Key Small Business Financing Statistics — December 2006

SME Marketplace

How many businesses are there in Canada?

In 2004, there were approximately 1.4 million small and medium-sized enterprises (SMEs) in Canada. 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 with the distribution of population by region in Canada in 2004. 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, similar to the distribution in 2000.

Figure 1: Distribution of SMEs by Region in 2004

Source: SME Financing Data Initiative, Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2004; Statistics Canada, Census information on SME populations, 2004.

Note: Figures may not add up due to rounding.

What is the distribution of SMEs by sector and by size of firm?

Sector

According to SME FDI data, small businesses (those with fewer than 100 employees) represented the vast majority (99.7 percent) of SMEs in Canada in 2004, and the remaining 0.3 percent comprised 3333 medium-sized businesses (those with more than 100 but fewer than 500 employees).

Two thirds of SMEs (66 percent) operated in the services sector. The remaining SMEs were distributed among the goods-producing sector (22 percent) and the resource-based sector (12 percent) (see Table 1).

Table 1: Distribution of SMEs by Sector in 2004

Sector	Number of SMEs	Proportion of SMEs (%)
Source: SME Financing Data Initiative, Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2004. 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/Primary	161 949	12
Manufacturing	65 094	5
Wholesale/Retail	210 960	16
Professional services	161 232	12
Knowledge-based industry	77 750	6
Tourism	110 545	8
Other sectors	569 818	42
Total — Canada	1 357 348	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 by size and sector. Those in agriculture/primary, professional services and knowledge-based industries are typically self-employed (0 employees) or are micro-enterprises (0.5 to 4 employees). In comparison, SMEs in the manufacturing, wholesale/retail and tourism sectors tend to have a higher percentage of firms in the larger size categories (5 to 19 employees).

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

Figure 2: Distribution of SMEs by Employment Size and Sector in 2004

Source: SME Financing Data Initiative, Statistics Canada, Survey on Financing of Small and Medium Enterprises, 2004.