Key Small Business Statistics — 2021

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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 data on the business sector in Canada, focusing on small and medium-sized enterprises (SMEs). The data are, at the time of publication, the most up-to-date statistics available to Innovation, Science and Economic Development Canada.

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 2020?
  • What is the distribution of employment across the private sector?
  • How much did employment grow between 2019 and 2020?
  • 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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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

This publication defines a business based upon the number of paid employees.

Since self-employed and "indeterminate" businesses are not considered to have paid employeesFootnote 1, 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 2
  • a medium-sized business has 100 to 499 paid employees; and
  • a large business has 500 or more paid employees.

Highlights

In March 2020, in response to the COVID-19 pandemic, restrictions aimed at slowing the spread of the virus were introduced. The resulting economic contraction significantly impacted all 2020 statistics presented in this publication. These impacts are reflected in all statistics presented in this report for the reference year 2020. However, for certain statistics the most recently available data are for the reference year 2018; the pandemic impacts are not reflected in these statistics.

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Number of businesses

As of December 2020, there were 1.22 million employer businesses in Canada.

Of these, 1.2 million (97.9 percent) were small businesses, 22,725 (1.9 percent) were medium-sized businesses and 2,936 (0.2 percent) were large businesses.

Between 2014 and 2018, the average number of SMEs created annually was 97,640 and the average number of businesses that disappeared annually was 89,227.

On average, 33.5 percent of SMEs created in the goods-producing sector survived at least 17 years, compared with 28.0 percent of SMEs created in the services-producing sector.

Between 2005 and 2018, the business birth rate was lower for majority male-owned businesses than for the majority female-owned businesses. However, the survival rates were slightly higher for majority male-owned in comparison to majority female-owned businesses.

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Employment

As of 2020, small businesses employed 7.7 million individuals in Canada, or 67.7 percent of the total private labour force. By comparison, medium-sized businesses employed 2.3 million individuals (20.6 percent of the private labour force) and large businesses employed 1.3 million individuals (11.7 percent of the private labour force).

Between 2019 and 2020, small businesses were responsible for 84.3 percent of the net employment changeFootnote 3 in the private sector, which decreased by approximately 878,700 jobs. Medium-sized businesses contributed 7.8 percent of this net employment change and large businesses contributed 7.9 percent.

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SMEs' contribution to gross domestic product

In 2018, small businesses contributed 37.5 percent to gross domestic product (GDP) generated by the private sector, while the contribution of medium-sized businesses was 14.4 percent and the contribution of large businesses was 48.0 percent.

Over the 20142018 period, SMEs' contribution to GDP was 52.3 percent, on average, in the goods-producing sector, compared with 51.8 percent in the services-producing sector.

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High-growth firms

High-growth firms (HGFs) are present in every economic sector. Based upon employment growth from 2015 to 2018, the highest concentration of HGFs in Canada is found in the following sectors: mining, quarrying, and oil and gas extraction (6.8 percent); information and cultural industries (6.7 percent); and professional, scientific and technical services (5.1 percent).

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Export of goods

In 2020, 48,325 Canadian establishments exported goods with a value totaling $471.9 billion.

In 2020, Ontario had 45.8 exporters per thousand establishments, followed by Manitoba with 41.8 and Quebec with 40.3.

In 2020, SMEs contributed 43.0 percent of the total value of exported goods.

In 2020, 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 2020, there were 1.22 million employer businesses in Canada (Table 1). Of these, 1.2 million (97.9 percent) were small businesses, 22,725 (1.9 percent) were medium-sized businesses and 2,936 (0.2 percent) were large businesses.

More than half of Canada's small employer businesses are concentrated in Ontario and Quebec (439,694 and 250,724, respectively). Western Canada has a large number of small businesses, led by British Columbia, which had 187,697 small businesses as of December 2020. In the Atlantic region, Nova Scotia has the most small businesses at 29,561.

The province with the most businesses per thousand individuals aged 18 and over is Prince Edward Island (48.7), followed by Alberta (47.1). In contrast, Quebec has the smallest number of businesses per thousand individuals aged 18 and over (36.8), followed by Nova Scotia (37.1), Ontario (37.6), and Manitoba (37.9).

Table 1: Total number of employer businesses by business size and number of SMEs per 1,000 provincial population, December 2020
  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 33–10–0304–01 Canadian Business Counts, with employees, December 2020, Table 17–10–0005–01 — Population estimates on July 1, by age and sex; and ISED calculations.
Newfoundland and Labrador 16,290 98.2 278 1.7 28 0.2 16,596 38.0
Prince Edward Island 6,183 97.9 125 2.0 9 0.1 6,317 48.7
Nova Scotia 29,561 98.0 539 1.8 75 0.2 30,175 37.1
New Brunswick 24,818 98.0 453 1.8 54 0.2 25,325 39.2
Quebec 250,724 97.7 5,098 2.0 682 0.3 256,504 36.8
Ontario 439,694 97.8 8,865 2.0 1211 0.3 449,770 37.6
Manitoba 39,617 97.7 810 2.0 112 0.3 40,539 37.9
Saskatchewan 40,916 98.4 591 1.4 71 0.2 41,578 45.9
Alberta 159,021 97.9 2,992 1.8 346 0.2 162,359 47.1
British Columbia 187,697 98.3 2,885 1.5 341 0.2 190,923 44.7
Territories 4,111 97.7 89 2.1 7 0.2 4,207 45.3
Canada 1,198,632 97.9 22,725 1.9 2,936 0.2 1,224,293 39.8

Of the 1,224,293 employer businesses in Canada, 21.1 percent are in the goods-producing sector and 78.9 percent are in the services-producing sector (Table 2). Micro-enterprises (14 employees) make up 55.3 percent of Canadian businesses. By adding those businesses with 59 employees, this number increases to 73.9 percent. In other words, almost three out of four Canadian businesses have 19 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 2020
  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 33–10–0304–01 Canadian Business Counts, with employees, December 2020.
1–4 employees 149,877 57.9 527,529 54.6 677,406 55.3
5–9 employees 48,812 76.8 178,948 73.2 227,760 73.9
10–19 employees 27,738 87.5 125,458 86.2 153,196 86.4
20–49 employees 19,199 95.0 85,466 95.0 104,665 95.0
50–99 employees 7,174 97.7 28,431 98.0 35,605 97.9
Small businesses
1–99 employees
252,800 97.7 945,832 98.0 1,198,632 97.9
100–199 employees 3,562 99.1 11,778 99.2 15,340 99.2
200–499 employees 1,804 99.8 5,581 99.7 7,385 99.8
500 employees or more 513 100 2,423 100 2,936 100
Total 258,679 21.1 965,614 78.9 1,224,293 -

The following four industries — professional, scientific and technical services; construction; retail trade; and health care and social assistance — account for 568,901 businesses on their own, which represents 46.5 percent of Canadian businesses (Table 3). The other services (except public administration) industry also accounts for a significant number of businesses: 112,626 or 9.2 percent of Canadian businesses. More than half (55.7 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 85.5 percent of businesses in public administration and 85.4 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 2020
  Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500+ employees)
Total
number
Number % Number % Number %
Sources: Statistics Canada, Table 3310030401 Canadian Business Counts, with employees, December 2020.
Goods-Producing Sector 252,800 97.7 5,366 2.1 513 0.2 258,679
Agriculture, forestry, fishing and hunting
49,024 99.3 310 0.6 13 0.0 49,347
Mining, quarrying, and oil and gas extraction
7,983 95.2 318 3.8 82 1.0 8,383
Utilities
1,286 89.9 105 7.3 40 2.8 1,431
Construction
146,861 99.0 1,401 0.9 77 0.1 148,339
Manufacturing
47,646 93.1 3,232 6.3 301 0.6 51,179
Service-Producing Sector 945,832 98.0 17,359 1.8 2,423 0.3 965,614
Wholesale trade
55,205 97.8 1,138 2.0 77 0.1 56,420
Retail trade
139,148 97.6 3,376 2.4 47 0.0 142,571
Transportation and warehousing
71,176 98.4 1,021 1.4 172 0.2 72,369
Information and cultural industries
18,031 96.9 491 2.6 79 0.4 18,601
Finance and insurance
41,901 98.2 651 1.5 133 0.3 42,685
Real estate and rental and leasing
55,730 99.4 293 0.5 21 0.0 56,044
Professional, scientific and technical services
150,116 99.1 1,291 0.9 134 0.1 151,541
Management of companies and enterprises
5,665 85.4 711 10.7 256 3.9 6,632
Administrative and support, waste management and remediation services
52,050 96.7 1,566 2.9 226 0.4 53,842
Educational services
14,214 93.2 589 3.9 456 3.0 15,259
Health care and social assistance
123,070 97.3 2,969 2.3 411 0.3 126,450
Arts, entertainment and recreation
18,386 97.0 482 2.5 79 0.4 18,947
Accommodation and food services
82,197 98.4 1,300 1.6 61 0.1 83,558
Other services (except public administration)
112,048 99.5 553 0.5 25 0.0 112,626
Public administration
6,895 85.5 928 11.5 246 3.0 8,069
All Industries 1,198,632 97.9 22,725 1.9 2,936 0.2 1,224,293

1.2 How many businesses appear and disappear each year?

In 2020, the COVID-19 pandemic likely impacted business entries and exits. However, since the most recently available data on business creation and destruction are for the year 2018, these impacts are beyond the scope of this report.

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 2018, the number of businesses increased every year, except for two: in 2013 and in 2016, when more businesses disappeared (97,202 and 95,511) than were created (95,377 and 94,798)Footnote 4 as illustrated in Figure 1.Footnote 5 Over the last five years (from 2014 to 2018), on average, 97,640 businesses were created every year and 89,227 disappeared.

Figure 1: Number of businesses with at least one employee, Canada, 2001–2018

Line chart illustrating the Number of businesses with at least one employee, Canada, 2001–2018 (the long description is located below the image)
Source: Statistics Canada, Economic Analysis Division, National Accounts Longitudinal Microdata File.
Description of Figure 1
Number of businesses with at least one employee, Canada, 2001–2018
Number of businesses with at least one employee, Canada, 2001–2018
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
2018 1,133,493
 
 

As illustrated in Figure 2, throughout the 20012018 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 had an overall downward trend over the last five years, declining from 8.2 percent in 2014 to 7.7 percent in 2018. Over the last five observed years, the average birth rate in the goods-producing sector was 7.9 percent, compared with 9.0 percent in the services-producing sector. On average, every year between 2014 and 2018, 23,433 businesses were created and 21,550 businesses disappeared in the goods-producing sector, while in the services-producing sector, 74,207 businesses were created and 67,678 businesses closed.

This variation between birth rates for these two sectors can be explained in part 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 2014 and 2018, the birth rate was 11.1 percent, 3.5 percent, and 1.7 percent for businesses with 14, 519, 2099 employees respectively.

Figure 2: Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2018

Line chart illustrating the Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2018 (the long description is located below the image)
Source: Statistics Canada, Economic Analysis Division, National Accounts Longitudinal Microdata File.
Description of Figure 2
Birth rate for enterprises with one or more employees, Canada and main sectors, 2001–2018
 
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%
2018 9.0% 7.7% 9.5%
 
 

Figure 3: Birth rate by initial business size, Canada, 2001–2018

Line chart illustrating the Birth rate by initial business size, Canada, 2001–2018 (the long description is located below the image)
Source: Statistics Canada, Economic Analysis Division, National Accounts Longitudinal Microdata File.
Description of Figure 3
Birth rate by initial business size, Canada, 2001–2018
Birth rate by initial business size, Canada, 2001–2018
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%
2018 11.5% 3.4% 1.3%
 
 

The vast majority of businesses had 14 employees when they began operations. Of the 97,640 businesses created on average annually from 20142018, 90.0 percent (or 87,881 businesses) had 14 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, 519 and 2099 employees. Of the average 89,228 annual closures, 92.2 percent, 7.5 percent, and 0.3 percent were businesses with 14, 519, and 2099 employees, respectively.

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

Businesses in the goods-producing and services-producing sectors showed similar survival rates over the course of the first three years (T+1, T+2 and T+3) after their creation (T+0) (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), 70.1 percent of businesses in the goods-producing sector were still operating, compared with 67.3 percent of businesses in the services-producing sector.

After 10 years (T+10), the business survival rate for the goods-producing sector was 49.6 percent, compared with 44.6 percent for the services-producing sector. Finally, 33.5 percent of businesses in the goods-producing sector and 28.0 percent of business in the services-producing sector were still active 17 years (T+17) 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, Economic Analysis Division, 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%
T+17 28.6% 31.3% 38.3%
 
 

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, 62.5 percent were still active after 5 years (T+5), 43.5 percent were still active after 10 years (T+10), and 28.6 percent were still active after 17 years (T+17), compared with businesses that began operations with a workforce of 20–99 employees, of which 73.9 percent were still active after 5 years (T+5), 55.1 percent were still active after 10 years (T+10) and 38.3 percent were still active after 17 years (T+17).

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, Economic Analysis Division, 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%
T+17 28.6% 31.3% 38.3%
 
 

1.4 Gender-based differences in survival and birth rates

Majority male-owned businesses showed slightly higher survival rates than majority female-owned businesses over the course of the thirteen years after their creation.Footnote 6 However, businesses owned equally by males and females had the highest survival rates over the period observed.Footnote 7 After five years (T+5), 77.2 percent of majority female-owned businesses were still operating, compared with 79.8 percent of majority male-owned businesses, and 84.9 percent of equally-owned businesses.

After 10 years (T+10), the business survival rate for the majority female-owned businesses was 57.6 percent, compared with 61.9 percent for majority male-owned businesses, and 68.6 percent for equally-owned businesses . Finally, 47.9 percent of businesses majority owned by females, 52.8 percent of businesses majority owned by male and 60.2 percent of equally-owned businesses were still active 13 years (T+13) after their creation (Figure 6).Footnote 8

Figure 6: Survival rate by gender majority ownership of businesses with one or more employees, Canada

Line chart illustrating the Survival Rate by Initial Business Size (the long description is located below the image)
Source: Statistics Canada, Economic Analysis Division, National Accounts Longitudinal Microdata File.
Description of Figure 6
Survival rate by gender majority ownership of businesses with one or more employees, Canada
 
Survival rate by initial business size, Canada
Number of years since the company's entry Majority male-owned Majority female-owned Equally owned
T 0 100.0% 100.0% 100.0%
T+1 98.3% 98.4% 99.0%
T+2 94.3% 93.8% 96.3%
T+3 89.2% 88.1% 92.5%
T+4 84.5% 82.5% 88.8%
T+5 79.8% 77.2% 84.9%
T+6 75.6% 72.6% 81.1%
 
Survival rate by gender majority ownership of businesses with one or more employees, Canada
Number of years since the company's entry Majority male-owned Majority female-owned Equally owned
T+7 71.8% 68.2% 77.6%
T+8 68.2% 64.6% 74.3%
T+9 65.1% 60.9% 71.5%
T+10 61.9% 57.6% 68.6%
T+11 58.9% 54.0% 65.7%
T+12 55.8% 51.0% 62.5%
T+13 52.8% 47.9% 60.2%
 
 

As shown in Figure 7, throughout the 20052018 period, the business birth rate was lower for majority male-owned businesses than for the majority female-owned businesses.Footnote 9 Over the last five years observed, the average birth rate for majority female-owned businesses was 10.7 percent, compared with 8.7 percent for majority male-owned businesses. On average, every year between 2014 and 2018, 10,902 businesses were created and 8,942 businesses disappeared in majority female-owned businesses, while in majority male-owned businesses, 38,924 businesses were created and 33,892 businesses closed.Footnote 10

Figure 7: Birth rate by gender majority ownership of businesses with one or more employees, Canada

Line chart illustrating the birth rate by gender majority ownership of businesses with one or more employees, Canada (the long description is located below the image)
Source: Statistics Canada, Economic Analysis Division, National Accounts Longitudinal Microdata File.
Description of Figure 7
Survival rate by gender majority ownership of businesses with one or more employees, Canada
 
Birth rate by gender majority ownership of businesses with one or more employees, Canada
Number of years since the company's entry Majority male-owned Majority female-owned Equally owned
2005 9.8% 13.0% 13.0%
2006 9.0% 11.6% 12.2%
2007 8.3% 10.7% 11.3%
2008 9.0% 12.3% 12.0%
2009 8.3% 11.6% 10.4%
2010 8.4% 11.2% 10.5%
2011 8.8% 11.3% 10.8%
 
Birth rate by gender majority ownership of businesses with one or more employees, Canada
Number of years since the company's entry Majority male-owned Majority female-owned Equally owned
2012 9.1% 11.3% 10.8%
2013 9.0% 11.4% 10.4%
2014 9.0% 11.1% 10.3%
2015 8.7% 10.8% 9.5%
2016 8.6% 10.6% 9.0%
2017 8.7% 10.9% 9.1%
2018 8.2% 10.0% 8.2%
 
 

2. Employment

2.1 How many people were employed in Canada in 2020?

In 2020, approximately 15.3 million individuals were employedFootnote 11 in Canada. Of this number, 74.8 percent worked in the private sectorFootnote 12 and 25.1 percent worked in the public sectorFootnote 13 (Table 4). In 2020, the COVID-19 pandemic had significant impact on 2020 employment statistics. The effect of the pandemic on employment is discussed in section 2.3.

Table 4: Number of individuals employed in the private and public sectors, by business size, 2020
  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 7,718.9 67.7 2,352.0 20.6 10,070.9 88.3 1,335.4 11.7 11,406.2
% Private sector 79.1  72.8  77.6  59.2  74.8
Public sector 2,028.5 53.1 877.6 23.0 2,906.1 76.0 917.3 23.9 3,823.5
% Public sector 20.8  27.1  22.3  40.7  25.1
Total 9,747.3 64.0 3,229.6 21.2 12,977.0 85.2 2,252.7 14.8 15,229.7

The distribution of the number of people employed according to business size varies considerably between the private sector and the public sector. In 2020, 88.3 percent of employed individuals in the private sector worked for SMEs, compared with 76.0 percent of those employed by public organizations of the same size.

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

In 2020, private sector businesses employed 11.4 million people in Canada. The majority of private sector employees worked for small businesses, specifically 67.7 percent (7.7 million), compared with 20.6 percent (2.3 million) for medium-sized businesses and 11.7 percent (1.3 million) for large businesses (Figure 8). In total, SMEs employed 88.3 percent of the private sector workforce (10.0 million individuals), highlighting the important role SMEs play in employing Canadians.

Figure 8: Distribution of private sector employees by business size, 2020

Pie chart illustrating the distribution of private sector employees by business size, 2020 (the long description is located below the image)
Sources: Statistics Canada, Labour Force Survey; and ISED calculations.
Description of Figure 8
Distribution of private sector employees by business size, 2020
Business size Distribution in percentage
Small businesses (1–99 employees) 67.7%
Medium-sized businesses (100–499 employees) 20.6%
Large businesses (500 + employees) 11.7%
 

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 95.9 percent and 95.6 percent, respectively (Table 5). In contrast, this percentage is lowest in Quebec and Ontario at 86.1 and 86.2 percent. Total private sector employment in Ontario and Quebec amounts to 7,163,500 jobs, which represents 62.8 percent of Canadian private sector employment.

Table 5: Total private sector employment by province and business size, 2020
  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 100.1 76.9 24.3 18.7 95.6 5.7 4.4 130.1
Prince Edward Island 34.4 78.8 7.5 17.2 95.9 1.8 4.1 43.7
Nova Scotia 201.9 74.7 49.8 18.4 93.2 18.4 6.8 270.2
New Brunswick 155.4 71.0 45.9 21.0 92.0 17.6 8.0 218.9
Quebec 1,685.0 64.3 571.2 21.8 86.1 365.2 13.9 2,621.5
Ontario 2,915.8 64.2 999.6 22.0 86.2 626.6 13.8 4,542.0
Manitoba 268.4 70.5 73.3 19.2 89.8 38.9 10.2 380.6
Saskatchewan 239.2 77.7 48.4 15.7 93.5 20.1 6.5 307.8
Alberta 973.5 71.9 247.3 18.3 90.1 133.8 9.9 1,354.6
British Columbia 1,145.1 74.5 284.7 18.5 93.0 107.1 7.0 1,536.9
Canada 7,718.9 67.7 2,352.0 20.6 88.3 1,335.4 11.7 11,406.3

Distribution of employment by business size varies across industries. As shown in Table 6, SMEs account for over 90 percent of employment in seven industries: agriculture (98.7 percent); accommodation and food services (98.5 percent); other services (except public administration) (98.2 percent); construction (95.9 percent); wholesale and retail trade (95.3 percent); business, building and other support services (91.1 percent); and professional, scientific and technical services (90.0 percent).

Table 6: Total private sector employment by industrial sector and business size, 2020
  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 1,851.0 61.7 757.5 25.2 86.9 391.5 13.1 3,000.0
Agriculture, forestry, fishing and hunting
111.2 88.5 12.9 10.3 98.7 1.6 1.3 125.7
Mining, quarrying, and oil and gas extraction
126.9 48.1 62.9 23.8 71.9 74.1 28.1 263.8
Utilities
6.2 41.8 4.2 28.4 70.2 4.4 29.8 14.9
Construction
829.5 82.8 131.0 13.1 95.9 41.3 4.1 1001.8
Manufacturing
777.2 48.8 546.4 34.3 83.1 270.1 16.9 1593.7
Services-Producing Sector 5,867.9 69.8 1,594.6 19.0 88.8 943.9 11.2 8,406.3
Wholesale and retail trade
1,858.3 76.9 443.6 18.4 95.3 114.2 4.7 2416.0
Transportation and warehousing
337.2 57.6 149.3 25.5 83.1 98.8 16.9 585.3
Finance, insurance, real estate and leasing
521.1 55.1 208.4 22.0 77.2 215.9 22.8 945.4
Professional, scientific and technical services
690.3 64.1 278.6 25.9 90.0 108.1 10.0 1,077.0
Business, building and other support services
367.8 73.7 87.0 17.4 91.1 44.4 8.9 499.2
Educational services
62.6 58.7 20.5 19.2 77.9 23.5 22.1 106.6
Health care and social assistance
513.9 53.6 200.5 20.9 74.5 244.2 25.5 958.6
Information, culture and recreation
278.3 60.7 107.9 23.5 84.2 72.7 15.8 458.9
Accommodation and food services
782.1 91.8 56.7 6.7 98.5 12.9 1.5 851.7
Other services (except public administration)
456.3 89.9 42.1 8.3 98.2 9.1 1.8 507.5
Total 7,718.9 67.7 2,352.0 20.6 88.3 1,335.4 11.7 11,406.3

The total number of employees working for small businesses in 2020 was, in order of magnitude, wholesale and retail trade (1.86 million); construction (0.83 million); accommodation and food services (0.78 million) and manufacturing (0.78 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 26.3 percent of total employment and 24.0 percent of employment in small businesses.

Accommodation and food services had the highest share of employees working in small businesses (1–99 employees), specifically 782,100 out of the total of 851,700 employees in the industry, or approximately 91.8 percent.

2.3 How much did employment shrink between 2019 and 2020?

In 2020, the COVID-19 pandemic posed significant challenges to the Canadian economy. The resulting economic contraction significantly impacted 2020 employment statistics. In fact, between 2019 and 2020, total net employment change in the private sector was -878,700, which corresponds to a negative annual growth rate of −7.2 percent (Table 7). The net employment change among small businesses was −740,800, compared with −68,700 among medium-sized businesses, or an annual growth rate of −8.8 percent and −2.8 percent, respectively. Consequently, the contribution to net employment change by small businesses was 84.3 percent and 7.8 percent by medium-sized businesses. SMEs were responsible for 92.1 percent of net employment change over the last year (Figure 9).

Table 7: Annual growth rate and contribution to net employment change in the private sector by province and business size, 2019–20
Province Small businesses
(1–99 employees)
Medium-sized businesses
(100499 employees)
Large businesses
(500+ employees)
Total
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
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 8.3 9.1 80.3 1.8 0.4 3.9 31.8 2.7 23.6 8.0 11.3 100
Prince Edward Island 12.8 5.1 140.9 17.1 1.1 30.4 26.8 0.4 10.5 7.6 3.6 100
Nova Scotia 7.4 16.1 69.5 5.7 3.0 13.1 17.9 4.0 17.4 7.9 23.1 100
New Brunswick 4.0 6.5 52.5 8.1 4.0 32.8 9.3 1.8 14.7 5.3 12.3 100
Quebec 9.3 173.7 97.3 1.8 10.2 5.7 3.9 14.9 8.4 6.4 178.5 100
Ontario 7.1 223.3 77.4 3.4 35.1 12.2 4.6 30.2 10.5 6.0 288.6 100
Manitoba 5.5 15.6 68.3 6.9 5.4 23.7 4.5 1.8 8.0 5.7 22.9 100
Saskatchewan 7.7 19.9 97.4 1.8 0.9 4.3 1.7 0.3 1.7 6.2 20.4 100
Alberta 10.8 117.6 84.5 7.6 20.4 14.7 0.8 1.1 0.8 9.3 139.1 100
British Columbia 11.9 154.1 86.1 3.9 11.6 6.5 11.0 13.3 7.4 10.4 178.9 100
Canada 8.8 740.8 84.3 2.8 68.7 7.8 4.9 69.1 7.9 7.2 878.7 100

Between 2019 and 2020, private sector employment decreased in all the provinces. Among small businesses, employment decreased in all provinces, with Prince Edward Island posting the highest negative annual growth (−12.8 percent). Employment decreased across all size categories in six provinces: Nova Scotia, New Brunswick, Ontario, Manitoba, Alberta and British Columbia. British Columbia posted the greatest negative annual growth (−10.4 percent) in private sector employment over the last year.

Over the 201920 period, 82.3 percent of total net employment change was attributable to businesses in the services-producing sector; while 17.7 percent was attributable to businesses in the goods-producing sector (Table 8).

Figure 9: Contribution to net employment change of private sector businesses by business size, 201920

Pie chart illustrating the Contribution to net employment change of private sector businesses by business size, 201920 (the long description is located below the image)
Source: Statistics Canada, Entrepreneurship Indicators Database.
Description of Figure 9
Contribution to net employment change of private sector businesses by business size, 201920
Business size Distribution in percentage
Small businesses (1–99 employees) 84.3%
Medium-sized businesses (100–499 employees) 7.8%
Large businesses (500 + employees) 7.9%

The most significant net employment changes observed in the services-producing sector were the decreases in accommodation and food services (−258,700) and in wholesale and retail trade (−141,600). These two industries alone accounted for 55.3 percent of the net change in the services-producing sector. The contribution to net employment change by SMEs in these two industries was 99.0 percent for the accommodation and food services sector and 98.2 percent for wholesale and retail trade.

The manufacturing, the construction and the mining, quarrying, and oil and gas extraction industries saw the most significant negative net employment changes in the goods-producing sector: −75,200, −46,800 and −22,200 jobs, respectively.

Table 8: Annual growth rate and contribution to net employment change by industrial sector and business size, 2019–20
  Small businesses
(1–99 employees)
Medium-sized businesses
(100499 employees)
Large businesses
(500+ employees)
Total
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
NECFootnote **
(thousands)
CECFootnote ***
(%)
AGRFootnote *
(%)
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 3.2 61.3 39.5 7.2 58.5 37.7 8.3 35.5 22.8 4.9 155.3 100
Agriculture, forestry, fishing and hunting
4.3 5.0 67.3 8.8 1.2 16.7 42.9 1.2 16.0 5.6 7.5 100
Mining, quarrying, and oil and gas extraction
8.5 11.8 53.3 6.0 4.0 18.2 7.9 6.3 28.6 7.8 22.2 100
Utilities
25.1 2.1 56.4 15.2 0.8 20.5 16.1 0.9 23.1 19.9 3.7 100
Construction
2.8 23.8 50.9 9.5 13.7 29.3 18.3 9.3 19.8 4.5 46.8 100
Manufacturing
2.3 18.6 24.8 6.6 38.8 51.6 6.2 17.8 23.7 4.5 75.2 100
Services-Producing Sector 10.4 679.5 93.9 0.6 10.3 1.4 3.4 33.6 4.7 7.9 723.4 100
Wholesale and retail trade
6.7 134.4 94.9 1.0 4.7 3.3 2.2 2.5 1.8 5.5 141.6 100
Transportation and warehousing
9.0 33.2 46.8 7.3 11.8 16.6 20.8 26.0 36.6 10.8 71.0 100
Finance, insurance, real estate and leasing
1.8 9.6 28.4 11.1 20.8 61.6 11.7 22.6 66.7 3.7 33.8 100
Professional, scientific and technical services
0.1 0.8 2.9 13.6 33.3 125.9 6.6 7.6 28.7 2.5 26.4 100
Business, building and other support services
14.5 62.4 85.9 13.2 13.2 18.2 7.2 3.0 4.1 12.7 72.7 100
Educational services
18.6 14.3 78.3 4.4 1.0 5.2 11.3 3.0 16.5 14.6 18.2 100
Health care and social assistance
13.5 80.5 79.1 0.5 1.1 1.0 7.6 20.1 19.8 9.6 101.7 100
Information, culture and recreation
14.3 46.5 89.5 4.7 5.3 10.2 0.2 0.2 0.3 10.2 52.0 100
Accommodation and food services
22.8 231.1 89.3 30.6 25.0 9.7 16.6 2.6 1.0 23.3 258.7 100
Other services (except public administration)
13.0 68.3 100.7 5.2 2.3 3.4 44.5 2.8 4.1 11.8 67.8 100
Total 8.8 740.8 84.3 2.8 68.7 7.8 4.9 69.1 7.9 7.2 878.7 100

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 2017 study,Footnote 14 high-growth firmsFootnote 15 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 10 presents percentages of high-growth firms across different industries, between 2015 and 2018, 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: mining, quarrying, and oil and gas extraction (11.3 percent); construction (10.3 percent); and manufacturing (8.0 percent). In the services-producing sector, industries with the largest share of high-growth firms are information and cultural industries (11.0 percent); professional, scientific and technical services (8.4 percent); and administrative and support, waste management, and remediation services (8.3 percent). Overall, the share of high-growth firms based upon revenue is just under double the share based upon employment (5.8 percent versus 3.3 percent).

Figure 10: Percentage of high-growth firms by industry, based upon revenue and employment growth, 20152018

horizontal bar chart illustrating the Percentage of high-growth firms by industry, based upon revenue and employment growth, 20152018 (the long description is located below the image)
Source: Statistics Canada, Entrepreneurship Indicators Database.
Description of Figure 10
Percentage of high-growth firms by industry, based upon revenue and employment growth, 20152018
 
Percentage of high-growth firms by industry, based upon revenue and employment growth, 20152018
Industry sector Revenue Employment
Total 3.3% 5.8%
Accommodation and food services 2.0% 2.9%
Health care and social assistance 2.2% 3.3%
Other services (except 91 Public administration) 1.9% 3.6%
Arts, entertainment and recreation 2.7% 3.5%
Retail trade 2.5% 3.6%
Educational services 3.4% 4.5%
Utilities 4.8% 4.8%
Transportation and warehousing 4.3% 7.2%
Agriculture, forestry, fishing and hunting 3.7% 6.2%
Wholesale trade 3.4% 6.8%
 
Percentage of high-growth firms by industry, based upon revenue and employment growth, 20152018
Industry sector Revenue Employment
Real estate and rental and leasing 2.8% 6.7%
Finance and insurance 3.9% 7.8%
Management of companies and enterprises 2.7% 6.2%
Administrative and support, waste management and remediation services 5.0% 8.3%
Mining, quarrying and oil and gas extraction 6.8% 11.3%
Professional, scientific and technical services 5.1% 8.4%
Manufacturing 3.6% 8.0%
Construction 4.8% 10.3%
Information and cultural industries 6.7% 11.0%
 
 

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 2020, out of the 48,325 establishments that exported goods, 42.6 percent were operating in Ontario (Table 9). Ontario had the highest concentration of exporters at 45.8 exporters per thousand establishments. The lowest concentration of exporters was found in the territories and Newfoundland and Labrador, at 15.7 and 17.2 exporters per thousand establishments, respectively.

In Canada, the average value of exports per establishment was $9.77 million in 2020. This includes establishments located in Newfoundland and Labrador, which had the highest average value of exports, at slightly more than $25.5 million per establishment, followed by the Territories and Alberta at $20.1 million and $18.3 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, 2020
  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 285 0.6 17.2 7.3 1.5 25.5
Prince Edward Island 235 0.5 37.2 1.6 0.3 6.7
Nova Scotia 972 2.0 32.2 4.9 1.0 5.0
New Brunswick 772 1.6 30.5 10.2 2.2 13.3
Quebec 10,344 21.4 40.3 82.6 17.5 8.0
Ontario 20,578 42.6 45.8 184.3 39.1 9.0
Manitoba 1,696 3.5 41.8 24.4 5.2 14.4
Saskatchewan 1,348 2.8 32.4 18.7 4.0 13.9
Alberta 5,149 10.7 31.7 94.3 20.0 18.3
British Columbia 6,880 14.2 36.0 42.2 8.9 6.1
Territories 66 0.1 15.7 1.3 0.3 20.1
Canada 48,325 - 39.5 471.9 - 9.8

4.2 How do SMEs contribute to Canada's exports?

In 2020, Canada's exports of goods totaled $471.9 billion, of which 43.0 percent was attributable to SMEs (Figure 11). A total of 48,325 Canadian establishments exported goods, the vast majority of which were SMEs (97.5 percent).

Figure 11: Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2020

Bar chart illustrating the Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2020 (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 11
Contribution of SMEs to the export of goods by number of exporters and value of exports, Canada, 2020
Indicator Small businesses
(199 employees)
Medium-sized businesses
(100499 employees)
Large businesses
(500 + employees)
Value 19.9% 23.1% 57.0%
Number of exporters 90.1% 7.4% 2.5%
 

While virtually all Canadian industrial sectors export goods, four in particular account for over 90 percent of the total value of goods exported in 2020 (Figure 12). Manufacturing accounted for 58.7 percent of the total value of goods exported in 2020, followed by wholesale trade (12.6 percent), management of companies and enterprises (12.0 percent) and mining, quarrying, and oil and gas extraction (9.1 percent).

The contribution of SMEs to exports of goods varies by industrial sector (Figure 13). In 2020, the contribution of SMEs to the total value of goods exported was 75.0 percent in wholesale trade and 63.7 percent in "other industries." At the other end of the scale, the contribution of SMEs to the value of exports of goods was only 7.5 percent in management of companies and enterprises and 40.2 percent in manufacturing.

Figure 12: Main industries involved in the export of goods by value of exports, Canada, 2020

Bar chart illustrating the Main industries involved in the export of goods by value of exports, Canada, 2020 (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 12
Main industries involved in the export of goods by value of exports, Canada, 2020
Industry Sector Percentage distribution by value of exports
Manufacturing 58.7%
Wholesale trade 12.6%
Management of companies and enterprises 12.0%
Mining, quarrying and oil and gas extraction 9.1%
Other industries 7.5%
 

Figure 13: Contribution of SMEs to the total value of exports by industry, Canada, 2020

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 13
Contribution of SMEs to the total value of exports by industry, Canada, 2020
Industry Sector Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
Manufacturing 12.7% 27.5% 59.8%
Wholesale trade 58.3% 16.7% 25.0%
Management of companies and enterprises 4.0% 3.5% 92.5%
Mining, quarrying and oil and gas extraction 10.6% 35.8% 53.6%
Other industries 48.3% 15.4% 36.3%
 

4.3 What are Canada's main export destinations?

The COVID-19 pandemic has posed important challenges to exporting for Canadian businesses. In fact, between 2019 and 2020, the value of goods exported decreased by -11.5 percent, to almost $472 billion (Table 10). Exports to the United States, the main destination for Canadian goods exports, declined by -14.5 percent.

From 2019 to 2020, 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 78.8 percent to 74.6 percent;

for medium-sized businesses, the decrease was from 68.7 percent to 68.2 percent. This percentage also decreased for large businesses, with exports of goods to the United States by large businesses dropping from 75.4 percent to 73.2 percent (Table 11).

Of the 20 main destinations for exports of Canadian goods in 2020, 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, with 70.8 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 six other countries among the 20 main destinations: Brazil (66.3 percent); Australia (61.0 percent); Norway (56.5 percent); Indonesia (52.9 percent); Taiwan (51.1 percent) and India (50.9 percent).

In 2020, the second-most significant destination for goods produced by small businesses was China, followed by Japan. The United Kingdom and China were the second- and third-most significant destinations for medium-sized businesses, respectively.

Table 10: Twenty main destinations for exports of Canadian goods, 2019 and 2020
  2019 2020
  Contribution (%)   Contribution (%)
Rank Value
($ billions)
Small businesses Medium-sized businesses Large businesses Rank Value
($ billions)
AGRFootnote *
2019–20 (%)
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 1 398.2 20.6 19.4 60.0 1 341.4 14.3 20.5 21.8 57.7
China 2 21.6 23.1 25.0 51.8 2 24.2 12.1 19.1 20.4 60.5
United Kingdom 3 19.1 5.6 63.6 30.8 3 19.3 1.4 3.5 67.3 29.1
Japan 4 12.1 15.5 18.1 66.4 4 12.1 0.1 14.7 11.6 73.7
Mexico 5 6.8 11.7 24.3 64.0 5 5.8 14.4 12.5 24.0 63.5
Germany 6 5.5 12.3 15.3 72.4 6 5.5 0.2 14.7 12.6 72.7
Netherlands 8 4.8 7.8 10.8 81.4 7 4.7 3.2 14.3 16.1 69.6
South Korea 7 5.3 27.9 18.3 53.8 8 4.6 13.5 30.8 13.9 55.3
Italy 12 3.0 8.2 17.2 74.7 9 3.6 19.6 7.3 19.5 73.3
India 9 4.5 16.7 19.6 63.6 10 3.6 20.7 21.0 29.9 49.1
France 11 3.3 13.5 19.5 66.9 11 3.4 5.5 12.0 16.3 71.7
Norway 15 2.1 2.8 5.1 92.1 12 2.4 16.2 53.8 2.7 43.5
Belgium 13 2.9 11.7 15.6 72.8 13 2.4 17.2 16.3 16.1 67.6
Brazil 19 1.9 8.6 57.7 33.8 14 2.0 8.3 10.0 56.3 33.6
Australia 17 1.9 25.1 38.7 36.1 15 1.8 5.8 24.6 36.4 39.0
Indonesia 18 1.9 12.5 30.7 56.8 16 1.7 7.5 12.4 40.5 47.1
Switzerland 22 1.3 11.5 7.1 81.3 17 1.7 27.3 24.1 6.5 69.4
Hong Kong 10 3.7 18.1 7.2 74.7 18 1.7 54.3 32.3 14.2 53.6
Taiwan 16 1.9 28.0 9.3 62.7 19 1.6 13.7 39.0 12.1 48.9
United Arab Emirates 23 1.3 31.8 14.0 54.2 20 1.6 21.2 25.4 21.7 52.8
Rest of the world - 30.3 20.8 19.0 60.2 - 26.9 11.3 26.8 20.8 52.4
Total - 533.3 19.5 21.1 59.4 - 471.9 11.5 19.9 23.1 57.0
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, 2019 and 2020
  2019 2020
  Contribution (%)   Contribution (%)
Rank Value
($ billions)
Small businesses Medium-sized businesses Large businesses Rank Value
($ billions)
AGRFootnote *
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 1 398.2 78.8 68.7 75.4 1 341.4 14.3 74.6 68.2 73.2
China 2 21.6 4.8 4.8 3.5 2 24.2 12.1 4.9 4.5 5.4
United Kingdom 3 19.1 1.0 10.8 1.9 3 19.3 1.4 0.7 12.0 2.1
Japan 4 12.1 1.8 1.9 2.5 4 12.1 0.1 1.9 1.3 3.3
Mexico 5 6.8 0.8 1.5 1.4 5 5.8 14.4 0.8 1.3 1.4
Germany 6 5.5 0.6 0.7 1.3 6 5.5 0.2 0.9 0.6 1.5
Netherlands 8 4.8 0.4 0.5 1.2 7 4.7 3.2 0.7 0.7 1.2
South Korea 7 5.3 1.4 0.9 0.9 8 4.6 13.5 1.5 0.6 0.9
Italy 12 3.0 0.2 0.5 0.7 9 3.6 19.6 0.3 0.6 1.0
India 9 4.5 0.7 0.8 0.9 10 3.6 20.7 0.8 1.0 0.7
France 11 3.3 0.4 0.6 0.7 11 3.4 5.5 0.4 0.5 0.9
Norway 15 2.1 0.1 0.1 0.6 12 2.4 16.2 1.4 0.1 0.4
Belgium 13 2.9 0.3 0.4 0.7 13 2.4 17.2 0.4 0.4 0.6
Brazil 19 1.9 0.2 1.0 0.2 14 2.0 8.3 0.2 1.0 0.3
Australia 17 1.9 0.5 0.6 0.2 15 1.8 5.8 0.5 0.6 0.3
Indonesia 18 1.9 0.2 0.5 0.3 16 1.7 7.5 0.2 0.6 0.3
Switzerland 22 1.3 0.1 0.1 0.3 17 1.7 27.3 0.4 0.1 0.4
Hong Kong 10 3.7 0.6 0.2 0.9 18 1.7 54.3 0.6 0.2 0.3
Taiwan 16 1.9 0.5 0.2 0.4 19 1.6 13.7 0.7 0.2 0.3
United Arab Emirates 23 1.3 0.4 0.2 0.2 20 1.6 21.2 0.4 0.3 0.3
Rest of the world - 30.3 6.1 5.1 5.8 - 26.9 11.3 7.7 5.1 5.2
Total - 533.3 100.0 100.0 100.0 - 471.9 11.5 100.0 100.0 100.0

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 compared to, for example, revenue, number of businesses or even employment. Statistics Canada recently produced estimates of GDP generated by the private sector, by business size for the 20082018 period.Footnote 16

In 2020, the COVID-19 pandemic likely significantly impacted the contributions to GDP by businesses of different sizes. However, since the most recently available data on GDP by business size are for the year 2018, these impacts are beyond the scope of this report. Based on Statistics Canada estimates, the contribution to GDP by business size varies slightly throughout the 20082018 period (Figure 14). Large firms' contribution decreased slightly between 20082018, with a more significant drop between 2014 and 2016 followed by an uptick between 20162018. In contrast, small firms' contribution trended up slightly over the 20082018 period with the more significant uptick between 20142016 followed by a decrease thereafter. Medium-sized firms' contribution to GDP trended up slightly between 2008 and 2018.

More recently, from 2014 to 2018, the average contribution of small businesses to GDP was 37.8 percent, the contribution of medium-sized businesses was 14.1 percent and the contribution of large businesses was 48.1 percent. In other words, SMEs accounted for more than 50.0 percent of the value added to the country's output.

Figure 14: Contribution to GDP by business size, Canada, 20082018

Line chart illustrating the Contribution to GDP by business size, Canada, 20082018 (the long description is located below the image)
Source: Statistics Canada.
Description of Figure 14
Contribution to GDP by business size, Canada, 20082018
 
Contribution to GDP by business size, Canada, 20082018
Year Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
2008 36.5% 12.0% 51.5%
2009 38.4% 12.5% 49.0%
2010 36.8% 12.3% 50.9%
2011 36.1% 13.4% 50.5%
2012 36.6% 13.0% 50.4%
2013 36.7% 13.5% 49.8%
2014 36.6% 13.4% 50.0%
 
Contribution to GDP by Business Size, Canada, 20082018
Year Small businesses
(1–99 employees)
Medium-sized businesses
(100–499 employees)
Large businesses
(500 + employees)
2015 39.1% 14.8% 46.1%
2016 39.1% 14.3% 46.6%
2017 36.8% 13.6% 49.5%
2018 37.5% 14.4% 48.0%
 
 

The contribution of SMEs to GDP varied across industrial sectors (Table 12). The average contribution of SMEs to GDP over the 20142018 period was 52.3 percent in the goods-producing sector, compared with 51.8 percent in the services-producing sector.

In the goods-producing sector, the average contribution of SMEs to GDP was 92.6 percent in agriculture and 80.9 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 2014–2018
  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 36.0 16.3 52.3 47.7
Agriculture, forestry, fishing and hunting
84.7 7.9 92.6 7.4
Mining, quarrying, and oil and gas extraction
17.4 16.5 33.9 66.1
Utilities
1.3 1.1 2.4 97.6
Construction
66.1 14.8 80.9 19.1
Manufacturing
25.2 21.5 46.7 53.3
Services-Producing Sector 38.3 13.6 51.8 48.2
Wholesale trade
36.6 18.8 55.4 44.6
Retail trade
44.2 11.6 55.8 44.2
Transportation and warehousing
29.6 11.4 41.0 59.0
Finance, insurance, real estate and leasing
21.8 10.1 32.0 68.0
Professional, scientific and technical services
50.7 14.6 65.3 34.7
Business, building and other support services
39.3 15.9 55.2 44.8
Educational services
75.5 14.2 89.6 10.4
Health care and social assistance
79.8 5.8 85.7 14.3
Information, culture and recreation
13.8 10.5 24.3 75.7
Accommodation and food services
62.8 17.0 79.8 20.2
Other services (except public administration)
75.0 10.0 85.0 15.0
Total 37.8 14.1 51.9 48.1

In the services-producing sector, the greatest contributions of SMEs to GDP were observed in the educational services (89.6 percent), health care and social assistance (85.7 percent), and other services except public administration (85.0 percent) sectors. SMEs in the information, culture and recreation (24.3 percent), finance, insurance, real estate and leasing (32.0 percent), and transportation and warehousing (41.0 percent) industries had, on average, lower contributions to GDP.