Key Small Business Statistics - January 2019

PDF Version

Table of contents

  1. Number of businesses
  2. Employment
  3. Growth
  4. Export of goods
  5. Gross domestic product

List of figures

List of tables


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Foreword

Key Small Business Statistics provides statistical data on the business sector in Canada, focusing on small and medium-sized enterprises (SMEs). This edition contains data on the following questions:

In this publication, the definition of what constitutes a "business" or an "enterprise" may vary slightly according to the statistical sources used. Below is a list of those sources and links to the definitions used:

Innovation, Science and Economic Development Canada (ISED) defines a business based upon the number of paid employees. For this reason, self-employed and "indeterminate" businesses are generally not included in the present publication as they do not have paid employees.Footnote 1

Accordingly, this publication defines an SME as a business establishment with 1–499 paid employees, more specifically:

Notes on data and statistics:

This new edition and previous publications are available on the SME Research and Statistics website.


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Highlights

Number of businesses, births and deaths

Employment

High-growth firms

Export of goods

SMES' Contribution to gross domestic product


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1. Number of Businesses

1.1 How many SMEs are there in Canada?

As of December 2017, there were 1.18 million employer businesses in Canada (Table 1). Of these, 1.15 million (97.9 percent) were small businesses, 21,926 (1.9 percent) were medium-sized businesses and 2,939 (0.2 percent) were large businesses.

More than half of Canada's small employer businesses are concentrated in Ontario and Quebec (417,742 and 236,705 respectively). Western Canada has a large number of small businesses led by British Columbia, which had 179,517 small businesses as of December 2017. In the Atlantic region, Nova Scotia has the greatest number of small businesses at 28,874.

The province with the greatest number of businesses per thousand individuals over 18 years of age is Prince Edward Island (49.4), followed by Alberta (48.8). In contrast, Quebec has the smallest number of businesses per thousand individuals over 18 years of age (35.3), followed by Ontario (37.2) and Nova Scotia (37.3).

Table 1: Total number of employer businesses by business size and number of SMEs per 1,000 provincial population, December 2017
Province/Territory Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500+ employees)
Total Number of businesses per 1,000 individuals
(18+ years)
Number % Number % Number %

Sources: Statistics Canada, Table 33-10-0037-01 — Canadian Business Counts, with employees, December 2017;
Statistics Canada, Table 17-10-0005-01 — Population estimates on July 1st, by age and sex; and ISED calculations.

Newfoundland and Labrador 16,580 97.9 310 1.8 43 0.3 16,933 38.7
Prince Edward Island 5,963 98.3 94 1.5 11 0.2 6,068 49.4
Nova Scotia 28,874 97.9 554 1.9 68 0.2 29,496 37.3
New Brunswick 24,827 98.0 449 1.8 59 0.2 25,335 40.5
Quebec 236,705 97.9 4,447 1.8 603 0.2 241,755 35.3
Ontario 417,742 97.7 8,744 2.0 1,232 0.3 427,718 37.2
Manitoba 38,226 97.6 822 2.1 122 0.3 39,170 37.8
Saskatchewan 40,072 98.3 625 1.5 86 0.2 40,783 45.4
Alberta 160,264 98.0 2,933 1.8 387 0.2 163,584 48.8
British Columbia 179,517 98.3 2,829 1.5 324 0.2 182,670 46.1
Territories 3,999 97.0 119 2.9 4 0.1 4,122 46.4
Canada 1,152,769 97.9 21,926 1.9 2,939 0.2 1,177,634 39.7

Of the 1,177,634 employer businesses in Canada, 21.6 percent are in the goods-producing sector and 78.4 percent are in the service-producing sector (Table 2). Micro-enterprises (1−4 employees) make up 53.8 percent of Canadian businesses. By adding those businesses with 5−9 employees, this number increases to 73.4 percent. In other words, almost three out of four Canadian businesses have 1−9 employees. It should be noted that the distribution of businesses according to the number of employees varies slightly between the goods-producing and service-producing sectors.

Table 2: Number of employer businesses by sector and business size (number of employees), December 2017
Number of employees Goods Service Total
Number Cumulative
%
Number Cumulative
%
Number Cumulative
%

Note: By definition, the goods-producing sector consists of agriculture, forestry, fishing and hunting; mining, quarrying, and oil and gas extraction; utilities; construction and manufacturing. The service-producing sector consists of wholesale trade; retail trade; transportation and warehousing; information and cultural industries; finance and insurance; real estate and rental and leasing; professional, scientific and technical services; management of companies and enterprises; administrative and support, waste management and remediation services; educational services; health care and social assistance; arts, entertainment and recreation; accommodation and food services; other services (except public administration) and public administration.

Source: Statistics Canada, Table 33-10-0037-01 — Canadian Business Counts, with employees, December 2017.

1–4 employees 144,678 56.9 489,385 53.0 634,063 53.8
5–9 employees 49,059 76.2 181,798 72.7 230,857 73.4
10–19 employees 27,736 87.2 125,065 86.2 152,801 86.4
20–49 employees 19,723 94.9 81,630 95.1 101,353 95.0
50–99 employees 7,049 97.7 26,646 97.9 33,695 97.9
Small businesses
(1–99 employees)
248,245 97.7 904,524 97.9 1,152,769 97.9
100–199 employees 3,526 99.1 11,316 99.2 14,842 99.1
200–499 employees 1,797 99.8 5,287 99.7 7,084 99.8
500+ employees 538 100.0 2,401 100.0 2,939 100.0
Total 254,106 21.6 923,528 78.4 1,177,634

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As shown in Table 3, the following four industries — construction; retail trade; professional, scientific and technical services; and other services (except public administration) — account for 538,542 businesses on their own, which represents 45.7 percent of Canadian businesses. The health care and social assistance industry also accounts for a significant number of businesses (112,166), or 9.5 percent of Canadian businesses. More than half (55.3 percent) of Canadian businesses are accounted for in these five of the 20 industries.

More than 99 percent of businesses in the following four industries are small businesses: agriculture, forestry, fishing and hunting; real estate and rental and leasing; professional, scientific and technical services; and other services (except public administration). However, only 82.5 percent of businesses in public administration and 86.6 percent of those in management of companies and enterprises are small businesses.

Table 3: Number of employer businesses by sector and number of employees, December 2017
Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500+ employees)
Total
Number % Number % Number %
Source: Statistics Canada, Table 33-10-0037-01 — Canadian Business Counts, with employees, December 2017.
Goods-Producing Sector 248,245 97.7 5,323 2.1 538 0.2 254,106
Agriculture, forestry, fishing and hunting 47,665 99.4 292 0.6 10 0.0 47,967
Mining, quarrying, and oil and gas extraction 8,844 95.4 338 3.6 88 0.9 9,270
Utilities 1,286 90.1 109 7.6 32 2.2 1,427
Construction 143,451 98.9 1,432 1.0 117 0.1 145,000
Manufacturing 46,999 93.2 3,152 6.2 291 0.6 50,442
Service-Producing Sector 904,524 97.9 16,603 1.8 2,401 0.3 923,528
Wholesale trade 57,234 98.0 1,076 1.8 66 0.1 58,376
Retail trade 140,001 97.9 2,961 2.1 28 0.0 142,990
Transportation and warehousing 66,231 98.2 1,053 1.6 150 0.2 67,434
Information and cultural industries 17,365 96.5 544 3.0 80 0.4 17,989
Finance and insurance 41,080 97.8 766 1.8 145 0.3 41,991
Real estate and rental and leasing 50,366 99.1 389 0.8 49 0.1 50,804
Professional, scientific and technical services 141,551 99.1 1,185 0.8 108 0.1 142,844
Management of companies and enterprises 5,933 86.6 663 9.7 254 3.7 6,850
Administrative and support, waste management and remediation services 50,874 96.6 1,565 3.0 219 0.4 52,658
Educational services 13,065 93.1 534 3.8 434 3.1 14,033
Health care and social assistance 109,543 97.7 2,257 2.0 366 0.3 112,166
Arts, entertainment and recreation 17,462 96.4 571 3.2 76 0.4 18,109
Accommodation and food services 80,003 98.2 1,389 1.7 58 0.1 81,450
Other services (except public administration) 107,108 99.4 568 0.5 32 0.0 107,708
Public administration 6,708 82.5 1,082 13.3 336 4.1 8,126
All Industries 1,152,769 97.9 21,926 1.9 2,939 0.2 1,177,634

1.2 How many businesses appear and disappear each year?

An increase or decrease in the number of businesses is the net result of the appearance or disappearance of businesses over a given period. This is often referred to as "creative destruction." Between 2001 and 2015, the number of businesses increased every year, except in 2013, when more businesses disappeared (96,400) than appeared (95,400),Footnote 4 as illustrated in Figure 1. On average, 95,000 businesses were created every year between 2010 and 2015 and 85,000 disappeared.

Figure 1: Number of businesses with at least one employee, Canada, 2001–2015

Line chart illustrating the number of businesses with at least one employee, Canada, 2001–2015 (the long description is located below the image)
Source: Statistics Canada, Canadian Centre for Data Development and Economic Research (CDER), National Accounts Longitudinal Microdata File.
Description of figure 1
Number of of businesses with at least one employee, Canada, 20012015
Year Number of Businesses with at least One Employee
2001 901,000
2002 907,000
2003 915,000
2004 956,000
2005 974,000
2006 997,000
2007 1,026,000
2008 1,048,000
2009 1,056,000
2010 1,070,000
2011 1,086,000
2012 1,100,000
2013 1,099,000
2014 1,110,000
2015 1,117,000

As illustrated in Figure 2, throughout the 2001−2015 period, the enterprise birth rate was lower in the goods-producing sector than in the service-producing sector. From 2010−2015, the average birth rate in the goods-producing sector was 8.1 percent, compared with 8.9 percent in the service-producing sector. On average, every year between 2010 and 2015, 23,400 businesses appeared and 20,000 businesses disappeared in the goods-producing sector, while in the service-producing sector, 71,600 businesses were created and 65,000 businesses closed.

This variation between birth rates for these two sectors can be explained by the entry cost and different levels of competition. If this is, indeed, the case, higher birth rates would be observed in sectors with a lower entry cost or with a higher level of competition than other sectors.

The enterprise birth rate is inversely related to firm size during market entry. The more individuals employed when a business begins operations, the lower the enterprise birth rate (Figure 3). On average, between 2010 and 2015, the birth rate was 11.0 percent, 3.5 percent, 2.1 percent and 1.5 percent for businesses with 1−4, 5−19, 20−49 and 50−99 employees respectively.

Figure 2: Birth rate for enterprises with one or more employees, Canada, and main sectors, 2001–2015

Multi-Line chart illustrating the birth rate for enterprises with one or more employees, Canada, and main sectors, 2001–2015 (the long description is located below the image)
Source: Statistics Canada, Canadian Centre for Data Development and Economic Research (CDER), National Accounts Longitudinal Microdata File.
Description of figure 2
Birth rate for enterprises with one or more employees, Canada, and main sectors, 2001–2015
Year Canada Goods-producing sector Service-producing sector
2001 9.11% 7.40% 9.70%
2002 8.91% 7.20% 9.50%
2003 9.65% 8.00% 10.20%
2004 10.24% 8.60% 10.80%
2005 10.01% 8.40% 10.60%
2006 9.20% 8.00% 9.60%
2007 8.59% 7.30% 9.00%
2008 9.19% 7.90% 9.70%
2009 8.59% 7.20% 9.10%
2010 8.62% 8.00% 8.80%
2011 8.60% 8.00% 8.80%
2012 8.80% 8.20% 9.00%
2013 8.68% 8.20% 8.90%

Figure 3: Birth rate by initial business size, Canada, 2001–2015

Multi-Line chart illustrating the birth rate by initial business size, Canada, 2001–2015 (the long description is located below the image)
Source: Statistics Canada, Canadian Centre for Data Development and Economic Research, National Accounts Longitudinal Microdata File.
Description of figure 3
Birth rate by initial business size, Canada, 2001–2015
Year 1–4 employees 5–19 employees 20–49 employees 50–99 employees
2001 11.88% 4.07% 2.35% 1.76%
2002 11.63% 3.96% 2.31% 1.76%
2003 12.52% 4.43% 2.69% 1.76%
2004 13.30% 4.44% 2.45% 1.76%
2005 12.94% 4.24% 2.45% 1.76%
2006 11.82% 3.97% 2.41% 1.67%
2007 11.06% 3.47% 2.00% 1.67%
2008 11.76% 3.79% 2.14% 1.67%
2009 10.93% 3.58% 2.18% 1.11%
2010 10.86% 3.77% 2.50% 1.67%
2011 10.89% 3.62% 2.14% 1.67%
2012 11.17% 3.53% 2.11% 1.67%
2013 11.02% 3.55% 2.11% 1.58%
2014 11.07% 3.45% 2.07% 1.58%
2015 10.91% 3.35% 1.72% 1.05%

The vast majority of businesses had 1−4 employees when they began operations. Of the average 95,000 businesses created annually from 2010−2015, approximately 85,270 businesses (or 89.8 percent) had 1−4 employees when they were created. Over the course of this period, 8.7 percent, 1.3 percent and 0.2 percent of new businesses began operations with 5−19, 20−49 and 50−99 employees respectively. Of the average 85,000 annual closures, 90.2 percent, 8.9 percent, 0.8 percent and 0.1 percent were businesses with 1−4, 5−19, 20−49 and 50−99 employees respectively.

1.3 How many new businesses survive the first 10 years?

Businesses in the goods-producing and service-producing sectors showed similar survival rates over the course of the first two years (R + 1 and R + 2) after their creation (R0) (Figure 4). After the third year (R + 3), business survival rates in the goods-producing sector were higher than in the service-producing sector. After five years (R + 5), 66.8 percent of businesses in the goods-producing sector were still operating, compared with 63.3 percent of businesses in the service-producing sector. After 10 years (R + 10), the business survival rate for the goods-producing sector was 47.8 percent, compared with 42.9 percent for the service-producing sector.

Figure 4: Survival rate of businesses with one or more employees, Canada

Multi-Line chart illustrating the survival rate of businesses with one or more employees, Canada (the long description is located below the image)
Source: Statistics Canada, Canadian Centre for Data Development and Economic Research, National Accounts Longitudinal Microdata File.
Description of figure 4
Survival rate of businesses with one or more employees, Canada
Number of years since the company's entry Canada Goods-producing sector Service-producing sector
T 0 100.00% 100.00% 100.00%
T+1 95.00% 94.50% 95.20%
T+2 86.80% 86.80% 86.80%
T+3 78.70% 79.60% 78.40%
T+4 70.80% 72.90% 70.20%
T+5 64.10% 66.80% 63.30%
T+6 58.70% 61.80% 57.80%
T+7 54.60% 58.00% 53.60%
T+8 50.80% 54.50% 49.80%
T+9 47.30% 51.00% 46.20%
T+10 44.00% 47.80% 42.90%

There is a positive correlation between enterprise survival rate and initial business size (Figure 5). Businesses that began operations with a large number of employees had a higher survival rate than businesses that began with a smaller number of employees. After five and ten years (R + 5 and R + 10), 60.5 percent and 42.4 percent of businesses that began operations with 1−4 employees were still active, respectively, compared with 73.2 percent and 55.4 percent of businesses that began operations with a workforce of 50−99 employees respectively.

Figure 5: Survival rate by initial business size

Multi-Line chart illustrating the survival rate by initial business size (the long description is located below the image)
Source: Statistics Canada, Canadian Centre for Data Development and Economic Research, National Accounts Longitudinal Microdata File.
Description of figure 5
Survival rate by initial business size
Number of years since the company's entry 1−4 employees 5−19 employees 20−49 employees 50−99 employees
T 0 100.0% 100.0% 100.0% 100.0%
T+1 92.1% 96.8% 98.1% 98.1%
T+2 81.8% 88.3% 91.1% 92.4%
T+3 73.6% 80.0% 83.4% 85.6%
T+4 66.3% 72.7% 77.1% 78.7%
T+5 60.5% 66.4% 72.5% 73.2%
T+6 55.9% 61.7% 68.6% 70.1%
T+7 51.9% 57.1% 64.1% 66.3%
T+8 48.3% 53.3% 60.6% 62.3%
T+9 45.2% 49.8% 56.3% 59.2%
T+10 42.4% 46.8% 53.0% 55.4%

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2. Employment

2.1 How many people work for SMEs?

In 2017, private sectorFootnote 5 businesses employed approximately 11.9 million individuals in Canada. The majority of private sector employees worked for small businesses, specifically 69.7 percent (8.3 million), compared with 19.9 percent (2.4 million) for medium-sized businesses and 10.4 percent (1.2 million) for large businesses (Figure 6). In total, SMEs employed 89.6 percent (10.7 million) of the private sector workforce, highlighting the important role SMEs play in employing Canadians.

Figure 6: Distribution of private sector employees by business size, 2017

Pie chart illustrating the distribution of private sector employees by business size, 2017 (the long description is located below the image)
Source: Statistics Canada, Labour Force Survey; and ISED calculations.
Description of figure 6
Distribution of private sector employees by business size, 2017
Business size Distribution in percentage
Small businesses (1–99 employees) 69.7%
Medium-size businesses (100–499 employees) 19.9%
Large businesses (500 + employees) 10.4%

SMEs play an essential role in employing Canadians across the country. On the provincial level, the percentage of private sector employment in SMEs is highest in Newfoundland and Labrador and Prince Edward Island at 94.0 percent and 93.9 percent respectively (Table 4). This percentage is lowest in Quebec and Ontario at 87.4 percent and 88.3 percent respectively. Total private sector employment in Ontario and Quebec amounts to 7,426,100 jobs, which represents more than 60 percent of Canadian private sector employment.

Table 4: Total private sector employment by province and business size, 2017
Province Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Percentage of
SME employment
Large businesses
(500+ employees)
Total
(thousands)
Number
(thousands)
% Number
(thousands)
% Number
(thousands)
%
Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Newfoundland and Labrador 107.7 76.3 25.0 17.7 94.0 8.5 6.0 141.2
Prince Edward Island 34.4 78.5 6.8 15.4 93.9 2.7 6.1 43.8
Nova Scotia 206.5 74.7 50.7 18.3 93.1 19.2 6.9 276.4
New Brunswick 164.5 72.9 43.8 19.4 92.2 17.5 7.8 225.8
Quebec 1,822.1 66.6 569.7 20.8 87.4 343.8 12.6 2,735.5
Ontario 3,145.1 67.1 995.2 21.2 88.3 550.2 11.7 4,690.6
Manitoba 287.4 72.6 74.8 18.9 91.5 33.5 8.5 395.8
Saskatchewan 250.8 76.9 54.7 16.8 93.6 20.8 6.4 326.3
Alberta 1,087.1 74.0 253.8 17.3 91.3 128.3 8.7 1,469.2
British Columbia 1,190.2 74.8 297.1 18.7 93.5 103.8 6.5 1,591.0
Canada 8,295.8 69.7 2,371.4 19.9 89.7 1,228.3 10.4 11,895.5

Distribution of employment by business size varies across industries. As shown in Table 5, SMEs account for over 90.0 percent of employment in six industries: agriculture (99.3 percent); other services (except public administration) (99.0 percent); accommodation and food services (98.1 percent); wholesale and retail trade (95.9 percent); construction (95.4 percent); and business, building and other support services (93.1 percent). In all industries, at least 70.0 percent of the workforce is employed by SMEs.

Table 5: Total private sector employment by industrial sector and business size, 2017
Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Percentage of SME employment Large businesses
(500+ employees)
Total
(thousands)
Number
(thousands)
% Number
(thousands)
% Number
(thousands)
%
Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Goods-Producing Sector 1,891.4 62.1 783.7 25.7 87.9 369.6 12.1 3,044.8
Agriculture 101.3 90.9 9.4 8.4 99.3 0.8 0.7 111.5
Forestry, fishing, mining, quarrying, and oil and gas extraction 142.1 50.7 66.9 23.9 74.5 71.5 25.5 280.6
Utilities 6.8 44.9 3.8 25.4 70.3 4.5 29.7 15.1
Construction 821.3 82.1 133.4 13.3 95.4 45.6 4.6 1,000.3
Manufacturing 819.9 50.1 570.2 34.8 84.9 247.2 15.1 1,637.3
Service-Producing Sector 6,404.4 72.4 1,587.7 17.9 90.3 858.7 9.7 8,850.7
Wholesale and retail trade 1,949.8 77.3 469.9 18.6 95.9 102.5 4.1 2,522.2
Transportation and warehousing 350.8 57.8 160.8 26.5 84.3 95.5 15.7 607.1
Finance, insurance, real estate and leasing 551.7 61.5 182.8 20.4 81.8 163.1 18.2 897.6
Professional, scientific and technical services 670.5 68.3 211.1 21.5 89.8 99.9 10.2 981.5
Business, building and other support services 416.1 73.8 109.1 19.3 93.1 38.8 6.9 564.0
Educational services 65.1 61.6 17.8 16.8 78.5 22.7 21.5 105.6
Health care and social assistance 537.1 55.7 194.7 20.2 75.9 232.4 24.1 964.2
Information, culture and recreation 344.8 64.1 115.5 21.5 85.6 77.4 14.4 537.6
Accommodation and food services 1,007.0 90.5 84.9 7.6 98.1 20.7 1.9 1,112.5
Other services (except public administration) 511.6 91.6 41.1 7.4 99.0 5.8 1.0 558.5
Total 8,295.8 69.7 2,371.4 19.9 89.7 1,228.3 10.3 11,895.5

The total number of employees working for small businesses in 2017 was, in order of magnitude, wholesale and retail trade (1.95 million); accommodation and food services (1.01 million); construction (0.82 million) and manufacturing (0.82 million). These industries alone accounted for 55.4 percent of all jobs in small businesses in Canada. Overall, industries in the goods-producing sector accounted for 25.6 percent of total employment and 22.8 percent of employment in small businesses. Agriculture has the highest share of employees working in small businesses (1−99 employees), specifically 101,300 out of the total of 111,500 employees in the industry, or approximately 91 percent.

2.2 How much did employment grow between 2013 and 2017?

Between 2013 and 2017, total net employment change in the private sector was 639,200, which corresponds to an average annual growth rate of 1.1 percent (Table 6). The net employment change among small businesses was 431,600, compared with 113,600 among medium-sized businesses, or an average annual growth rate of 1.1 percent and 1.0 percent respectively. Consequently, the contribution to net employment change by small businesses was 67.5 percent and 17.8 percent by medium-sized businesses. SMEs were responsible for 85.3 percent of net employment change over the last five years (Figure 7).

Table 6: Average annual growth rate and contribution to net employment change in the private sector by province and business size, 2013−2017
Province Small businesses
(1−99 employees)
Medium-sized businesses
(100−499 employees)
Large businesses
(500+ employees)
Total
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
%

Sources: Statistics Canada, Labour Force Survey; and ISED calculations.

Newfoundland and Labrador −0.2 −1.1 26.8 −0.7 −0.9 20.5 −4.5 −2.2 52.6 −0.6 −4.2 100
Prince Edward Island 0.8 1.4 47.4 4.1 1.2 42.7 2.3 0.3 9.8 1.4 2.9 100
Nova Scotia −1.0 −10.9 88.4 −1.4 −3.7 29.5 2.5 2.2 −17.9 −0.9 −12.4 100
New Brunswick 0.1 0.9 −0.6 −1.4 0.8 0.7 0.0 0.2 100
Quebec 0.8 70.9 55.8 1.3 36.5 28.7 1.2 19.8 15.5 1.0 127.2 100
Ontario 1.5 223.2 70.3 0.9 44.3 14.0 1.9 50.1 15.8 1.4 317.6 100
Manitoba 0.9 12.4 75.7 0.5 1.9 11.5 1.3 2.1 12.8 0.8 16.4 100
Saskatchewan 1.0 12.6 80.1 1.1 2.8 17.9 0.3 0.3 2.0 1.0 15.7 100
Alberta 0.4 19.1 132.5 −0.9 −11.4 −79.2 1.1 6.7 46.7 0.2 14.4 100
British Columbia 1.8 103.5 64.0 3.3 44.3 27.4 2.9 13.8 8.6 2.2 161.6 100
Canada 1.1 431.8 67.6 1.0 113.6 17.8 1.6 93.8 14.7 1.1 639.2 100

Over the last five years, private sector employment has increased in all provinces, with the exception of Newfoundland and Labrador and Nova Scotia. The highest contribution to net employment change among SMEs was observed in Saskatchewan, where 98.0 percent of net employment change was attributable to SMEs, followed by British Columbia at 91.4 percent. In Ontario, where net employment change was highest (317,600), 84.3 percent of this change was attributable to SMEs.

Over the 2013−2017 period, all net employment change was attributable to businesses in the service-producing sector; employment in the goods-producing sector did not increase (Table 7).

Figure 7: Contribution to net employment change of private sector businesses by business size, 2001–2015

Pie chart illustrating the contribution to net employment change of private sector businesses by business size, 2001–2015 (the long description is located below the image)
Source: Statistics Canada, Labour Force Survey; and ISED calculations.
Description of figure 7
Contribution to Net Employment Change of Private Sector Businesses by Business Size, 2013−2017
Business size Contribution in percentage
Small businesses (1–99 employees) 67.5%
Medium-size businesses (100–499 employees) 17.8%
Large businesses (500 + employees) 14.7%
Table 7: average annual growth rate and contribution to net employment change by industrial sector and business size, 2013−2017
Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500+ employees)
Total
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)
AAGRFootnote *
(%)
NECFootnote **
(000)
CNECFootnote ***
(%)

Sources: Statistics Canada, Labour Force Survey; and ISED calculations.

Goods-Producing Sector 0.2 17.7 −0.1 −2.7 −0.8 −15.0 0.0 0.0 100
Agriculture −1.1 −5.9 82.5 −2.1 −1.0 14.7 −4.3 −0.2 2.7 −1.2 −7.1 100
Forestry, fishing, mining, quarrying, and oil and gas extraction −2.7 −20.6 61.5 −3.4 −12.8 38.2 0.0 −0.1 0.4 −2.2 −33.5 100
Utilities −6.4 −2.7 35.7 −9.8 −2.6 34.6 −7.7 −2.2 29.7 −7.7 −7.5 100
Construction 1.7 66.1 81.6 1.9 12.2 15.0 1.3 2.8 3.4 1.7 81.0 100
Manufacturing −0.5 −19.3 58.5 0.1 1.6 −4.9 −1.2 −15.3 46.4 −0.4 −32.9 100
Service-Producing Sector 1.3 414.1 64.8 1.5 116.3 18.2 2.7 108.8 17.0 1.5 639.2 100
Wholesale and retail trade 1.0 94.2 60.8 1.4 30.7 19.8 7.1 29.9 19.3 1.3 154.8 100
Transportation and warehousing 1.6 26.4 45.1 2.5 18.7 32.0 3.1 13.4 22.9 2.0 58.5 100
Finance, insurance, real estate and leasing 1.5 39.6 45.1 3.7 30.3 34.5 2.3 17.9 20.4 2.1 87.7 100
Professional, scientific and technical services 3.7 110.6 73.9 1.6 16.4 11.0 5.3 22.6 15.1 3.4 149.6 100
Business, building and other support services 1.1 22.0 49.5 4.0 19.5 43.8 1.6 3.0 6.7 1.7 44.5 100
Educational services 2.3 6.9 66.0 1.3 1.1 10.9 2.3 2.4 23.1 2.1 10.5 100
Health care and social assistance 2.0 51.6 58.8 0.6 6.0 6.9 2.8 30.2 34.4 1.9 87.9 100
Information, culture and recreation 1.0 16.5 160.0 0.3 1.7 16.7 −1.9 −7.9 −76.7 0.4 10.3 100
Accommodation and food services 1.0 47.4 115.0 −1.8 −8.1 −19.6 1.9 1.9 4.6 0.8 41.2 100
Other services (except public administration) 0.0 −1.1 18.8 0.0 0.0 0.9 −11.0 −4.6 80.4 −0.2 −5.7 100
Total 1.1 431.8 67.6 1.0 113.6 17.8 1.6 93.8 14.7 1.1 639.2 100

The most significant net employment changes observed in the service-producing sector were in wholesale and retail trade (154,800) and professional, scientific and technical services (149,600), corresponding to an average annual growth rate of 1.3 percent and 3.4 percent respectively. The contribution to net employment change by SMEs in these two industries was 84.9 percent for professional, scientific and technical services and 80.6 percent for wholesale and retail trade. In the service-producing sector, the only industry that experienced a decrease in net employment change between 2013 and 2017 was other services (except public administration) (−5,700).

A positive net employment change was observed in the construction industry (81,000 jobs, or an average annual growth rate of 1.7 percent), which was nullified by negative net employment changes observed in the other four industries making up the goods-producing sector. SMEs in the construction industry represented 96.6 percent of the contribution to net employment change in this industry over the last five years.


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3.0 Growth

3.1 What is the share of high-growth firms?

Firms that achieve high growth in a short period of time tend to make a large contribution in terms of employment and wealth creation. Based upon a recent study,Footnote 6 high-growth firmsFootnote 7 contributed to 41 percent of the total net employment change between 2009 and 2012. Although policy-makers tend to associate high-growth firms with innovative high-tech firms, the reality, as discussed below, is that these firms are found across all industrial sectors.

Figure 8 presents percentages of high-growth firms across different industries, between 2012 and 2015, based upon revenue and employment. As shown, there are high-growth firms in all industries. In the goods-producing sector, the largest share of high-growth firms, based upon revenue, is found in mining, quarrying, and oil and gas extraction (16.2 percent), construction (11.1 percent) and manufacturing (9.1 percent). In the service-producing sector, industries with the highest share of high-growth firms are professional, scientific and technical services (11.9 percent) and information and cultural industries (10.5 percent). Overall, the share of high-growth firms based upon revenue is more than twice the share based upon employment (7.3 percent versus 3.2 percent respectively).

Gazelles are high-growth firms that have been active for four or five years. Their growth can be measured by the number of employees or by revenue. Figure 9 shows gazelles as a share of all businesses with at least 10 employees. Between 2011 and 2015, the share of gazelles based upon employment was 0.6 percent. This is approximately 2.8 times less than the share of gazelles based upon revenue, which was 1.6 percent, on average, during this period.

Figure 8: Percentage of high-growth firms by industry, based upon revenue and employment growth, 2012−2015

Bar chart illustrating the percentage of high-growth firms by industry, based upon revenue and employment growth, 2012−2015 (the long description is located below the image)
Source: Statistics Canada, Entrepreneurship Indicators Database.
Description of figure 8
Percentage of high-growth firms by industry, based upon revenue and employment growth, 2012−2015
Industy sector Employment Revenue
Total 3.2% 7.3%
Mining, quarrying and oil and gas extraction 5.4% 16.2%
Professional, scientific and technical services 4.0% 11.9%
Construction 4.7% 11.1%
Information and cultural industries 5.9% 10.5%
Administrative and support, waste management and remediation services 4.9% 9.9%
Manufacturing 3.3% 9.1%
Agriculture, forestry, fishing and hunting 5.0% 8.5%
Transportation and warehousing 4.6% 8.5%
Wholesale trade 3.3% 7.8%
Management of companies and enterprises 2.1% 7.8%
Finance and insurance 3.2% 7.7%
Educational services 3.3% 6.7%
Real estate and rental and leasing 3.3% 6.5%
Utilities 5.6% 5.6%
Other services (except 91 Public administration) 2.3% 5.5%
Retail trade 2.5% 5.1%
Health care and social assistance 2.2% 5.1%
Arts, entertainment and recreation 2.7% 4.8%
Accommodation and food services 1.8% 4.5%

Figure 9: Gazelles as a share of all enterprises with at least 10 employees, based upon employment and revenue growth, 2011−2015

Bar chart illustrating the Gazelles as a share of all enterprises with at least 10 employees, based upon employment and revenue growth, 2011−2015 (the long description is located below the image)
Source: Statistics Canada, Entrepreneurship Indicators Database.
Description of figure 9
Gazelles as a share of all enterprises with at least 10 employees, based upon employment and revenue growth, 2011−2015
Year Employment Revenue
2011 0.6% 1.7%
2012 0.6% 1.5%
2013 0.6% 1.6%
2014 0.6% 1.6%
2015 0.6% 1.7%

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4. Export of goods

4.1 Which provinces have the highest concentrations of exporters?

Exporting is vital to Canada's economy. It is a driver of economic growth and is strongly correlated with real gross domestic product growth. Furthermore, exporting can provide a strategically important means of growing a firm by expanding its market beyond the confines of Canada's relatively small domestic market.

Exporters are found in all provinces. In 2017, out of the 48,454 establishments that exported goods, 42.8 percent were operating in Ontario (Table 8). Ontario had the highest concentration of exporters at 48.4 exporters per thousand establishments, followed by Manitoba and Quebec at 43.9 and 43.1 exporters per thousand establishments respectively. The lowest concentration of exporters was found in the territories and Newfoundland and Labrador at 14.8 and 17.2 exporters per thousand establishments respectively.

In Canada, the average value of exports per establishment was $10 million in 2017. This includes establishments located in the territories, which had the highest average value of exports, at slightly more than $30 million per establishment, followed by Newfoundland and Labrador and Alberta at $20.6 million and $20.3 million per establishment respectively. This can probably be explained by the fact that the territories and these two provinces specialize in the production of natural resources.

Table 8: Provincial exports by number of establishments and value of goods exported, 2017
Number of exporters Distribution (%) Number of exporters per 1,000 establishments Value of exports
($ billions)
Distribution (%) Average value of exports by establishment
($ millions)
Source: Statistics Canada, Table 12-10-0098-01 — Trade in goods by exporter characteristics, by industry of establishment (x 1,000).
Canada 48,454 41.1 483.6 10.0
Newfoundland and Labrador 292 0.6 17.2 6.0 1.2 20.6
Prince Edward Island 226 0.5 37.2 1.4 0.3 6.2
Nova Scotia 970 2.0 32.9 4.9 1.0 5.0
New Brunswick 775 1.6 30.6 12.5 2.6 16.2
Quebec 10,422 21.5 43.1 78.6 16.2 7.5
Ontario 20,715 42.8 48.4 196.6 40.7 9.5
Manitoba 1,718 3.5 43.9 17.8 3.7 10.3
Saskatchewan 1,434 3.0 35.2 17.1 3.5 11.9
Alberta 4,928 10.2 30.1 100.2 20.7 20.3
British Columbia 6,913 14.3 37.8 46.8 9.7 6.8
Territories 61 0.1 14.8 1.8 0.4 30.3

4.2 How do SMEs contribute to Canada's exports?

In 2017, Canada's exports of goods increased to $483.6 billion, of which 41.9 percent was attributable to SMEs (Figure 10). More than 48,000 Canadian establishments exported goods, the vast majority of which were SMEs (97.4 percent).

Figure 10: Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2017

Bar chart illustrating the Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2017 (the long description is located below the image)

Sources: Statistics Canada, Table 12-10-0094-01 — Trade in goods by exporter characteristics, by enterprise employment size and industry; and ISED calculations.

Description of figure 10
Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2017
Indicator Small businesses (1–99 employees) Medium-size businesses (100–499 employees) Large businesses (500 + employees)
Value 20.5% 21.4% 58.1%
Number 89.6% 7.8% 2.6%

Even if virtually all Canadian industrial sectors export goods, four in particular account for over 90 percent of the total value of goods exported in 2017 (Figure 11). Manufacturing accounted for almost 58 percent of the total value of goods exported in 2017, followed by wholesale trade (13.3 percent), management of companies and enterprises (12.9 percent) and mining, quarrying, and oil and gas extraction (8.7 percent).

The contribution of SMEs to exports of goods varies by industrial sector (Figure 12). In 2017, the contribution of SMEs to the total value of goods exported by "other industries" was 72.0 percent, 68.4 percent of which came from wholesale trade. At the other end of the scale, the contribution of SMEs to the value of exports of goods was only 7.1 percent in management of companies and enterprises and 38.8 percent in manufacturing.

Figure 11: Main industries involved in the export of goods by value of exports, Canada, 2017

Bar chart illustrating the Main industries involved in the export of goods by value of exports, Canada, 2017 (the long description is located below the image)

Sources: Statistics Canada, Table 12-10-0094-01 — Trade in goods by exporter characteristics, by enterprise employment size and industry; and ISED calculations.

Description of figure 11
Main industries involved in the export of goods by value of exports, Canada, 2017
Industry Sector Percentage distribution by value of exports
Manufacturing 57.7%
Wholesale trade 13.3%
Management of companies and enterprises 12.9%
Mining, quarrying and oil and gas extraction 8.7%
Other industries 7.4%

Figure 12: Contribution of SMEs to the total value of exports by industry, Canada, 2017

Bar chart illustrating the Contribution of SMEs to the total value of exports by industry, Canada, 2017 (the long description is located below the image)

Source: Statistics Canada, Table 12-10-0094-01 — Trade in goods by exporter characteristics, by enterprise employment size and industry.

Description of figure 12
Contribution of SMEs to the total value of exports by industry, Canada, 2017
Industry Sector Small businesses (1–99 employees) Medium-size businesses (100–499 employees) Large businesses (500 + employees)
Manufacturing 12.4% 26.4% 61.2%
Wholesale trade 55.1% 13.3% 31.6%
Management of companies and enterprises 3.6% 3.6% 92.9%
Mining, quarrying and oil and gas extraction 16.6% 31.3% 52.2%
Other industries 55.9% 16.2% 28.0%

4.3 What are Canada's main export destinations?

Between 2010 and 2017, the value of goods exported increased to an average annual growth rate of 4.3 percent, totaling almost $484 billion (Table 9). This 4.3 percent annual growth rate is the same as that observed for exports to the United States, the main destination for exported Canadian goods. Over the course of this period, the contribution of Canadian SMEs to exports of goods to the United States increased from 36.7 percent to 41.4 percent, while exports of goods to the United States by large businesses decreased from 63.3 percent to 58.6 percent. In other words, SMEs concentrated on exporting to the United States between 2010 and 2017.

Unselect
Table 9: Twenty main destinations for exports of Canadian goods, 2010 and 2017
2010 2017
Rank Value
($ billions)
Contribution (%) Rank Value
($ billions)
AAGR
(%)
Contribution (%)
SMEs Large businesses SMEs Large businesses
Source: Statistics Canada, Table 12-10-0095-01 — Trade in goods by exporter characteristics, by enterprise employment size and country of destination.
United States 1 268.4 36.7 63.3 1 361.4 4.3 41.4 58.6
China 3 12.3 41.4 58.6 2 22.0 8.7 42.8 57.2
United Kingdom 2 15.4 59.6 40.4 3 17.0 1.4 74.4 25.6
Japan 4 8.9 37.5 62.5 4 11.5 3.7 34.8 65.2
Mexico 5 4.2 32.6 67.4 5 7.4 8.4 31.2 68.8
South Korea 7 3.5 37.4 62.6 6 5.0 5.2 37.8 62.2
India 13 1.9 65.9 34.1 7 4.0 11.2 34.7 65.3
Germany 6 3.5 30.2 69.8 8 3.5 0.0 36.8 63.2
Belgium 11 2.1 41.0 59.0 9 3.3 6.0 26.1 73.9
France 12 2.0 31.3 68.7 10 3.1 6.5 35.6 64.4
The Netherlands 8 2.9 42.8 57.2 11 2.9 0.0 33.3 66.7
Italy 14 1.7 47.7 52.3 12 2.2 3.8 28.4 71.6
Norway 9 2.5 9.0 90.1 13 1.9 −3.8 9.6 90.4
Switzerland 17 1.5 14.8 85.2 14 1.9 3.4 12.3 87.7
Hong Kong 15 1.6 55.1 44.9 15 1.9 2.5 55.0 45.0
Australia 16 1.5 45.9 54.1 16 1.7 1.8 53.4 46.6
Indonesia 19 1.0 82.7 17.3 17 1.7 7.9 52.2 47.8
Taiwan 18 1.2 32.7 67.3 18 1.6 4.2 32.0 68.0
Spain 22 0.9 25.7 74.3 19 1.6 8.6 30.1 69.9
Brazil 10 2.4 39.3 60.7 20 1.5 −6.5 54.8 45.2
Rest of the world 20.4 53.9 46.1 26.6 3.9 43.2 56.8
Total 359.9 39.0 61.0 483.6 4.3 41.9 58.1

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5. Gross domestic product

5.1 How do SMEs contribute to Canada's gross domestic product?

Gross domestic product is a key measure of economic production that can be used to compare any two industries' value added, i.e., the value that an industry, through its activities, adds to its inputs. The main advantage of the GDP concept is that it avoids double counting; hence, it is considered superior in gauging economic performance over, for example, revenue, business counts or even employment. Statistics Canada recently produced estimates of GDP generated by the private sector by business size for 2002−2014.

Based upon estimates, the contribution to GDP by business size did not vary significantly throughout the period 2002−2014 (Figure 13). On average, from 2010−2014, the contribution of small businesses to GDP was 38.4 percent, the contribution of medium-sized businesses was 11.8 percent and the contribution of large businesses was 49.8 percent. In other words, SMEs accounted for slightly more than 50.0 percent of the value added to the country's output.

SMEs' contribution to GDP varied more according to industrial sector (Table 10). The average contribution of SMEs to GDP was 43.6 percent in the goods-producing sector, compared with 74.5 percent in the service-producing sector.

For the goods-producing sector, the contribution of SMEs to GDP was 95.7 percent in agriculture and 81.5 percent in construction. For the other three industries in the goods-producing sector, the contribution of SMEs to GDP was less than 50.0 percent.

For the service-producing sector, the greatest contribution of SMEs to GDP was observed in the following industries: health care and social assistance (90.2 percent), educational services (89.5 percent) and other services (except public administration) (89.0 percent). The industries in which SMEs contributed least to GDP were information, culture and recreation (18.4 percent); finance, insurance, real estate and leasing (39.6 percent) and transportation and warehousing (44.4 percent).

Figure 13: Contribution to GDP by business size, Canada, 2002−2014

Line chart illustrating the contribution to GDP by business size, Canada, 2002−2014 (the long description is located below the image)

Source: Statistics Canada.

Description of figure 13
Contribution to GDP by business size, Canada, 2002−2014
Year Large businesses (500 + employees) Medium-size businesses (100–499 employees) Small businesses (1–99 employees)
2002 46.2% 14.5% 39.3%
2003 49.3% 12.8% 37.9%
2004 49.6% 12.7% 37.7%
2005 50.7% 12.3% 37.0%
2006 50.5% 12.3% 37.2%
2007 49.0% 12.3% 38.6%
2008 48.9% 12.1% 39.0%
2009 50.0% 11.9% 38.2%
2010 49.5% 11.6% 38.9%
2011 51.7% 11.9% 36.3%
2012 49.9% 12.2% 37.9%
2013 50.4% 12.4% 37.3%
2014 47.5% 11.0% 41.5%
Table 10: Contribution to GDP by business size and industrial sector, average from 2010−2014
Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
SMEs Large businesses
(500+ employees)
Source: Statistics Canada.
Goods-Producing Sector 30.9 12.7 43.6 56.4
Agriculture 90.6 5.1 95.7 4.4
Forestry, fishing, mining, quarrying, and oil and gas extraction 5.5 6.3 11.8 88.2
Utilities 4.2 3.0 7.2 92.7
Construction 67.7 13.8 81.5 18.5
Manufacturing 25.0 19.6 44.6 55.4
Service-Producing Sector 63.3 11.2 74.5 25.5
Wholesale trade 38.2 17.9 56.1 43.9
Retail trade 47.7 10.7 58.4 41.6
Transportation and warehousing 33.1 11.3 44.4 55.6
Finance, insurance, real estate and leasing 32.2 7.4 39.6 60.4
Professional, scientific and technical services 56.0 13.5 69.5 30.5
Business, building and other support services 45.1 15.4 60.4 39.6
Educational services 75.9 13.6 89.5 10.5
Health care and social assistance 84.2 6.0 90.2 9.8
Information, culture and recreation 10.6 7.8 18.4 81.6
Accommodation and food services 63.5 15.9 79.4 20.6
Other services (except public administration) 83.9 5.1 89.0 11.0
Total 38.4 11.8 50.2 49.8
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