Contributions of Small Businesses in Canada

by in KD Professional Accounting Services News
Small business are an extremely important addition to the economy. In many ways they benefit the economy and their positive contribution should be rewarded not overlooked.

Small businesses in Canada make great contributions to the growth of the Canadian economy.  Aside from maintaining and creating opportunities for employment, small businesses account for a significant percent in Canada’s GDP. Here are the details:

 How many people work for small businesses?

Statistics Canada’s Survey of Employment, Payrolls and Hours or SEPH covers employer businesses in Canada and reports the number of employees at the enterprise level. A business enterprise is defined as a family of businesses under common ownership and control for which a set of consolidated financial statements is produced on an annual basis. Note that self-employed persons are not included in the surveys.

According to SEPH, over 5.1 million employees on payroll or 48 percent of the total private sector labour force in 2009 worked for small enterprises (those with fewer than 100 employees).  More than 1.6 million or 15 percent worked for medium-sized enterprises (those with 100 to 499 employees).  In total, SMEs employed over 6.7 million or 64 percent of private sector employees covered by SEPH. 

How many jobs do small businesses create?

According to SEPH, for five years, from 200 to 2002 and in 2008 and 2009, small businesses made the greatest contribution to net job creation.  Over the 1999 to 2009 period, small firms accounted for 37 percent of all jobs created, on average, in the private sector.

What is the contribution of small businesses to Canada’s GDP?

Gross domestic product or 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 Government of British Columbia’s statistical service or BC Stats has estimated that in 2008, small businesses accounted for approximately 29 percent of Canada’s GDP.  The percentage varies from a low of 18 percent in Newfoundland and Labrador to a high of 34 percent in British Columbia.

Reference: Key Small Business Statistics, July 2010,


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