Small Business Statistics: Insights for Canadian Entrepreneur

ByLaunchKO
Illustration of two characters working on laptops, with upward arrows and graphs representing small business growth and statistics

The latest Key Small Business Statistics 2023 report by Innovation, Science and Economic Development Canada, Small Business Branch offers a comprehensive look at the entrepreneurial landscape in Canada. It covers data on the number of businesses, employment trends, business creation and disappearance rates, and the contribution of small and medium-sized enterprises (SMEs) to the GDP. Here are some of the key highlights:

Number of Businesses in Canada

As of December 2022, Canada was home to 1.22 million employer businesses. The breakdown is as follows:

  • Small businesses (1–99 employees): 1.19 million (97.8%)
  • Medium-sized businesses (100–499 employees): 23,395 (1.9%)
  • Large businesses (500+ employees): 3,128 (0.3%)

Ontario and Quebec hold the largest concentrations of small businesses, with 444,702 and 248,924 businesses, respectively. The Atlantic provinces and the Territories have fewer, with Alberta leading the way with the most businesses per capita.

Business Creation vs. Disappearance Rates

Between 2016 and 2020, the average number of small businesses created annually was 100,475, while the average number of businesses that disappeared each year was 96,548. However, in 2022, the net change in small business numbers was lower, with a rise in closures due to economic pressures.

Business Survival Rates

The survival rates of Canadian small businesses vary significantly depending on their sector. On average:

  • Goods-producing sector: 30.6% of small businesses survive at least 19 years.
  • Services-producing sector: 19.5% of small businesses survive for the same period.

During the period from 2016 to 2020, the average annual creation of small businesses was 100,475, while 96,548 businesses disappeared annually. These numbers reflect the continual churn of businesses in Canada, with some thriving and others exiting the market.

Gender Trends in Business Creation and Survival

An interesting trend in the period between 2005 and 2020 is the higher business birth rates among majority female-owned businesses compared to majority male-owned businesses. This gap has been closing over time. However, when it comes to business survival, majority male-owned businesses have shown slightly higher long-term survival rates. The difference has widened slightly over the years, though this could be attributed to a range of sectoral factors.

Employment and Contribution to GDP

As of 2022, small businesses employed 5.7 million individuals, accounting for 46.8% of private-sector jobs. Medium-sized businesses employed 2.1 million (17%), and large businesses employed 4.4 million (36%). SMEs continue to play a vital role in the Canadian economy, contributing approximately 50% to the country’s GDP, with small businesses contributing 35.1%

Export and High-Growth Firms

SMEs contributed 40.8% to the total value of Canada’s exported goods in 2022. High-growth firms (HGFs) were concentrated in sectors like information and cultural industries, professional services, and waste management.

These key insights from the 2023 Key Small Business Statistics report shed light on the vital role small and medium-sized enterprises (SMEs) play in Canada’s economy. From employment contributions to survival rates, these businesses are the backbone of the private sector. For more in-depth insights and data, download the full report from Innovation, Science and Economic Development Canada, Small Business Branch here or below.

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