Canadian Small Businesses Employ Nearly 8 Million Workers

Small and medium-sized enterprises (SMEs) are the backbone of the Canadian economy, according to data released by the Business Development Bank of Canada (BDC). SMEs, defined as businesses with fewer than 500 employees, make up 99.8% of all businesses in the country and are vital to its economic prosperity.

As of December 2022, Canada had approximately 1.22 million SMEs. These businesses were responsible for nearly 8 million jobs in 2022, accounting for 63.8% of private sector employment. Furthermore, SMEs are the engine of Canadian exports, making up 72.9% of all exporting establishments and generating 40.8% of the total value of Canadian exports.

Many of these enterprises are small in scale. Over half of Canadian businesses employ fewer than four people, and 73.8% have fewer than ten employees. Sectorally, professional, scientific, and technical services lead in the number of SMEs with 155,350 firms, followed by construction (152,864) and retail trade (134,938).

Survival rates also show interesting trends. Businesses owned equally by men and women have the highest longevity, with 68.9% still operating ten years after establishment. While goods-producing businesses show a higher survival rate than service-producing ones, SMEs collectively contributed over 48.2% to Canada's gross domestic product between 2016 and 2020.