Key Small Business Financing Statistics - August 2005

SME Marketplace

How many businesses are there in Canada?

In 2001, there were more than 1.5 million small and medium-sized enterprises (SMEs) in Canada.^{Footnote 2} The location of these enterprises is governed primarily by population density and by other factors such as sector concentration. Figure 1 compares the distribution of SMEs by region to the distribution of population by region in Canada in 2001. It shows that the distribution of SMEs is fairly proportional to the overall distribution of population, with 58 percent of business enterprises located in Ontario and Quebec.

Figure 1: Distribution of SMEs by Region in 2001

Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2001.

What is the distribution of SMEs by size of firm (number of employees) and in sectors?

Sector

According to SME FDI data, small businesses (those with fewer than 100 employees) represented the majority (99 percent) of SMEs in Canada in 2001; there were just 6147 medium-sized businesses (those with more than 100 but fewer than 500 employees).

Nearly two thirds of SMEs (64 percent) operated in the services sector. The remaining SMEs were distributed among the goods-producing sector (21 percent) and the resource-based sector (15 percent) (see Table 1).

Table 1: Distribution of SMEs by Sector in 2001

Sector	Number of SMEs	Proportion of SMEs (%)
Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2001. Note: Other sectors include construction; transportation; warehousing and couriers; information and cultural industries; real estate, rental and leasing; administration and support; waste management and remediation; health care and social assistance; arts, entertainment and recreation; accommodation and food services; and other services.
Agriculture	189 938	13
Primary	32 235	2
Manufacturing	77 336	5
Wholesale/Retail	235 003	16
Professional services	189 111	12
KBI sector	73 222	5
Other sectors NEC	717 512	47
Total – Canada	1 514 356	100

Size

The distribution of SMEs by size of firm (number of employees) varies considerably across different industries. Figure 2 reveals the distribution of SMEs (in terms of number of employees) by sector. Those in agriculture and in professional services and knowledge-based industries are typically self-employed (0 employees) or micro-enterprises (1 to 4 employees). In comparison, manufacturing, the wholesale/ retail sector and primary industries tend to have a higher percentage in the larger size categories (5 to 99 employees) than do other SMEs.

Figure 2: Distribution of SMEs by Employment Size and Sector in 2001

Source: Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2001.

The relationship between size of business and sector is important in analyzing challenges related to availability of financing. Sector of operation may influence the pattern of ownership for certain sizes of businesses. For example, the high percentage of self-employed businesses in the agricultural sector may influence the financial structure of such firms.

Footnote 2. According to the Business Register of Statistics Canada, there were 2.2 million business establishments in Canada as of June 2003. Establishments are the smallest unit/grouping for which data are published; therefore, an enterprise may consist of many establishments located in different provinces.