While the importance of small businesses to Canada's economy is undeniable – 1.3 million of them employ more than 11 million people – there are still many unknowns about small businesses. Portrait of Canada’s small and medium-sized businesses: Adaptable, agile and all at the same time Provides a unique, holistic view of Canada's small businesses. It analyzes the ownership, age, geography and industry of these companies, as well as some of the challenges faced by small and medium-sized businesses seeking to grow in a complex economy.
Using new data and research, including custom aggregations from Statistics Canada, Environics Analytics, and public sources, this report investigates three questions:
- What is the current state of small businesses in Canada?
- How is the small business landscape evolving?
- How can small businesses grow more profitably in this rapidly changing environment?
Current status of small and medium-sized enterprises in Canada
Despite accounting for 98% of Canadian businesses and employing two-thirds of the Canadian economy, the status of small and medium-sized businesses remains largely uncertain. In this report, BDL created three more detailed subcategories of SMEs (micro, small and mature) and found that the experiences of SMEs vary widely.
- micro: Businesses with 1-4 employees. The most common type of business, accounting for 57% of Canadian businesses.
- scale: Companies with 5 to 19 employees account for 30% of Canada's business.
- mature: Companies with 20 to 99 employees account for 11% of Canadian businesses.
If we break down all Canadian businesses by employment size, the median company has fewer than five employees. This highlights the importance of developing a better understanding of the business realities of all small and medium-sized enterprises, especially micro-enterprises.

geography
The majority of small businesses are concentrated in the four most populous provinces: Ontario, Quebec, British Columbia, and Alberta; however, after controlling for large differences in population, the majority of small businesses are concentrated in the four most populous provinces: Ontario, Quebec, British Columbia, and Alberta. , and a proportionately larger number of companies located in Western Canada.

sector
Almost half of all small businesses belong to four industries: professional services, scientific services, and technical services. construction; retail trade; and health care and social assistance.

possession
Among traditionally underrepresented groups, women have the largest gap in business ownership compared to their population share. Significant property rights disparities also exist between people with disabilities, visible minorities, and indigenous peoples. Immigrants to Canada are the only equity-seeking group that accounts for a more than proportionate share of management.
By examining ownership trends, we can develop a better picture of how much work is needed to develop Canada's small businesses into a truly inclusive and representative environment.
The smaller the business, the bigger the problem
During the pandemic, small and medium-sized enterprises (SMEs) were likely to experience slower performance and employment growth, significant revenue declines and debt constraints, and difficulty implementing new technologies. These challenges not only continue to plague small businesses, but also further hinder their ability to cope with turbulent economic conditions.
Slower business growth
Compared to the pre-pandemic situation in December 2019, the number of small businesses in Canada increased by only 2.9%, while the number of large businesses increased by 7.3% and the number of medium-sized businesses by 5%.
deterioration of employment
Small businesses were hit hardest by job losses and recovered the slowest, but the rate of change in employment was essentially unchanged compared to the pre-pandemic situation.
Decrease in revenue, increase in business debt
Small businesses were almost twice as likely to experience a decline in revenue in 2020 compared to midsize and large businesses, and the increase in debt due to the pandemic is more likely to be held by small businesses and underrepresented groups. It was more common in businesses. These same groups were more likely to report that their businesses could not take on additional debt. Debt constraints have always been a major concern for micro and large businesses.
To digitalization
New technology and the proliferation of social media are changing the way businesses and consumers connect. This report highlights the challenges businesses face today as they are required to satisfy consumers' desire for personalized online interactions, often while maintaining brick-and-mortar locations. doing.
Further driving home the importance of an attractive commercial presence online, 83% of Canadian retail shoppers report doing research online before visiting a store, and 8% They said they shop online from a retailer with a physical store nearby. By investing in your online presence and visibility, maintaining accurate and engaging digital information, and in doing so proactively managing and growing your online reputation, small retailers can improve their purchasing research. You can effectively capture the attention of potential customers in stages and ultimately gain more customers. Increase traffic to your store and increase sales in both the digital and physical realms.
The future of small business in Canada
Although small businesses make a significant contribution to Canada's economy, they are often more vulnerable to economic downturns and technological shocks, both of which occur all the time in our world. This reality will place increasing demands on small and medium-sized businesses to adapt and innovate in line with Canada's broader greening and digital transition. It is important to ensure that appropriate financial, operational and regulatory support measures are in place to increase the resilience of SMEs, particularly small and large enterprises.
The lessons learned from this report's data analysis demonstrate once again how government support is fundamental to small and medium-sized enterprises' survival and ensuring inclusive recovery and growth.
Want to learn more about the current state of small business in Canada? Read the full report.

