Entrepreneur Statistics in Canada

Small and medium-sized businesses play an important part in Canada and make significant contributions to the country’s economy. In 2022, small businesses employed almost two-thirds of the total workforce.

What does entrepreneurship look like in today’s Canada? Continue reading as we look at entrepreneurship in Canada through statistics. 

Entrepreneur Statistics for Canadians

• There are 3.5 million entrepreneurs in Canada.
• Small and medium-sized businesses employed 14.3 million people in the first quarter of 2022.
• A quarter of Canadians are interested in running their own business.
• In the last forty years, the number of women entrepreneurs has grown 3.1 times as fast as the number of men becoming entrepreneurs.
• One in four new companies are started by immigrants to Canada.
• 41% of new entrepreneurs have at least a bachelor’s degree.
• Although small businesses generate new jobs across a wide range of industries, most of them are within five industries.
• Ontario has the highest proportion of entrepreneurs, with 33%.
• Over 50% of small businesses employing 1-19 people reported lower figures during the pandemic compared to 2019.
• Small businesses are more likely to have financial constraints than larger businesses.
• Entrepreneurs are more likely to develop problems with mental health compared to those employed by others.
• 90% of Canadian entrepreneurs say they are professionally satisfied.
• 42% of entrepreneurs report that accessing government funding is very difficult.
• 67% of aspiring entrepreneurs said they would like support with funding their business venture.
• 50% of the total workforce is now made of millennials and Generation Z age groups.

How many entrepreneurs are there in Canada?

According to Start Up Canada, there are currently around 3.5 million entrepreneurs in Canada and there were 901,794 small businesses in October 2021 in Canada.

The pandemic slowed down the rate of new businesses opening in Canada. In December 2020, 46,809 new businesses opened compared to August 2021 when there were 41,795 new businesses.

How many people are employed by small to medium-sized businesses?

Small businesses made up 98% of all the employer businesses in Canada in 2022, according to Statistics Canada, and were employing 10.7 million people, which is about 63% of the total workforce. In addition, medium-sized companies employed 3.6 million workers, accounting for 21% of the workforce. In 2022, the total number of people employed by small and medium-sized businesses was 14.3 million.

In comparison, large businesses only employed 2.7 million people, which represents 16% of the labour force.

Between 2003 and 2017, there were 1.2 million new jobs created in Canada. 85.3% of these new jobs were in small or medium-sized companies.

More Canadians than before would consider becoming an entrepreneur

In a survey by BDC, a quarter of the respondents said they were interested in starting a business in the future with a further 10% saying they expected to start their business within the next two years.

The interest in entrepreneurship was the highest among millennials with 42% saying they would be interested in running their own business. The survey also found that there were more entrepreneurial aspirations in Western Canada and among men.

More millennials and people over 55 are choosing entrepreneurship

The number of Canadians who are aged over 55 and starting their own business has tripled in the last twenty years. In 2000, there were only 1,900 new businesses started by people over 55 compared to nearly 5,900 in 2018.

At the other end of the workforce spectrum are millennials and Generation Z, who are proving to lean toward entrepreneurship. In 2018, the younger generations accounted for a third of new entrepreneurs.

The number of women entrepreneurs is growing in Canada

Women are still less likely to become entrepreneurs than men. However, the trend is changing with women now representing 28% of all entrepreneurs compared to just 11% forty years ago. There were 241,000 women running their own businesses in Canada in 2018.

Also, in the last forty years, the number of women entrepreneurs has grown 3.1 times faster than the number of men starting a new business. Women are more likely to start a business in the service sector with education and health services being the most popular choice at 63.1% followed by accommodation and food services at 44.1%

Immigrants are behind one in four new companies in Canada.

Immigrants to Canada make up 21.9% of the population. A quarter of those newcomers are working as entrepreneurs and in 2018, the rate of entrepreneurial activity was twice as high among new arrivals compared to the Canadian-born population. The number of entrepreneurs in Canada who are immigrants has grown by 22% from 205,400 in 2006 to 251,600 in 2018.

Statistics collected by BDC also show that immigrants to Canada are creating more net jobs per business and growing their companies faster than businesses owned by people born in Canada.

More people with university degrees are choosing entrepreneurship than before

In 2017, 26% of Canadians employed by someone else had a university degree. In comparison, 41% of people choosing to work for themselves had a university degree in 2017. This trend of entrepreneurs with a higher education background is likely to continue with the proportion of entrepreneurs with a degree having increased by six percent in six years.

Immigrant entrepreneurs are the most likely at 57% to have at least a bachelor’s degree compared to 35% of Canadian-born entrepreneurs. 46% of women entrepreneurs have a degree compared to 40% of men.

The rise in entrepreneurs with degrees is linked to more business schools offering programs teaching skills needed to build a business.

Small businesses create new jobs in a range of industries

Most small businesses in Canada are found within five industries which are construction, retail, professional, scientific and technical services, health care and social assistance, and other services. Each of the first three sectors represents just over 12% of the total number of small businesses. Health care and social assistance businesses form 9.5% and other services 9.2% of all small businesses.

If we include medium-sized businesses, then the mix of both accounts for at least 70% of employees across all industries with agriculture (99.3%) and other services (99.0%) leading the pack according to Wagepoint.

What is the contribution of small and medium-sized companies towards GDP in Canada?

Small businesses contributed around 38% of the GDP between 2010 and 2014. Medium-sized companies accounted for 11.8% making the total between small and medium-sized companies to almost half of Canada’s GDP.

Where are Canadian entrepreneurs most likely to live?

The biggest portion of entrepreneurs in Canada lives in Ontario. Ontarians represent 33% of the total number of entrepreneurs in the country. Quebec and British Columbia each have 19% of the entrepreneurs while the Prairie provinces account for 23% and Atlantic provinces for 7% of the total number.

Data collected by Wagepoint shows that despite Ontario having the largest proportion of entrepreneurs, British Columbia and Saskatchewan are the two provinces with the highest number of people employed by small businesses with 98.3% in each province.

Small business revenue down from 2019 to 2021

An analysis by Statistics Canada found that over half of small businesses employing one to nineteen people reported lower revenues in 2021 compared to 2019. 41% of businesses between 20 and 99 employees reported lower revenues in 2021.

The analysis also found that smaller businesses were less likely to have an optimistic future outlook. Only two-thirds of businesses employing up to 19 people had a positive outlook compared to 84.6% of companies with over one hundred employees.

Small businesses are more likely to have financial constraints and less likely to increase the number of employees

The same analysis found that 26.9% of small businesses with 1-19 employees could not take on more debt. 16.7% of businesses employing 20-99 people and only 6.2% of businesses with 100 or more employees reported the same constraints.

Only just over one-tenth of businesses between 1 and 19 employees were expected to increase the number of people they employed compared to 34% of businesses with over one hundred employees. However, smaller businesses were less likely to be affected by shortages in the labour force.

How many small businesses are still running after 10 years?

Around a third of all new businesses go under within the first five years and fewer than one in two business ventures were still open after ten years. Reasons for failure include:

• being out-competed;
• lack of a proper business model;
• running out of cash;
• there is no market for their service or product;
• poor marketing; and
• ignoring customers.

High levels of stress can put entrepreneurs at risk of developing mental health issues

There is a lot of stress involved in running a business and entrepreneurs need to be masters of many trades to succeed. Many entrepreneurs take personal and financial risks when choosing to start their own business.

When entrepreneurs were asked about the main disadvantages of running a business, ¾ named dealing with financial insecurity, a lot of stress, and lack of benefits as the top three disadvantages.

A study commissioned by BDC and conducted by the Canadian Mental Health Association found that entrepreneurs were more likely to report problems with mental health compared to those in steady employment. The percentages were 21% and 8.1% respectively. The main complaints were mood and anxiety disorders. Female entrepreneurs were more at risk of experiencing poor mental health compared to their male counterparts.

Despite the high stress, entrepreneurs report being professionally satisfied

90% of Canadian entrepreneurs say they are professionally satisfied despite the challenges posed by managing a business. In a survey about satisfaction among entrepreneurs, 70% said they were satisfied professionally.

83% agreed that they enjoy running their own business, with 58% saying they agree strongly with the statement. A total of 81% said they were motivated to work on their business daily.

What entrepreneurs would like from the government?

Many entrepreneurs state that lack of financial support and accessible funding programs has been a major challenge according to Start Up Canada’s findings. Nearly 90% of businesses said they would benefit from funding and platform credits when establishing a digital presence.

The sample of entrepreneurs in the Start-Up Canada survey found that 91.8% of businesses had not been able to access funding at all or at least partially. 42.7% of new entrepreneurs mentioned that accessing government funding was very difficult. In contrast, only a tenth of the entrepreneurs said it had been easy to access government funding.

There is a growing need for support at the early stages of entrepreneurship

When entrepreneurs were asked what support would they like to grow their business, 67% of those who responded said funding. Mentorship was also a popular answer, with 56% saying they would like more mentoring on running a business.

The third area where aspiring entrepreneurs would like to receive more support was with business planning, with 48% saying this was something they needed help with.

What trends do new entrepreneurs need to look out for in the future?

The workforce is getting younger, with 50% of the working people now coming from the millennials and Generation Z age group. The workforce is also becoming more culturally diverse, with 80% of the population growth driven by newcomers to Canada by 2032.

The trend towards virtual marketplaces will continue to grow, as will the automation of business activities. The data economy will also continue to rise with 75 billion devices predicted to be connected to the internet by 2025.

Summary

Small and medium-sized businesses are vital for the health of the economy and for the creation of new jobs. Many new entrepreneurs feel there needs to be more support with funding and mentoring to launch their business ideas successfully.

Despite being a stressful option, entrepreneurs report high job satisfaction. The number of entrepreneurs is growing in Canada and so are the numbers of women and immigrant entrepreneurs.