Key Small Business Statistics — 2020

Table of contents

• Foreword
• Definition
• Highlights

1. Number of businesses
   • 1.1 How many SMEs are there in Canada?
   • 1.2 How many businesses appear and disappear each year?
   • 1.3 What proportion of new businesses survive the first sixteen years?
2. Employment
   • 2.1 How many people were employed in Canada in 2019?
   • 2.2 What is the distribution of employment across the private sector?
   • 2.3 How much did employment grow between 2014 and 2019?
3. Growth
   • 3.1 What is the proportion of high-growth firms?
4. Export of goods
   • 4.1 Which provinces have the highest concentrations of exporters?
   • 4.2 How do SMEs contribute to Canada's exports?
   • 4.3 What are Canada's main export destinations?
5. Gross domestic product
   • 5.1 How do SMEs contribute to Canada's gross domestic product?

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List of figures

• Figure 1: Number of businesses with at least one employee, Canada, 2001–2017
• Figure 2: Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017
• Figure 3: Birth rate by initial business size, Canada, 2001–2017
• Figure 4: Survival rate of businesses with one or more employees, goods producing sector and services-producing sector, Canada
• Figure 5: Survival rate by initial business size, Canada
• Figure 6: Distribution of private sector employees by business size, 2019
• Figure 7: Contribution to net employment change of private sector businesses by business size, 2014–2019
• Figure 8: Percentage of high-growth firms by industry, based upon revenue and employment growth, 2014–2017
• Figure 9: Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2019
• Figure 10: Main industries involved in the export of goods by value of exports, Canada, 2019
• Figure 11: Contribution of SMEs to the total value of exports by industry, Canada, 2019
• Figure 12: Contribution to GDP by business size, Canada, 2003–2016

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List of tables

• Table 1: Total number of employer businesses by business size and number of SMEs per 1,000 provincial population, December 2019
• Table 2: Number of employer businesses by sector and business size (number of employees), December 2019
• Table 3: Number of employer businesses by sector and number of employees, December 2019
• Table 4: Number of individuals employed in the private and public sectors, by business size, 2019
• Table 5: Total private sector employment by province and business size, 2019
• Table 6: Total private sector employment by industrial sector and business size, 2019
• Table 7: Average annual growth rate and contribution to net employment change in the private sector by province and business size, 2014–2019
• Table 8: Average annual growth rate and contribution to net employment change by industrial sector and business size, 2014–2019
• Table 9: Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2019
• Table 10: Twenty main destinations for exports of Canadian goods, 2014 and 2019
• Table 11: Twenty main destinations for exports of Canadian goods, distribution of the value of exports by destination for each category of business size, Canada, 2014 and 2019
• Table 12: Contribution to GDP by business size and industrial sector, average from 2012–2016

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Foreword

Key Small Business Statistics provides statistical data^{Footnote 1} on the business sector in Canada, focusing on small and medium-sized enterprises (SMEs). The current edition contains data on the following questions:

• How many SMEs are there in Canada?
• How many businesses appear and disappear each year?
• What proportion of new businesses survive?
• How many people were employed in Canada in 2019?
• What is the distribution of employment across the private sector?
• How much did employment grow between 2014 and 2019?
• What is the proportion of high-growth firms?
• Which provinces have the highest concentrations of exporters?
• How do SMEs contribute to Canada's exports?
• What are Canada's main export destinations?
• How do SMEs contribute to Canada's gross domestic product?

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Definition

Innovation, Science and Economic Development Canada (ISED) defines a business based upon the number of paid employees.^{Footnote 2}

Since self-employed and "indeterminate" businesses are not considered to have paid employees, they are generally not included in this publication. This publication defines an SME as a business establishment with 1 to 499 paid employees.

More specifically:

• a small business has 1 to 99 paid employees;^{Footnote 3}
• a medium-sized business has 100 to 499 paid employees; and
• a large business has 500 or more paid employees.

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1. Number of businesses

1.1 How many SMEs are there in Canada?

As of December 2019, there were 1.23 million employer businesses in Canada (Table 1). Of these, 1.2 million (97.9 percent) were small businesses, 22,905 (1.9 percent) were medium-sized businesses and 2,978 (0.2 percent) were large businesses.

More than half of Canada's small employer businesses are concentrated in Ontario and Quebec (440,306 and 249,685, respectively). Western Canada has a large number of small businesses, led by British Columbia, which had 187,252 small businesses as of December 2019. In the Atlantic region, Nova Scotia has the most small businesses at 29,876.

The province with the most businesses per thousand individuals aged 18 and over is Prince Edward Island (50.8), followed by Alberta (48.3). In contrast, Quebec has the smallest number of businesses per thousand individuals aged 18 and over (37.0), followed by Nova Scotia (37.8), Manitoba (38.0) and Ontario (38.2).

Table 1: Total number of employer businesses by business size and number of SMEs per 1,000 provincial population, December 2019

	Small businesses (1–99 employees)		Medium-sized businesses (100–499 employees)		Large businesses (500+ employees)			Number of businesses per 1,000 individuals (18+ years)
Province/Territory	Number	%	Number	%	Number	%	Total
Sources: Statistics Canada, Table 33-10-0222-01 Canadian Business Counts, with employees, December 2019, Table 17-10-0005-01 — Population estimates on July 1st, by age and sex; and ISED calculations.
Newfoundland and Labrador	16,633	98.1	294	1.7	25	0.1	16,952	39.0
Prince Edward Island	6,348	98.2	107	1.7	8	0.1	6,463	50.8
Nova Scotia	29,876	98.0	542	1.8	68	0.2	30,486	37.8
New Brunswick	25,063	98.0	459	1.8	51	0.2	25,573	39.9
Quebec	249,685	97.8	4,960	1.9	702	0.3	255,347	37.0
Ontario	440,306	97.7	9,092	2.0	1,238	0.3	450,636	38.2
Manitoba	39,370	97.6	836	2.1	122	0.3	40,328	38.0
Saskatchewan	41,008	98.3	647	1.6	77	0.2	41,732	46.3
Alberta	160,920	98.0	2,936	1.8	332	0.2	164,188	48.3
British Columbia	187,252	98.3	2,947	1.5	347	0.2	190,546	45.3
Territories	4,110	97.8	85	2.0	8	0.2	4,203	46.0
Canada	1,200,571	97.9	22,905	1.9	2,978	0.2	1,226,454	40.4

Of the 1,226,454 employer businesses in Canada, 21.3 percent are in the goods-producing sector and 78.7 percent are in the services-producing sector (Table 2). Micro-enterprises (1–4 employees) make up 54.9 percent of Canadian businesses. By adding those businesses with 5–9 employees, this number increases to 73.6 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 services-producing sectors.

Table 2: Number of employer businesses by sector and business size (number of employees), December 2019

	Goods		Services		Total
Number of employees	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 services-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. Sources: Statistics Canada, Table 33-10-0222-01 Canadian Business Counts, with employees, December 2019
1–4 employees	150,791	57.7	522,343	54.1	673,134	54.9
5–9 employees	49,600	76.7	180,018	72.8	229,618	73.6
10–19 employees	27,970	87.4	127,968	86.0	155,938	86.3
20–49 employees	19,714	94.9	86,502	95.0	106,216	95.0
50–99 employees	7,185	97.7	28,480	97.9	35,665	97.9
Small businesses 1–99 employees	255,260	97.7	945,311	97.9	1,200,571	97.9
100–199 employees	3,658	99.1	11,949	99.2	15,607	99.2
200–499 employees	1,872	99.8	5,426	99.7	7,298	99.8
500 employees or more	525	100.0	2,453	100.0	2,978	100.0
Total	261,315	21.3	965,139	78.7	1,226,454

The following four industries — construction; retail trade; professional, scientific and technical services; and other services (except public administration) — account for 557,327 businesses on their own, which represents 45.4 percent of Canadian businesses (Table 3). The health care and social assistance industry also accounts for a significant number of businesses: 121,953 or 9.9 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 85.1 percent of businesses in public administration and 85.7 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 2019

	Small businesses (1–99 employees)		Medium-sized businesses (100–499 employees)		Large businesses (500+ employees)		Total
	Number	%	Number	%	Number	%	Number
Sources: Statistics Canada, Table 33-10-0222-01 Canadian Business Counts, with employees, December 2019.
Goods-Producing Sector	255,260	97.7	5,530	2.1	525	0.2	261,315
Agriculture, forestry, fishing and hunting	49,253	99.4	305	0.6	12	0.0	49,570
Mining, quarrying, and oil and gas extraction	8,326	95.3	323	3.7	84	1.0	8,733
Utilities	1,301	89.9	104	7.2	42	2.9	1,447
Construction	148,359	99.0	1,476	1.0	77	0.1	149,912
Manufacturing	48,021	93.0	3,322	6.4	310	0.6	51,653
Service-Producing Sector	945,311	97.9	17,375	1.8	2,453	0.3	965,139
Wholesale trade	56,107	97.8	1,170	2.0	75	0.1	57,352
Retail trade	141,783	97.7	3,301	2.3	44	0.0	145,128
Transportation and warehousing	70,897	98.3	1,087	1.5	166	0.2	72,150
Information and cultural industries	17,971	96.6	552	3.0	76	0.4	18,599
Finance and insurance	41,720	98.2	647	1.5	129	0.3	42,496
Real estate and rental and leasing	57,278	99.4	322	0.6	23	0.0	57,623
Professional, scientific and technical services	147,694	99.1	1,290	0.9	124	0.1	149,108
Management of companies and enterprises	5,582	85.7	679	10.4	252	3.9	6,513
Administrative and support, waste management and remediation services	52,571	96.6	1,584	2.9	254	0.5	54,409
Educational services	14,036	93.1	581	3.9	464	3.1	15,081
Health care and social assistance	118,964	97.5	2,556	2.1	433	0.4	121,953
Arts, entertainment and recreation	18,520	96.4	592	3.1	94	0.5	19,206
Accommodation and food services	82,762	98.2	1,469	1.7	56	0.1	84,287
Other services (except public administration)	112,571	99.5	581	0.5	27	0.0	113,179
Public administration	6,855	85.1	964	12.0	236	2.9	8,055
All Industries	1,200,571	97.9	22,905	1.9	2,978	0.2	1,226,454

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 2017, the number of businesses increased every year, except for two: in 2013 and in 2016, when more businesses disappeared (97,203 and 95,613) than were created (95,378 and 94,900),^{Footnote 5} as illustrated in Figure 1.^{Footnote 6} Over the last five years (from 2013 to 2017), on average, 96,580 businesses were created every year and 90,600 disappeared.

As illustrated in Figure 2, throughout the 2001–2017 period, the business birth rate was lower in the goods-producing sector than in the services-producing sector. It is noteworthy that the rate of business births in the goods-producing sector has declined over the 2014 to 2016 period, from 8.2 percent in 2014 to 7.8 percent in 2016 but has increased in the last observed year (2017) to 8.1 percent.

Over the last five years, the average birth rate in the goods-producing sector was 8.1 percent, compared with 9.0 percent in the services-producing sector. On average, every year between 2013 and 2017, 23,650 businesses were created and 21,760 businesses disappeared in the goods-producing sector, while in the services-producing sector, 72,920 businesses were created and 68,820 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 2013 and 2017, the birth rate was 11.0 percent, 3.6 percent, and 1.7 percent for businesses with 1–4, 5–19, 20–99 employees respectively.

The vast majority of businesses had 1–4 employees when they began operations. Of the 96,580 businesses created on average annually from 2013–2017, close to 90 percent (or 86,840 businesses) had 1–4 employees when they were created. Over the course of this period, 8.5 percent, and 1.5 percent of new businesses began operations with, respectively, 5–19 and 20–99 employees. Of the average 90,600 annual closures, 91.6 percent, 8.0 percent, and 0.4 percent were businesses with 1–4, 5–19, and 20–99 employees, respectively.

1.3 What proportion of new businesses survive the first sixteen years?

Businesses in the goods-producing and services-producing sectors showed similar survival rates over the course of the first two years (T + 1 and T + 2) after their creation (T0) (Figure 4). After the third year (T + 3), business survival rates in the goods-producing sector were higher than in the services-producing sector. After five years (T + 5), 69.2 percent of businesses in the goods-producing sector were still operating, compared with 66.2 percent of businesses in the services-producing sector.

After 10 years (T + 10), the business survival rate for the goods-producing sector was 49.0 percent, compared with 44.2 percent for the services-producing sector. Finally, 35.1 percent of businesses in the goods-producing sector and 29.6 percent of business in the services-producing sector were still active sixteen years (T + 16) after they entered the Canadian market.

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. Of businesses that began operations with 1–4 employees, 62.0 percent were still active after five years (T + 5), 43.2 percent were still active after ten years (T + 10), and 30.2 percent were still active after 16 years (T + 16), compared with businesses that began operations with a workforce of 20–99 employees, of which 73.5 percent were still active after five years (T + 5), 54.7 percent were still active after 10 years (T + 10) and 40.1 percent were still active after sixteen years (T + 16).

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2. Employment

2.1 How many people were employed in Canada in 2019?

In 2019, approximately 16.1 million individuals were employed^{Footnote 7} in Canada. Of this number, 76.2 percent worked in the private sector^{Footnote 8} and 23.8 percent worked in the public sector^{Footnote 9} (Table 4).

Table 4: Number of individuals employed in the private and public sectors, by business size, 2019

	Small businesses (1–99 employees)		Medium-sized businesses (100499 employees)		SMEs (1499 employees)		Large businesses (500+ employees)
	Number (thousands)	%	Number (thousands)	%	Number (thousands)	%	Number (thousands)	%	Total (thousands)
Note: Figures may not add up to totals because of rounding. Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Private sector	8,459.6	68.8	2,428.4	19.7	10,887.9	88.5	1,415.6	11.5	12,303.5
% Private sector	80.2%	−	74.2%	−	78.8%	−	60.7%	−	76.2%
Public sector	2,088.8	54.3	843.3	21.9	2,932.0	76.2	917.0	23.8	3,849.0
% Public sector	19.8%	−	25.8%	−	21.2%	−	39.3%	−	23.8%
Total	10,548.4	65.3	3,271.6	20.3	13,820.9	85.6	2,332.5	14.4	16,152.5

The distribution of the number of people employed according to business size varies considerably between the private sector and the public sector. In 2019, 88.5 percent of employed individuals in the private sector worked for SMEs, compared with 76.2 percent of those employed by public organizations of the same size.

Between 2014 and 2019, the number of individuals employed in Canada showed a net gain of 1,076,100. Just over 70 percent of this increase is attributed to the private sector and less than 30 percent to the public sector.

2.2 What is the distribution of employment across the private sector?

In 2019, private sector businesses employed 12.3 million people in Canada. The majority of private sector employees worked for small businesses, specifically 68.8 percent (8.4 million), compared with 19.7 percent (2.4 million) for medium-sized businesses and 11.5 percent (1.4 million) for large businesses (Figure 6). In total, SMEs employed 88.5 percent of the private sector workforce (10.9 million individuals), highlighting the important role SMEs play in employing Canadians.

SMEs play an essential role in employing Canadians across the country. At the provincial level, the percentage of private sector employment in SMEs is highest in Prince Edward Island and in Newfoundland and Labrador, at 96.9 percent and 94.0 percent, respectively (Table 5).

In contrast, this percentage is lowest in Quebec and Ontario at 86.4 percent in each province. Total private sector employment in Ontario and Quebec amounts to 7,680,600 jobs, which represents 62.4 percent of Canadian private sector employment.

Table 5: Total private sector employment by province and business size, 2019

	Small businesses (1–99 employees)		Medium-sized businesses (100–499 employees)			Large businesses (500+ employees)
Province	Number (thousands)	%	Number (thousands)	%	% of SME employment	Number (thousands)	%	Total (thousands)
Note: Figures may not add up to totals because of rounding. Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Newfoundland and Labrador	108.6	77.1	23.8	16.9	94.0	8.4	6.0	140.9
Prince Edward Island	38.8	84.1	5.9	12.8	96.9	1.4	3.1	46.1
Nova Scotia	219.3	74.3	53.1	18.0	92.4	22.5	7.6	294.9
New Brunswick	159.6	70.1	48.8	21.4	91.6	19.2	8.4	227.6
Quebec	1,869.9	66.4	563.6	20.0	86.4	383.7	13.6	2,817.2
Ontario	3,156.7	64.9	1,044.2	21.5	86.4	662.5	13.6	4,863.4
Manitoba	282.8	70.5	77.9	19.4	89.9	40.4	10.1	401.2
Saskatchewan	264.8	78.9	50.3	15.0	93.9	20.4	6.1	335.5
Alberta	1,113.8	72.8	275.4	18.0	90.7	141.7	9.3	1,530.9
British Columbia	1,245.3	75.7	285.3	17.3	93.0	115.2	7.0	1,645.8
Canada	8,459.6	68.8	2,428.4	19.7	88.5	1,415.6	11.5	12,303.5

Distribution of employment by business size varies across industries. As shown in Table 6, SMEs account for over 90 percent of employment in six industries: agriculture (98.3 percent); other services (except public administration) (98.9 percent); accommodation and food services (98.5 percent); wholesale and retail trade (95.4 percent); construction (95.1 percent); and business, building and other support services (92.7 percent).

Table 6: Total private sector employment by industrial sector and business size, 2019

	Small businesses (1–99 employees)		Medium-sized businesses (100499 employees)			Large businesses (500+ employees)
	Number (thousands)	%	Number (thousands)	%	% of SME employment	Number (thousands)	%	Total (thousands)
Note: Figures may not add up to totals because of rounding. Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Goods-Producing Sector	1,898.9	60.5	812.1	25.9	86.4	427.6	13.6	3,138.5
Agriculture, forestry, fishing and hunting	117.0	88.9	12.5	9.5	98.3	2.2	1.7	131.6
Mining, quarrying, and oil and gas extraction	137.9	48.1	66.7	23.3	71.4	81.8	28.6	286.4
Utilities	8.2	44.3	5.0	27.0	71.3	5.3	28.7	18.4
Construction	845.6	81.2	144.6	13.9	95.1	50.6	4.9	1,040.8
Manufacturing	790.3	47.6	583.3	35.1	82.7	287.8	17.3	1,661.4
Services-Producing Sector	6,560.7	71.6	1,616.3	17.6	89.2	988.0	10.8	9,165.0
Wholesale and retail trade	1,996.1	77.7	453.1	17.6	95.4	119.2	4.6	2,568.4
Transportation and warehousing	367.7	56.2	161.0	24.6	80.8	125.5	19.2	654.2
Finance, insurance, real estate and leasing	532.0	58.2	187.8	20.5	78.7	194.3	21.3	914.0
Professional, scientific and technical services	694.8	65.6	247.9	23.4	88.9	117.2	11.1	1,059.9
Business, building and other support services	433.7	75.1	101.6	17.6	92.7	42.1	7.3	577.4
Educational services	77.0	61.5	21.6	17.2	78.7	26.7	21.3	125.2
Health care and social assistance	592.6	56.0	200.4	18.9	75.0	265.0	25.0	1,058.0
Information, culture and recreation	326.0	63.2	115.1	22.3	85.5	74.8	14.5	515.9
Accommodation and food services	1,013.2	91.1	82.7	7.4	98.5	16.8	1.5	1,112.7
Other services (except public administration)	527.7	91.1	45.1	7.8	98.9	6.4	1.1	579.2
Total	8,459.6	68.8	2,428.4	19.7	88.5	1,415.6	11.5	12,303.5

The total number of employees working for small businesses in 2019 was, in order of magnitude, wholesale and retail trade (2.0 million); accommodation and food services (1.01 million); construction (0.84 million); and manufacturing (0.79 million). These industries alone accounted for 55.0 percent of all jobs in small businesses in Canada. Overall, industries in the goods-producing sector accounted for 25.5 percent of total employment and 22.4 percent of employment in small businesses.

Accommodation and food services had the highest share of employees working in small businesses (199 employees), specifically 1,013,200 out of the total of 1,112,700 employees in the industry, or approximately 91.1 percent.

2.3 How much did employment grow between 2014 and 2019?

Between 2014 and 2019, total net employment change in the private sector was 772,200, which corresponds to an average annual growth rate of 1.3 percent (Table 7). The net employment change among small businesses was 276,600, compared with 195,800 among medium-sized businesses, or an average annual growth rate of 0.7 percent and 1.7 percent, respectively. Consequently, the contribution to net employment change by small businesses was 35.8 percent and 25.4 percent by medium-sized businesses. SMEs were responsible for 61.2 percent of net employment change over the last five years (Figure 7).

Table 7: Average annual growth rate and contribution to net employment change in the private sector by province and business size, 2014–2019

Province	Small businesses (1–99 employees)			Medium-sized businesses (100499 employees)			Large businesses (500+ employees)			Total
	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)
Note: Figures may not add up to totals because of rounding. Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Newfoundland and Labrador	−1.4	−7.8	76.2	0.1	0.1	−1.1	−5.2	−2.6	24.9	−1.4	−10.3	100
Prince Edward Island	1.9	3.4	101.2	−0.1	0.0	−0.9	−0.1	0.0	−0.3	1.5	3.4	100
Nova Scotia	1.0	10.2	64.8	0.8	2.0	12.6	3.5	3.6	22.6	1.1	15.8	100
New Brunswick	−1.1	−9.2	−	2.7	6.1	−	3.9	3.3	−	0.0	0.3	100
Quebec	0.3	32.3	16.6	2.7	70.3	36.2	5.6	91.8	47.2	1.4	194.4	100
Ontario	0.8	122.8	35.5	1.7	83.5	24.1	4.9	140.1	40.4	1.5	346.4	100
Manitoba	0.2	2.6	14.2	2.2	8.2	45.3	4.0	7.3	40.4	0.9	18.0	100
Saskatchewan	1.0	13.4	118.5	−1.8	−4.8	−42.2	2.8	2.7	23.7	0.7	11.3	100
Alberta	−0.4	−20.6	−210.2	0.9	11.9	121.1	2.8	18.5	189.1	0.1	9.8	100
British Columbia	2.2	129.4	70.7	1.3	18.5	10.1	7.6	35.2	19.2	2.4	183.1	100
Canada	0.7	276.6	35.8	1.7	195.8	25.4	4.9	299.8	38.8	1.3	772.2	100

Over the last five years, private sector employment has increased in nine of the 10 provinces. Newfoundland and Labrador saw a drop in private sector employment; employment dropped for small and large businesses, and increased modestly for medium-sized businesses. Five provinces showed employment increases across all size categories: Nova Scotia, Quebec, Ontario, Manitoba and British Columbia. British Columbia posted the greatest annual average growth (2.4 percent) in private sector employment over the last five years.

Over the 2014–2019 period, 90 percent of net employment change was attributable to businesses in the services-producing sector; employment in the goods-producing sector showed a negligible increase (Table 8).

The most significant net employment changes observed in the services-producing sector were the increases in professional, scientific and technical services (180,600) and in health care and social assistance (149,300). These two industries alone accounted for close to 47 percent of the net change in the services-producing sector. The contribution to net employment change by SMEs in these two industries was 84.3 percent for the professional, scientific and technical services sector and 64.3 percent for health care and social assistance.

A positive net employment change was observed in the agriculture industry, construction industry and in manufacturing: 8,800, 81,000 and 30,800 jobs, respectively, which were partly offset by negative net employment changes (43,800 jobs) observed in the other two industries making up the goods-producing sector.

Table 8: Average annual growth rate and contribution to net employment change by industrial sector and business size, 2014–2019

	Small businesses (1–99 employees)			Medium-sized businesses (100499 employees)			Large businesses (500+ employees)			Total
	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)	AAGRFootnote * (%)	NECFootnote ** (thousands)	CECFootnote *** (%)
Note: Figures may not add up to totals because of rounding. Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Goods-Producing Sector	−0.2	−21.7	−28.3	0.8	33.5	43.6	3.4	65.1	84.7	0.5	76.9	100
Agriculture, forestry, fishing and hunting	0.4	2.6	29.4	8.1	4.0	45.6	0.0	2.2	25.0	1.4	8.8	100
Mining, quarrying, and oil and gas extraction	−4.9	−39.2	98.8	−3.3	−12.1	30.6	3.1	11.7	−29.4	−2.6	−39.7	100
Utilities	−4.8	−2.3	56.0	−2.6	−0.7	16.8	−3.8	−1.1	27.2	−3.9	−4.1	100
Construction	1.5	62.0	76.5	1.6	11.1	13.7	3.5	7.9	9.8	1.6	81.0	100
Manufacturing	−1.1	−44.8	−145.5	1.1	31.2	101.2	3.4	44.4	144.3	0.4	30.8	100
Services-Producing Sector	0.9	298.4	42.9	2.1	162.3	23.3	5.6	234.7	33.8	1.6	695.3	100
Wholesale and retail trade	0.4	40.9	31.7	1.5	33.4	25.9	13.0	54.6	42.4	1.0	128.9	100
Transportation and warehousing	1.1	19.4	24.0	3.2	23.3	28.8	7.5	38.1	47.2	2.7	80.8	100
Finance, insurance, real estate and leasing	−0.3	−8.6	−12.5	3.7	31.6	45.7	5.6	46.2	66.8	1.6	69.1	100
Professional, scientific and technical services	3.1	99.3	54.9	4.9	53.1	29.4	5.7	28.3	15.7	3.8	180.6	100
Business, building and other support services	1.4	28.4	89.8	−0.6	−3.2	−10.2	3.4	6.4	20.4	1.1	31.6	100
Educational services	5.7	18.5	58.1	4.8	4.5	14.2	8.4	8.8	27.7	6.1	31.9	100
Health care and social assistance	2.9	78.2	52.4	1.9	17.7	11.9	4.6	53.4	35.7	3.1	149.3	100
Information, culture and recreation	0.3	5.5	79.6	0.1	0.4	5.2	0.3	1.0	15.2	0.3	6.9	100
Accommodation and food services	0.2	7.8	428.1	−0.7	−2.9	−156.6	−3.4	−3.1	−171.5	0.0	1.8	100
Other services (except public administration)	0.4	9.1	63.2	2.1	4.4	30.6	3.0	0.9	6.2	0.5	14.5	100
Total	0.7	276.6	35.8	1.7	195.8	25.4	4.9	299.8	38.8	1.3	772.2	100

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3. Growth

3.1 What is the proportion 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 10} high-growth firms^{Footnote 11} 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 2014 and 2017, 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 the following industries: construction (8.6 percent); manufacturing (8.3 percent); and mining, quarrying, and oil and gas extraction (7.7 percent). In the services-producing sector, industries with the largest share of high-growth firms are information and cultural industries (10.6 percent); professional, scientific and technical services (8.0 percent); and administrative and support, waste management, and remediation services (7.2 percent). Overall, the share of high-growth firms based upon revenue is just under double the share based upon employment (5.5 percent versus 3.2 percent).

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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 2019, out of the 50,542 establishments that exported goods, 42.5 percent were operating in Ontario (Table 9). Ontario had the highest concentration of exporters at 48.7 exporters per thousand establishments, respectively. The lowest concentration of exporters was found in the territories and Newfoundland and Labrador, at 15.9 and 18.8 exporters per thousand establishments, respectively.

In Canada, the average value of exports per establishment was $10.6 million in 2019. This includes establishments located in the territories, which had the highest average value of exports, at slightly more than $29.9 million per establishment, followed by Newfoundland and Labrador and Alberta at $27.1 million and $23.3 million per establishment, respectively. This can probably be explained by the fact that the territories and these two provinces specialize in the exploitation of natural resources.

Table 9: Provincial exports by number of establishments and value of goods exported, 2019

	Number of exporters	Distribution (%)	Number of exporters per 1,000 establishments	Value of exports ($ billions)	Distribution (%)	Average value of exports by establishment ($ millions)
Note: Figures may not add up to totals because of rounding. Source: Statistics Canada, Table 12-10-0098-01 — Trade in goods by exporter characteristics, by industry of establishment (x 1,000).
Newfoundland and Labrador	321	0.6	18.8	8.7	1.6	27.1
Prince Edward Island	234	0.5	37.3	1.7	0.3	7.3
Nova Scotia	1,037	2.1	34.6	5.9	1.1	5.6
New Brunswick	777	1.5	30.7	12.4	2.3	16.0
Quebec	10,984	21.7	44.2	88.6	16.6	8.1
Ontario	21,459	42.5	48.7	204.4	38.3	9.5
Manitoba	1,821	3.6	45.9	22.4	4.2	12.3
Saskatchewan	1,346	2.7	32.5	17.4	3.3	12.9
Alberta	5,305	10.5	32.2	123.4	23.1	23.3
British Columbia	7,192	14.2	38.4	46.3	8.7	6.4
Territories	66	0.1	15.9	2.0	0.4	29.9
Canada	50,542	−	42.0	533.3	−	10.6

4.2 How do SMEs contribute to Canada's exports?

In 2019, Canada's exports of goods increased to $533.3 billion, of which 40.6 percent was attributable to SMEs (Figure 9). More than 50,000 Canadian establishments exported goods, the vast majority of which were SMEs (97.4 percent).

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 2019 (Figure 10). Manufacturing accounted for 57.6 percent of the total value of goods exported in 2019, followed by wholesale trade (13.5 percent), management of companies and enterprises (13.5 percent) and mining, quarrying, and oil and gas extraction (8.4 percent).

The contribution of SMEs to exports of goods varies by industrial sector (Figure 11). In 2019, the contribution of SMEs to the total value of goods exported was 74.4 percent in wholesale trade and 62.1 percent in "other industries." At the other end of the scale, the contribution of SMEs to the value of exports of goods was only 5.9 percent in management of companies and enterprises and 37.4 percent in manufacturing.

4.3 What are Canada's main export destinations?

Between 2014 and 2019, the value of goods exported increased to an average annual growth rate of 2.6 percent, totaling almost $533 billion (Table 10). This 2.6 percent annual growth rate is a little higher than that observed for exports to the United States (2.2 percent), the main destination for Canadian goods exports.

From 2014 to 2019, the value of exports to the United States by small businesses as a percentage of the value of total exports by small businesses decreased from 79.6 percent to 78.8 percent; for medium-sized businesses, the decrease was from 72.2 percent to 68.7 percent. This percentage also decreased for large businesses, with exports of goods to the United States by large businesses dropping from 76.4 percent to 75.4 percent (Table 11).

Of the 20 main destinations for exports of Canadian goods in 2019, the highest contribution attributable to SMEs toward the total value of goods exported came from exports destined for the United Kingdom, the third-most significant destination at 69.2 percent of the total value of goods exported by SMEs. Canadian SMEs also accounted for more than 50 percent of the total value of goods exported to two other countries among the 20 main destinations: Brazil (66.2 percent) and Australia (63.9 percent).

In 2019, the second-most significant destination for goods produced by small businesses was China, followed by Japan. The United Kingdom was the second-most significant destination for medium-sized businesses, with China in third.

Table 10: Twenty main destinations for exports of Canadian goods, 2014 and 2019

	2014					2019
			Contribution (%)						Contribution (%)
	Rank	Value ($ billions)	Small businesses	Medium-sized businesses	Large businesses	Rank	Value ($ billions)	AAGRFootnote * 2014–19 (%)	Small businesses	Medium-sized businesses	Large businesses
Note: Figures may not add up to totals because of rounding. 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	356.9	20.1	21.3	58.6	1	398.2	2.2	20.6	19.4	60.0
China	2	17.8	16.8	21.2	62.0	2	21.6	4.0	23.1	25.0	51.8
United Kingdom	3	14.1	4.0	65.8	30.2	3	19.1	6.2	5.6	63.6	30.8
Japan	4	10.4	21.1	22.6	56.3	4	12.1	3.0	15.5	18.1	66.4
Mexico	5	5.2	13.0	20.4	66.6	5	6.8	5.7	11.7	24.3	64.0
Germany	13	2.7	20.9	19.0	60.1	6	5.5	14.9	12.3	15.3	72.4
South Korea	8	3.9	20.5	14.0	65.5	7	5.3	6.5	27.9	18.3	53.8
Netherlands	9	3.5	13.1	15.8	71.1	8	4.8	6.5	7.8	10.8	81.4
India	12	3.0	17.5	28.6	53.9	9	4.5	8.8	16.7	19.6	63.6
Hong Kong	6	4.2	18.8	26.9	54.3	10	3.7	−2.7	18.1	7.2	74.7
France	11	3.0	11.7	16.4	71.9	11	3.3	1.5	13.5	19.5	66.9
Italy	7	4.0	8.7	17.0	74.3	12	3.0	−5.6	8.2	17.2	74.7
Belgium	10	3.4	13.0	9.9	77.1	13	2.9	−2.9	11.7	15.6	72.8
Saudi Arabia	21	1.1	21.9	9.2	68.9	14	2.7	19.2	3.4	4.9	91.7
Norway	14	2.2	5.0	2.0	93.0	15	2.1	−0.9	2.8	5.1	92.1
Taiwan	20	1.3	24.4	13.6	62.1	16	1.9	8.1	28.0	9.3	62.7
Australia	17	1.5	24.5	27.7	47.9	17	1.9	4.6	25.1	38.7	36.1
Indonesia	16	1.9	6.6	45.7	47.7	18	1.9	−0.7	12.5	30.7	56.8
Brazil	15	2.0	12.1	42.5	45.4	19	1.9	−1.8	8.6	57.7	33.8
Turkey	26	1.0	14.9	28.5	56.6	20	1.6	8.9	10.2	13.5	76.3
Rest of the world	-	26.0	23.7	19.1	57.3	−	28.6	1.9	23.1	19.9	57.0
Total	-	469.3	19.2	22.5	58.3	-	533.3	2.6	19.5	21.1	59.4

Table 11: Twenty main destinations for exports of Canadian goods, distribution of the value of exports by destination for each category of business size, Canada, 2014 and 2019

	2014					2019
			Contribution (%)						Contribution (%)
	Rank	Value ($ billions)	Small businesses	Medium-sized businesses	Large businesses	Rank	Value ($ billions)	AAGRFootnote * 2014–19 (%)	Small businesses	Medium-sized businesses	Large businesses
Note: Figures may not add up to totals because of rounding. 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	356.9	79.6	72.2	76.4	1	398.2	2.2	78.8	68.7	75.4
China	2	17.8	3.3	3.6	4.0	2	21.6	4.0	4.8	4.8	3.5
United Kingdom	3	14.1	0.6	8.8	1.6	3	19.1	6.2	1.0	10.8	1.9
Japan	4	10.4	2.4	2.2	2.1	4	12.1	3.0	1.8	1.9	2.5
Mexico	5	5.2	0.7	1.0	1.3	5	6.8	5.7	0.8	1.5	1.4
Germany	13	2.7	0.6	0.5	0.6	6	5.5	14.9	0.6	0.7	1.3
South Korea	8	3.9	0.9	0.5	0.9	7	5.3	6.5	1.4	0.9	0.9
Netherlands	9	3.5	0.5	0.5	0.9	8	4.8	6.5	0.4	0.5	1.2
India	12	3.0	0.6	0.8	0.6	9	4.5	8.8	0.7	0.8	0.9
Hong Kong	6	4.2	0.9	1.1	0.8	10	3.7	−2.7	0.6	0.2	0.9
France	11	3.0	0.4	0.5	0.8	11	3.3	1.5	0.4	0.6	0.7
Italy	7	4.0	0.4	0.6	1.1	12	3.0	−5.6	0.2	0.5	0.7
Belgium	10	3.4	0.5	0.3	0.9	13	2.9	−2.9	0.3	0.4	0.7
Saudi Arabia	21	1.1	0.3	0.1	0.3	14	2.7	19.2	0.1	0.1	0.8
Norway	14	2.2	0.1	0.0	0.7	15	2.1	−0.9	0.1	0.1	0.6
Taiwan	20	1.3	0.3	0.2	0.3	16	1.9	8.1	0.5	0.2	0.4
Australia	17	1.5	0.4	0.4	0.3	17	1.9	4.6	0.5	0.6	0.2
Indonesia	16	1.9	0.1	0.8	0.3	18	1.9	−0.7	0.2	0.5	0.3
Brazil	15	2.0	0.3	0.8	0.3	19	1.9	−1.8	0.2	1.0	0.2
Turkey	26	1.0	0.2	0.3	0.2	20	1.6	8.9	0.2	0.2	0.4
Rest of the world	-	26.0	6.8	4.7	5.4	-	28.6	1.9	6.4	5.1	5.1
Total	-	469.3	100.0	100.0	100.0	-	533.3	2.6	100.0	100.0	100.0

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5. Gross domestic product

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

Gross domestic product (GDP) 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, number of businesses or even employment. Statistics Canada recently produced the more recent estimates of GDP generated by the private sector by business size for the 2003–2016 period.

Based on Statistics Canada estimates, the contribution to GDP by business size did not vary significantly throughout the 2003–2016 period (Figure 12). On average, from 2012 to 2016, the contribution of small businesses to GDP was 41.0 percent, the contribution of medium-sized businesses was 12.8 percent and the contribution of large businesses was 46.2 percent. In other words, SMEs accounted for more than 50 percent of the value added to the country's output.

The contribution of SMEs to GDP varied more from one industrial sector to another (Table 12). The average contribution of SMEs to GDP over the 2012–2016 period was 51.1 percent in the goods-producing sector, compared with 55.7 percent in the services-producing sector.

For the goods-producing sector, the average contribution of SMEs to GDP was 95.2 percent in agriculture and 79.5 percent in construction. For the other three industries in the goods-producing sector, the average contribution of SMEs to GDP was less than 50 percent.

Table 12: Contribution to GDP by business size and industrial sector, average from 2012–2016

	Contribution (%)
	Small businesses (199 employees)	Medium-sized businesses (100499 employees)	SMEs (1499 employees)	Large businesses (500+ employees)
Note: Figures may not add up to totals because of rounding. Source: Statistics Canada.
Goods-Producing Sector	36.3	14.8	51.1	48.9
Agriculture, forestry, fishing and hunting	89.5	5.7	95.2	4.8
Mining, quarrying, and oil and gas extraction	17.3	9.9	27.2	72.8
Utilities	4.6	6.5	11.1	88.9
Construction	65.3	14.1	79.5	20.5
Manufacturing	25.6	21.1	46.7	53.3
Services-Producing Sector	44.2	11.5	55.7	44.3
Wholesale trade	39.3	18.8	58.0	42.0
Retail trade	47.3	10.8	58.1	41.9
Transportation and warehousing	32.2	10.8	43.0	57.0
Finance, insurance, real estate and leasing	35.4	8.4	43.8	56.2
Professional, scientific and technical services	56.3	12.8	69.1	30.9
Business, building and other support services	42.4	15.9	58.2	41.8
Educational services	70.6	12.3	82.9	17.1
Health care and social assistance	86.5	5.1	91.6	8.4
Information, culture and recreation	12.5	8.2	20.7	79.3
Accommodation and food services	64.5	15.6	80.1	19.9
Other services (except public administration)	79.7	6.4	86.1	13.9
Total	41.0	12.8	53.8	46.2

For the services-producing sector, the greatest contribution of SMEs to GDP was 91.6 percent observed in health care and social assistance, 86.1 percent in other services (except public administration), and 82.9 percent in educational services.

The information, culture and recreation (20.7 percent); finance, insurance, real estate and leasing (43.8 percent), and transportation and warehousing (43.0 percent) industries had, on average, lower contributions to GDP from SMEs.