Small Business Highlights*
Small Business Definition
Industry Canada's definition of 'small business' is firms that have fewer than 100 employees.
Medium Size Business Definition
Industry Canada's definition of a "medium sized business" is firms that have between 100 and 499 employees.
Number of Businesses in Canada
As of December 2007, there were 1 077 047 employer businesses (having a payroll of at least one person) in Canada. Small Business accounts for 98% of all businesses in Canada. Each year, approximately 139 000 new small businesses are created in Canada.
Number of Businesses in Ontario
As of December 2007, there were 365 649 employer businesses (having a payroll of at least one person) in Ontario. Ontario accounts for 34% of all small businesses in Canada. In Ontario, 97.4% of businesses are considered small (less than 100 employees), 2.3% are considered medium (100-499 employees) and .3% are considered large (500+ employees).
Contribution to Gross Domestic Product (GDP)
On average, small businesses that have fewer than 100 employees contribute about 30% to Canada's GDP. In 2006 small business in Ontario contributed 22% to Ontario's GDP.
As of 2007, small businesses employed approximately 5 million individuals in Canada, or 48% of the total labour force in the private sector. Small businesses created about 100 000 jobs in 2007, accounting for over 40% of all jobs created in Canada. Over the 1997 to 2007 period, small firms accounted for 37% of all jobs created, on average, in the private sector. Approximately 15% of all employed workers in the Canadian economy in 2007 were self-employed.
Small businesses account for over two thirds of employment in five Canadian industry categories: non-institutional health care, construction, accommodation and food, forestry, and other services. Roughly 25% of small businesses operate in Canadian goods-producing industries; the remaining 75% operate in service industries.
Failure rates for small businesses in Canada are high for the first three years and decline over time. About 70% of small businesses that enter the marketplace survive for one full year; half survive for three years. Approximately 25% of small businesses are still operating after nine years. The number of business bankruptcies in Canada fell by 50% between 1997 and 2007 to about 6300 in 2007.
Women in Business
It is estimated that 47% of small and medium-sized enterprises (SMEs) have some degree of female ownership: 16% of SMEs are majority-owned by women, 20% are owned in equal partnerships between male and female owners, and 11% of SMEs have a minority female ownership.
Research and Development
In 2003, small businesses in Canada spent just over $3 billion on research and development (R&D). As a percentage of revenue, spending on innovation in 2003 by small businesses in Canada was significantly greater than that by larger firms.
The overall rate of Canadian firms selling online was 7% in 2005, while the overall rate of firms buying online was 43%. In both categories, small firms lagged behind large firms. Only 6% of small firms sold online compared with 16% of large firms. Similarly, online purchases were conducted by 40% of small firms, well below the 68% of large firms purchasing online.
Source: Industry Canada, Small Business Policy Branch, Key Small Business Statistics, July 2008
Added on December 02, 2008