Small Business: There's nothing small about it

Small Business Week Calgary is just around the corner. Between October 21-25, we pay tribute to the contributions small businesses make to the Canadian economy. We focus on uniting our city’s tireless, hard-working entrepreneurs under one tent to nourish, power and inspire the entrepreneurial spirit that dominates Calgary.

So exactly how much do small businesses contribute to the Canadian economy, to Alberta, and to Calgary? In this month’s Dive Deeper, we investigate small businesses by the numbers, to demonstrate that there is nothing small about small business.

Canada

According to Statistics Canada’s Canadian Business Counts for June 2019, there are over 1.2 million businesses in Canada that have 99 employees or less and meet the definition of a small business, set by the Government of Canada.

To further break it down, in June of this year, there were 1.3 million businesses with employees across Canada: 98 per cent of these businesses employed less than 100 people, 95.3 per cent of all businesses employed less than 50, and a whopping 56.8 per cent employed four people or less.

The value that small businesses offer to our communities cannot be overstated. As of 2017, small businesses employed over 8.29 million individuals across the country, which represents 69.7 per cent of the total private labour force. That same year, small business in Canada accounted for 20.5 per cent of our $483.6 billion in total exports, placing small businesses’ contributions to our country’s exports at just over $99 billion. This was roughly triple the size of Nova Scotia’s entire economy in 2018.

Small businesses also punch above their weight when it comes to overall GDP (gross domestic product). In 2014, businesses with less than 99 employees contributed to 41.5 per cent of Canada’s wealth. By comparison large businesses, those with 500 or more employees, contributed 47.5 per cent of the country’s wealth. At the same time, small businesses accounted for 30.9 per cent of the all good-producing sector’s value, and 63.3 per cent of service-producing sector’s value.

In addition to creating wealth, small businesses also create employment opportunities for Canadians from coast to coast. Between 2013 and 2017, small businesses led the country in job creation in all regions, accounting for 67.5 per cent of all employment growth in the country. During the same time, large businesses contributed 14.7 per cent. For summary of net employment growth for all large provinces, see Figure 1 below.

Figure 1 – Contributions to net employment growth by business size between 2013 and 2017[1]

Given the sheer number of businesses, the value they bring to Canada’s economy, and the jobs they create small business play a crucial role in driving the well being of our country as a whole. In Alberta, we see the same trends.

Alberta

We’ve long known the entrepreneurial spirit in Alberta. While this province has about 1 million fewer people compared to British Columbia and roughly 10 million fewer compared to Ontario, Alberta is the only large province in Canada that has over 50 small businesses for every 1,000 people above the age of 18. This drastically outpaces the national count (42.3), Ontario (40.1), Quebec (38.1) and British Columbia (48.3), in Figure 2 below.

Figure 2 – Population vs. Businesses Per Adult[2]

Overall, Alberta’s count of 173,314 small businesses as of June 2019, ranks us at fourth in the country, roughly 30,000 behind British Columbia. Our province follows a similar trend to Canada when it comes to the composition of small business: 98.1 per cent of businesses in our province employed less than 100 people, 95.6 per cent employed less than 50 and an incredible 59.7 per cent employed less than four people. Our small businesses accounted for roughly 74 per cent of all private sector employment at the end of 2017, providing jobs for over 1 million people in the province.

Between 2013 and 2017 Alberta’s small businesses created more jobs provincially than medium or large enterprises. They more than compensated for the job losses that occurred in medium sized businesses in the province during that period, with a 132.5 per cent increase in employment. This outpaced the national average of 67.5 per cent growth by small businesses and the growth seen in large corporations during the same time of 46.7 per cent.

Alberta’s entrepreneurial spirit has remained strong despite tough economic times in recent years. We have the highest number of businesses for every thousand adults despite our population being significantly smaller than the likes of Ontario and Quebec. All the while, small businesses keep contributing to the well being of Albertans by creating jobs year over year.

Calgary

Small business in Calgary is no small matter. Between 1998 and 2018, the percentage of total businesses that are classified as small was a whopping 94 per cent. In 2018, we were just above that average at 94.6 per cent. This is no small feat when we consider that Calgary is also home to 213 head offices for major corporations that employ nearly 30 thousand people. That same year, Calgary saw 3,114 businesses registered our city, a majority of whom are likely small businesses.

The contributions our entrepreneurs make to our city, province and country are significant. As the numbers show, small businesses make up a massive majority of all businesses in our country. They contribute to job growth and participate in local as well as international trade. Small business is the engine that drives the growth of our economy and are a vital part of our country’s well-being and prosperity.

Join us between October 21-25 as we celebrate the mighty contributions and achievements of ‘small’ businesses in our city.

[1] Innovation, Science and Economic Development Canada – Small Business Branch, “Key Small Business Statistics, January 2019” retrieved from: https://www.ic.gc.ca/eic/site/061.nsf/vwapj/KSBS-PSRPE_Jan_2019_eng.pdf/$file/KSBS-PSRPE_Jan_2019_eng.pdf

[2] Statistics Canada. Table 33-10-0214-01 Canadian Business Counts, with employees, June 2019 and Table 17-10-0005-01 Population estimates on July 1st, by age and sex, calculation made by the Chamber

Given the sheer number of businesses, the value they bring to Canada’s economy, and the jobs they create small business play a crucial role in driving the well being of our country as a whole. In Alberta, we see the same trends.