I've put together these Canadian small business statistics from various sources to answer people's common questions about small businesses in Canada. You can use them for market research or reports if you like, as long as you properly cite the sources.
How Many Canadian Small Businesses Are There?
As of December 2015, there were 1.17 million employer businesses in Canada. Of these, 1.14 million (97.9 percent) businesses were small businesses, 21,415 (1.8 percent) were medium-sized businesses and 2,933 (0.3 percent) were large enterprises.
(Note that these figures only include Canadian small businesses that meet the criteria to be included in Statistics Canada's Business Register:
- Have at least one paid employee (with payroll deductions remitted to the Canada Revenue Agency)
- Or have annual sales revenues of $30,000
- Or be incorporated and have filed a federal corporate income tax return at least once in the previous three years) (Key Small Business Statistics - June 2016, Government of Canada))
For instance, in 2016, about 2.98 million self-employed people filed a tax return in Canada (Statista).
For comparison, in 2015, there were 14,559.3 million people aged 15 and older employed full-time in Canada (Statista). (In 2017, there were 14,892.8 million people employed on a full-time basis in Canada.)
Canada's self-employed made up 8.3 percent of employment in 2017 (OECD Data).
How Big Are Canadian Small Businesses?
What many people don't realize is that in Canada, most small businesses are small indeed. As Key Small Business Statistics - June 2016 (Government of Canada) points out, of the 1,167,978 employer businesses active in Canada, micro-enterprises (firms with 1 to 4 employees) constitute 54.1 percent of all private employers, which is the largest SME group. If the groups of employer businesses with 5 to 9 and 10 to 19 employees are included, they account for 86.2 percent of employer businesses.
And remember, the government is only reporting on employer businesses in Key Small Business Statistics. There are many solo-operated businesses in Canada that have no employees.
Where Are Canadian Small Businesses Located?
Key Small Business Statistics – June 2016, Statistics Canada presents a table showing the number and size of employer small businesses in each province and territory in 2015 (Table 1.1-1). The majority of these businesses, 36 percent or 416,801 are in Ontario. The next largest concentration of businesses is in Quebec, where 21 percent or 239,966 of employer small businesses are located.
Almost all the rest are divided between the western provinces and the Atlantic provinces. The Northwest Territories, Yukon and Nunavut represent only 0.3 percent of Canada's businesses.
Relative to population, the western provinces, Yukon and Prince Edward Island have the highest number of SMEs per 1,000 population, with the highest rates in Yukon with 57.3, Alberta at 50 and Prince Edward Island with 48.7 businesses per 1000 population respectively. Nunavut, Newfoundland and Labrador and Nova Scotia have the lowest ratios of business establishments per 1000 population. Ontario and Quebec are below the national average, with 36.3 and 34.7 business establishments per 1000 population respectively.
"SME Perspective: Canadian Rural-Based Entrepreneurs", Small Business Quarterly, November 2007, vol. 9, no. 3, Industry Canada
"In 2004, rural-based small and medium-sized enterprises (SMEs) represented 28 percent of the estimated 1.4 million SMEs in Canada, somewhat higher than rural Canada's proportion of the overall population (20 percent in rural areas versus 80 percent in urban areas). This suggests that Canadians residing in rural areas were more likely to be entrepreneurs than those living in urban centres. This is corroborated by the fact that 6 percent of rural-based Canadians owned an SME compared with 4 percent of urban residents. The Prairie provinces had the highest share of rural-based SMEs (36 percent), followed by Quebec (24 percent), Ontario (21 percent), the Atlantic provinces (11 percent) and British Columbia (8 percent)."
What Types of Businesses Are Most Popular in Canada?
Service businesses, by far. In fact, 78.5 percent of all employer businesses in Canada in 2015 (916,527 businesses) were service oriented businesses, compared with 21.5 percent (251,451) that were goods-producing businesses.
What Impact do Small Businesses Have on Canada's Economy?
In 2014, small businesses contributed an average of 30 percent to the gross domestic product (GDP) of their province.
In total in 2015, SMEs employed 90.3 percent (10.5 million) of the private sector workforce and the majority of these employees worked for small businesses, constituting 70.5 percent (8.2 million) of private sector employment ( Key Small Business Statistics - June 2016).
How Easy Is It to Start a Business in Canada?
According to The World Bank 2019 Doing Business Report, Canada is the third easiest country in the world to start a business in. However, its ease of doing business rank is 22 (the ranks range from 1 to 190). To determine this ranking, The World Bank measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-size limited liability company to start up and formally operate in each economy’s largest business city (in this case, Toronto).