Small Business is The Backbone of Canada
Coming as the second-largest country by total area in the world, Canada covers 9,98 million square kilometers of land, which Britain can fit 40 times. Despite its vast area, the country surprisingly has a small number of big companies.
There is a massive gap between the number of small businesses and large enterprises in Canada. No wonder small business is referred to as the primary key and backbone of the Canadian economy.
Types of Business According to Its Size
SME and HGF are terms often used to refer to certain types of businesses according to their size. Let’s get into the details of those terms.
SME (Small or Medium Enterprise)
A small business refers to an enterprise or industry with 1-99 active paid employees. At the same time, medium-sized companies have 100-499 active paid employees.
Industries with more than 500 active paid employees are categorized as large businesses. In addition, businesses that have been around for two years are categorized as start-ups.
HGF (High-growth Firms)
High-growth Firms refer to businesses with an average annualized growth rate of more than 20% over three years. The company also has ten or more employees at the beginning of the period.
The Number of SMEs and HGFs in Canada
In total, there are 1,17 million businesses in Canada. Those numbers rely heavily on small businesses. Let’s take a look at a more precise number.
- 97,9% or 1,14 million businesses are small.
- 1,8% or 21,415 businesses are medium-sized.
- 0,3% or 2,933 businesses are large enterprises.
Furthermore, Ontario and Quebec have become two cities with the smallest businesses.
How Many People Work for SMEs?
11,6 million Canadians work in the private sector, and SMEs employ 90,3%.
In British Columbia, the number of people employed by SMEs has increased to 93,6%. Whereas in Ontario, the number falls to 87,3%
What Does Small Business Do?
There are over a million SMEs in Canada, but only 1,6% are classified as medium-sized. This means that around 980,000 businesses in the country are categorized as small and have no more than 100 employees.
However, SMEs, on average, create 100,000 jobs per year. In other words, nearly 70% of hires are made by small and middle-sized businesses. A fifth, or 18,8%, are involved in the trade and retail sector, while only a quarter invests in Research and Development (RND).
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