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Key Small Business Statistics — 2020

This publication is available for download at ic.gc.ca/sbstatistics.

Cette publication est aussi disponible en français sous le titre Principales statistiques relatives aux petites entreprises.

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© Her Majesty the Queen in Right of Canada as represented by the Minister of Industry, 2020

Innovation, Science and Economic Development Canada
Small Business Branch
Research and Analysis Directorate

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


Foreword

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

icon

In this publication, the definition of 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:


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:


Highlights

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Number of businesses

As of December 2019, the Canadian economy totaled 1.23 million employer businesses. 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.

Between 2013 and 2017, the average number of SMEs created annually was 96,580 and the average number of businesses that disappeared annually was 90,600.

On average, 35.1 percent of SMEs created in the goods-producing sector survived at least 16 years, compared with 29.6 percent of SMEs created in the services-producing sector.

icon of people

Employment

As of 2019, small businesses employed 8.4 million individuals in Canada, or 68.8 percent of the total private labour force. By comparison, medium-sized businesses employed 2.4 million individuals (19.7 percent of the private labour force) and large businesses employed 1.4 million individuals (11.5 percent of the private labour force).

Between 2014 and 2019, small businesses were responsible for 35.8 percent of the net employment growthFootnote 4 in the private sector, which increased by approximately 772,200 jobs. Medium-sized businesses contributed 25.4 percent of this net employment growth and large businesses contributed 38.8 percent.

icon of dollar sign

SMEs' contribution to gross domestic product

In 2016, small businesses contributed 41.9 percent to gross domestic product (GDP) generated by the private sector, while the contribution of medium-sized businesses was 13.4 percent and the contribution of large businesses was 44.7 percent.

Over the 2012–2016 period, SMEs' contribution to GDP was 51.1 percent, on average, in the goods-producing sector, compared with 55.7 percent in the services-producing sector.

icon of line chart

High-growth firms

High-growth firms (HGFs) are present in every economic sector and are not just concentrated in knowledge-based industries. Based upon employment growth from 2014 to 2017, the highest concentration of HGFs in Canada is found in the following sectors:

  • information and cultural industries (6.9 percent);
  • mining, quarrying, and oil and gas extraction (5.4 percent); and
  • administrative and support, waste management and remediation services (5.1 percent).
icon of globe

Export of goods

In 2019, 50,542 Canadian establishments exported goods with a value totaling $533.3 billion. In 2019, Ontario had 48.7 exporters per thousand establishments, followed by Manitoba with 45.9 and Quebec with 44.2. In 2019, SMEs contributed 40.6 percent of the total value of exported goods. In 2019, Canada's main export destination was the United States, followed by China and the United Kingdom.


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.

Figure 1: Number of businesses with at least one employee, Canada, 2001–2017

Line chart illustrating the Number of businesses with at least one employee, Canada, 2001–2017 (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 1
Number of businesses with at least one employee, Canada, 2001–2017
Number of businesses with at least one employee, Canada, 2001–2017
Year Number of businesses
with at least one employee
2001 899,008
2002 905,333
2003 913,407
2004 954,653
2005 971,854
2006 994,646
2007 1,020,417
2008 1,042,287
2009 1,049,548
 
Number of businesses with at least one employee, Canada, 2001–2017
Year Number of businesses
with at least one employee
2010 1,064,221
2011 1,080,135
2012 1,093,254
2013 1,091,429
2014 1,102,524
2015 1,109,955
2016 1,109,242
2017 1,123,173

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.

Figure 2: Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017

Line chart illustrating the Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017 (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 2
Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017
Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017
Year Canada Goods-producing sector Service-producing sector
2001 9.1% 7.5% 9.7%
2002 8.9% 7.2% 9.5%
2003 9.7% 8.0% 10.3%
2004 10.3% 8.5% 10.9%
2005 10.0% 8.4% 10.6%
2006 9.2% 8.1% 9.6%
2007 8.6% 7.3% 9.1%
2008 9.2% 7.9% 9.7%
2009 8.6% 7.2% 9.1%
 
Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2017
Year Canada Goods-producing sector Service-producing sector
2010 8.7% 8.1% 8.9%
2011 8.7% 8.0% 8.9%
2012 8.9% 8.2% 9.1%
2013 8.7% 8.2% 8.9%
2014 8.8% 8.2% 9.0%
2015 8.6% 8.0% 8.9%
2016 8.6% 7.8% 8.8%
2017 8.9% 8.1% 9.2%

Figure 3: Birth rate by initial business size, Canada, 2001–2017

Line chart illustrating the Birth rate by initial business size, Canada, 2001–2017 (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, 2001–2017
Birth rate by initial business size, Canada, 2001–2017
Year 1–4 employees 5–19 employees 20–99 employees
2001 11.9% 4.1% 1.8%
2002 11.6% 4.0% 1.9%
2003 12.5% 4.4% 2.1%
2004 13.3% 4.5% 2.0%
2005 13.0% 4.3% 2.0%
2006 11.8% 4.0% 1.9%
2007 11.1% 3.5% 1.6%
2008 11.8% 3.8% 1.7%
2009 11.0% 3.6% 1.7%
 
Birth rate by initial business size, Canada, 2001–2017
Year 1–4 employees 5–19 employees 20–99 employees
2010 10.9% 3.8% 2.0%
2011 10.9% 3.6% 1.8%
2012 11.2% 3.6% 1.8%
2013 11.0% 3.6% 1.7%
2014 11.1% 3.6% 1.7%
2015 10.8% 3.6% 1.8%
2016 10.8% 3.5% 1.7%
2017 11.3% 3.5% 1.6%

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.

Figure 4: Survival rate of businesses with one or more employees, goods producing sector and services-producing sector, Canada

Line chart illustrating the Survival rate of businesses with one or more employees, goods producing sector and services-producing sector, 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, goods producing sector and services-producing sector, Canada
Survival rate of businesses with one or more employees, goods producing sector and services-producing sector, Canada
Number of years since the company's entry Canada Goods-producing sector Service-producing sector
T 0 100.0% 100.0% 100.0%
T+1 95.4% 94.9% 95.6%
T+2 88.1% 88.0% 88.1%
T+3 80.7% 81.4% 80.5%
T+4 73.3% 75.0% 72.8%
T+5 66.9% 69.2% 66.2%
T+6 61.2% 64.1% 60.3%
T+7 55.9% 59.3% 54.9%
T+8 51.7% 55.4% 50.6%
 
Survival rate of businesses with one or more employees, goods producing sector and services-producing sector, Canada
Number of years since the company's entry Canada Goods-producing sector Service-producing sector
T+9 48.4% 52.1% 47.4%
T+10 45.3% 49.0% 44.2%
T+11 42.3% 45.9% 41.2%
T+12 39.5% 43.4% 38.4%
T+13 37.1% 41.2% 35.9%
T+14 35.0% 39.2% 33.8%
T+15 32.9% 37.2% 31.8%
T+16 30.8% 35.1% 29.6%

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).

Figure 5: Survival rate by initial business size, Canada

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, Canada
Survival rate by initial business size, Canada
Number of years since the company's entry 1–4 employees 5–19 employees 20–99 employees
T 0 100.0% 100.0% 100.0%
T+1 92.4% 96.9% 98.2%
T+2 82.9% 89.0% 92.4%
T+3 74.8% 81.0% 85.2%
T+4 67.8% 74.0% 78.4%
T+5 62.0% 67.9% 73.5%
T+6 57.0% 62.7% 69.3%
T+7 52.6% 58.0% 64.8%
T+8 49.2% 54.1% 61.6%
 
Survival rate by initial business size, Canada
Number of years since the company's entry 1–4 employees 5–19 employees 20–99 employees
T+9 46.1% 50.6% 57.8%
T+10 43.2% 47.6% 54.7%
T+11 40.7% 44.7% 51.7%
T+12 38.2% 42.1% 48.5%
T+13 36.0% 39.8% 46.1%
T+14 34.2% 37.9% 44.6%
T+15 32.3% 35.4% 42.3%
T+16 30.2% 33.2% 40.1%

2. Employment

2.1 How many people were employed in Canada in 2019?

In 2019, approximately 16.1 million individuals were employedFootnote 7 in Canada. Of this number, 76.2 percent worked in the private sectorFootnote 8 and 23.8 percent worked in the public sectorFootnote 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
(100−499 employees)
SMEs
(1−499 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.

Figure 6: Distribution of private sector employees by business size, 2019

Pie chart illustrating the distribution of private sector employees by business size, 2019 (the long description is located below the image)
Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Description of Figure 6
Distribution of private sector employees by business size, 2019
Business size Distribution in percentage
Small businesses (1–99 employees) 68.8%
Medium-sized businesses (100–499 employees) 19.7%
Large businesses (500 + employees) 11.5%

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
(100−499 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 (1−99 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
(100−499 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).

Figure 7: Contribution to net employment change of private sector businesses by business size, 2014–2019

Pie chart illustrating the contribution to net employment change of private sector businesses by business size, 2014–2019 (the long description is located below the image)
Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Description of Figure 7
Contribution to net employment change of private sector businesses by business size, 2014–2019
Business size Contribution in percentage
Small businesses (1–99 employees) 35.8%
Medium-sized businesses (100–499 employees) 25.4%
Large businesses (500 + employees) 38.8%

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
(100−499 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

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 firmsFootnote 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).

Figure 8: Percentage of high-growth firms by industry, based upon revenue and employment growth, 2014–2017

horizontal bar chart illustrating the Percentage of high-growth firms by industry, based upon revenue and employment growth, 2014–2017 (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, 2014−2017
Percentage of high-growth firms by industry, based upon revenue and employment growth, 2014−2017
Industry sector Revenue Employment
Total 3.2% 5.5%
Accommodation and food services 2.1% 2.9%
Health care and social assistance 2.2% 3.1%
Other services (except 91 Public administration) 2.1% 3.3%
Arts, entertainment and recreation 3.2% 3.9%
Retail trade 2.4% 4.0%
Educational services 3.6% 4.4%
Utilities 5.0% 5.0%
Transportation and warehousing 4.5% 5.9%
Agriculture, forestry, fishing and hunting 3.9% 6.4%
Wholesale trade 3.5% 6.5%
 
Percentage of high-growth firms by industry, based upon revenue and employment growth, 2014–2017
Industry sector Revenue Employment
Real estate and rental and leasing 2.8% 6.5%
Finance and insurance 3.3% 6.6%
Management of companies and enterprises 2.6% 7.0%
Administrative and support, waste management and remediation services 5.1% 7.2%
Mining, quarrying and oil and gas extraction 5.4% 7.7%
Professional, scientific and technical services 4.7% 8.0%
Manufacturing 3.9% 8.3%
Construction 4.2% 8.6%
Information and cultural industries 6.9% 10.6%

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).

Figure 9: Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2019

Bar chart illustrating the Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2019 (the long description is located below the image)
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).
Description of Figure 9
Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2019
Indicator Small businesses
(1−99 employees)
Medium-sized businesses
(100−499 employees)
Large businesses
(500 + employees)
Value 19.5% 21.1% 59.4%
Number of exporters 89.5% 7.9% 2.7%

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.

Figure 10: Main industries involved in the export of goods by value of exports, Canada, 2019

Bar chart illustrating the Main industries involved in the export of goods by value of exports, Canada, 2019 (the long description is located below the image)
Note: Figures may not add up to 100 percent because of rounding.
Source: Statistics Canada, Table 12-10-0094-01 — Trade in goods by exporter characteristics, by enterprise employment size and industry.
Description of Figure 10
Main industries involved in the export of goods by value of exports, Canada, 2019
Industry Sector Percentage distribution by value of exports
Manufacturing 57.6%
Wholesale trade 13.5%
Management of companies and enterprises 13.5%
Mining, quarrying and oil and gas extraction 8.4%
Other industries 7.0%

Figure 11: Contribution of SMEs to the total value of exports by industry, Canada, 2019

Bar chart illustrating the Contribution of SMEs to the total value of exports by industry, Canada, 2019 (the long description is located below the image)
Note: Figures may not add up to 100 percent because of rounding.
Source: Statistics Canada, Table 12-10-0094-01 — Trade in goods by exporter characteristics, by enterprise employment size and industry.
Description of Figure 11
Contribution of SMEs to the total value of exports by industry, Canada, 2019
Industry Sector Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
Manufacturing 11.6% 25.9% 62.5%
Wholesale trade 60.1% 14.2% 25.6%
Management of companies and enterprises 2.5% 3.4% 94.1%
Mining, quarrying and oil and gas extraction 12.8% 32.8% 54.4%
Other industries 47.1% 15.0% 37.9%

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

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.

Figure 12: Contribution to GDP by Business Size, Canada, 2003–2016

Line chart illustrating the Contribution to GDP by business size, Canada, 2003–2015 (the long description is located below the image)
Source: Statistics Canada.
Description of Figure 12
Contribution to GDP by Business Size, Canada, 2003–2016
Contribution to GDP by Business Size, Canada, 2003–2016
Year Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
2003 37.9% 12.8% 49.3%
2004 37.7% 12.7% 49.6%
2005 37.0% 12.3% 50.7%
2006 37.2% 12.3% 50.5%
2007 40.6% 12.9% 46.5%
2008 40.0% 12.3% 47.7%
2009 40.7% 12.3% 47.0%
 
Contribution to GDP by Business Size, Canada, 2003–2016
Year Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
2010 40.3% 12.2% 47.5%
2011 41.1% 12.6% 46.3%
2012 41.0% 12.6% 46.4%
2013 40.7% 12.5% 46.8%
2014 39.7% 12.5% 47.8%
2015 41.8% 13.2% 45.1%
2016 41.9% 13.4% 44.7%

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
(1−99 employees)
Medium-sized businesses
(100−499 employees)
SMEs
(1−499 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.

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