 | 4 | -1 | 9 | 11 | 23 | 25 | 52 |
| 2000 | 4 | 18 | 17 | 11 | 50 | 15 | 34 |
| 2001 | 16 | 10 | 17 | 13 | 57 | 9 | 34 |
| 2002 | -2 | 5 | 28 | 31 | 62 | 9 | 28 |
| 2003 | 80 | 142 | -5 | -185 | 32 | -118 | 193 |
| 2004 | -20 | 33 | -11 | 5 | 7 | 0 | 93 |
| 2005 | 9 | -9 | 4 | 8 | 11 | 15 | 74 |
| 2006 | 7 | 7 | 12 | 10 | 37 | 20 | 43 |
| 2007 | -2 | 15 | 14 | 9 | 36 | 18 | 46 |
| 2008 | 7 | 14 | 16 | 15 | 52 | 9 | 39 |
[Description of Figure 5]
Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), April 2009, and calculations by Industry Canada. Historical data are frequently revised and, as of 2000, are available on a North American Industry Classification System (NAICS) basis. Updates for the total economy covered by SEPH are regularly published in Industry Canada's Small Business Quarterly.
Table 7 and Figure 6 show year-over-year quarterly changes in paid employment from the third quarter of 2005 to the fourth quarter of 2008 by business size. Jobs were created in the private sector in every quarter over this entire period and the number of jobs created increased rapidly, especially in 2006. In 2007, the rate of job creation stabilized at about 260 000 per quarter. From the last quarter of 2007 to the last quarter of 2008, however, there was a significant drop in the rate of job creation (from 270 000 in Q4 2007 to 20 000 in Q4 2008). The decrease in GDP growth was a factor causing job losses in the fourth quarter of 2008 among medium-sized businesses, especially those with 100 to 299 employees. Small and large businesses had small increases in employment in Q4 2008 of 18 000 jobs and 11 000 jobs respectively.
| Year and Quarter | Total Net Change |
Net Private Sector Paid Employment Change by Size of Business | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 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), April 2009, and calculations by Industry Canada. 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. Data 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. Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics are largely due to revisions to the historical SEPH data. A small proportion of the differences is the result of refinements in the methodology used to separate the private and public sectors. 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: Minor discrepancies between total net employment change and the sum of changes by size are largely due to small differences between aggregate and the sum of disaggregated source data. |
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| 2005 Q3 | 150 796 | 26 027 | -17 552 | 23 109 | 27 670 | 59 254 | 29 481 | 232 | 29 713 | 61 825 |
| Q4 | 200 243 | 8 939 | 12 238 | 17 175 | 19 742 | 58 093 | 27 326 | 10 858 | 38 185 | 103 964 |
| 2006 Q1 | 304 300 | 18 864 | 31 113 | 35 838 | 31 549 | 117 363 | 48 772 | 15 691 | 64 462 | 122 469 |
| Q2 | 302 720 | 20 691 | 33 317 | 37 901 | 33 975 | 125 884 | 41 048 | 21 424 | 62 471 | 114 363 |
| Q3 | 274 521 | 12 128 | 19 313 | 31 540 | 21 656 | 84 637 | 31 443 | 21 367 | 52 810 | 137 076 |
| Q4 | 294 236 | 30 303 | 356 | 39 696 | 31 722 | 102 077 | 31 551 | 27 422 | 58 973 | 133 184 |
| 2007 Q1 | 241 416 | -12 453 | 26 864 | 35 895 | 18 645 | 68 951 | 36 044 | 21 283 | 57 327 | 115 142 |
| Q2 | 229 204 | -10 598 | 27 100 | 33 379 | 21 808 | 71 690 | 33 860 | 8 257 | 42 118 | 115 402 |
| Q3 | 297 243 | 4 620 | 49 143 | 39 659 | 28 966 | 122 389 | 39 088 | 9 546 | 48 634 | 126 227 |
| Q4 | 270 628 | -6 166 | 52 939 | 36 520 | 25 921 | 109 213 | 32 229 | 9 684 | 41 914 | 119 501 |
| 2008 Q1 | 201 454 | 13 604 | 37 218 | 29 842 | 27 709 | 108 373 | 7 799 | 8 110 | 15 909 | 77 177 |
| Q2 | 140 196 | 15 916 | 27 537 | 32 128 | 26 311 | 101 892 | 5 568 | 17 076 | 22 644 | 15 656 |
| Q3 | 131 530 | 8 300 | 3 011 | 20 904 | 23 978 | 56 194 | -10 844 | 24 095 | 13 252 | 62 070 |
| Q4 | 20 268 | -536 | 10 956 | 4 483 | 3 135 | 18 039 | -17 031 | 8 512 | -8 519 | 10 750 |
| % Contribution to Private Sector Employment Change by Size of Business | ||||||||||
| 2005 Q3 | 100 | 17.3 | -11.6 | 15.3 | 18.3 | 39.3 | 19.6 | 0.2 | 19.7 | 41.0 |
| Q4 | 100 | 4.5 | 6.1 | 8.6 | 9.9 | 29.0 | 13.6 | 5.4 | 19.1 | 51.9 |
| 2006 Q1 | 100 | 6.2 | 10.2 | 11.8 | 10.4 | 38.6 | 16.0 | 5.2 | 21.2 | 40.2 |
| Q2 | 100 | 6.8 | 11.0 | 12.5 | 11.2 | 41.6 | 13.6 | 7.1 | 20.6 | 37.8 |
| Q3 | 100 | 4.4 | 7.0 | 11.5 | 7.9 | 30.8 | 11.5 | 7.8 | 19.2 | 49.9 |
| Q4 | 100 | 10.3 | 0.1 | 13.5 | 10.8 | 34.7 | 10.7 | 9.3 | 20.0 | 45.3 |
| 2007 Q1 | 100 | -5.2 | 11.1 | 14.9 | 7.7 | 28.6 | 14.9 | 8.8 | 23.7 | 47.7 |
| Q2 | 100 | -4.6 | 11.8 | 14.6 | 9.5 | 31.3 | 14.8 | 3.6 | 18.4 | 50.3 |
| Q3 | 100 | 1.6 | 16.5 | 13.3 | 9.7 | 41.2 | 13.2 | 3.2 | 16.4 | 42.5 |
| Q4 | 100 | -2.3 | 19.6 | 13.5 | 9.6 | 40.4 | 11.9 | 3.6 | 15.5 | 44.2 |
| 2008 Q1 | 100 | 6.8 | 18.5 | 14.8 | 13.8 | 53.8 | 3.9 | 4.0 | 7.9 | 38.3 |
| Q2 | 100 | 11.4 | 19.6 | 22.9 | 18.8 | 72.7 | 4.0 | 12.2 | 16.2 | 11.2 |
| Q3 | 100 | 6.3 | 2.3 | 15.9 | 18.2 | 42.7 | -8.2 | 18.3 | 10.1 | 47.2 |
| Q4 | 100 | -2.6 | 54.1 | 22.1 | 15.5 | 89.0 | -84.0 | 42.0 | -42.0 | 53.0 |
[Description of Figure 6]Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), April 2009, and calculations by Industry Canada.
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. Data 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.
Note 2: Differences between these data and those published in previous versions of Key Small Business Statistics are largely due to revisions to the historical SEPH data. A small proportion of the differences is the result of refinements in the methodology used to separate the private and public sectors. 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.
Small businesses created jobs in each year-over-year period between the third quarter of 2005 and the fourth quarter of 2008. Large businesses created the most new jobs in ten of the quarters over that period, while small businesses created more jobs in four quarters (Q2 2006, Q1 2008, Q2 2008, Q4 2008).
Job creation among micro-businesses was the most volatile of the seven firm-size categories. Micro-businesses shed jobs in three quarters in 2007 and in the last quarter of 2008. In 2006, however, micro-businesses were a significant source of job creation when they created more than 18 000 jobs in three of the four quarters.
