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Small Business Canada 2020

  • November 4, 2021
  • Written by Community Futures Meridian

Here is a quick look at some of the key findings from Innovation, Science and Economic Development Canada’s Key Small Business Statistics 2020 report. The statistics shown below will give you insight into small business Canada that will be useful in your strategic planning for 2022 and beyond. Please note that the effects of COVID-19 will not show up until next year’s report.

Small and medium-sized enterprises in Canada are growing, albeit slowly. Although from 2013 to 2017, we lost 90,600 businesses annually, we created 96,580. The goods-producing sector enjoyed better survival rates than the services-producing sector. On average, 35.1 percent of the former survived at least 16 years, dropping to 29.6 percent for the latter.

At the end of 2019, Canada had 1.23 million businesses employing people. Almost 98 percent of these businesses were classified as small (1 – 99 employees). Medium-sized companies (100 – 499 employees) accounted for 1.9 percent, with less than 3,000 businesses employing 500 or more people. Digging a little deeper, it is interesting to note that almost 55 percent of Canadian firms are micro-enterprises employing only one to four people.

Over half of Canada’s small business employers are in Ontario and Quebec. In western Canada, British Columbia leads the way with close to 190,000 small businesses. In the Maritimes, Nova Scotia has the largest number of small businesses, at close to 30,000.

If we look at what sectors those 1.23 million businesses are in, we find that a little over 20 percent are in the goods-producing sector, and almost 80 percent are in the services sector. Breaking that down, Innovation, Science and Economic Development Canada report that just five industries (construction; retail trade; professional; scientific and technical; and other services [discounting public administration]) account for 45 percent of businesses. There is one other significant sector making up around 10 percent of Canadian companies: the healthcare and social assistance industry.

Small businesses were the most significant employers overall, accounting for 68.8 percent of the total private labour force, employing 8.4 million people. Medium-sized businesses employed 2.4 million and large businesses 1.4 million people. The small business sector was responsible for 35.8 percent of the net employment growth in the private sector.

So, where is the growth happening? Based on employment growth, the largest concentration of high-growth firms between 2014 – 2017 was in information and cultural industries, mining, quarrying, oil and gas extraction, waste management and remediation services, and finally, administrative support.

Earlier, we talked about survival rates for the different sectors, but what about new businesses? Where are they coming from? According to the report, over the last five years, the “birth rate” for new business was almost equally divided between the goods-producing and services-producing sectors at a fraction over 8 percent for the former and 9 percent for the latter.

In terms of employment, in 2019, approximately 16 million people were employed in Canada, with around three-quarters working in the private sector. Not surprisingly, almost 70 percent of those employees worked in small businesses. Over the last five years, private-sector employment has grown in every province save for Newfoundland and Labrador. The most significant employment growth in the services sector was in professional, scientific, and technical services and healthcare and social assistance.

To read the full report and download a PDF version, visit: https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03126.html#forew

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