Establishments: Canadian Economy (NAICS 11-91)

Under this topic you will find information on the number, size and location of establishments in the Canadian Economy (NAICS 11-91).


Establishments by employment type and region

Some establishments do not employ any individuals and in some cases employment estimates are indeterminate. Non-employers are in effect owner operated and the owners do not pay wages or salaries to themselves as an employee of the company. Even though some establishments do not maintain employee payrolls, they may have work forces, which may consist of contracted workers, part-time employees, family members or business owners.

The table below shows the breakdown between employers and non-employers for each province and territory, as well as the percentage distribution of the number of establishments at the national level. For the Canadian economy, 45.2% of all establishments are non-employers/indeterminate and 54.8% have one or more employees.

Source: Statistics Canada, Canadian Business Patterns Database, December 2012.

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Establishments by employment size category and region

The size of a business can be defined in many ways, for example, by the value of its annual sales or shipments, its annual gross or net revenue, the size of its assets, or by the number of employees. Industry Canada often uses a definition based on the number of employees.

Establishments are considered micro if they employ fewer than 5 people. Above that mark, a goods-producing firm is considered small if it has fewer than 100 employees, while for service-producing firms the cut-off point is set at 50 employees. Above that size, and up to 500 employees, a firm is considered medium-sized.

The table below indicates the number of employer establishments by employment size category and by province or territory in the Canadian Economy.

Source : Statistics Canada, Canadian Business Patterns Database, December 2012.

In December 2012, there were just over 1 million employer establishments in the Canadian economy. Of these employers establishments 55.3% were considered micro, having fewer than five employees. Small and medium-sized establishments accounted for an additional 44.5% of the total number of establishments. Large employers, those with more than five hundred persons on payroll accounted for 0.3% of the total establishments in the Canadian Economy.

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Establishments by employment size category and sector

The table below describes the number of establishments by employment size category, sector and by North American Industry Classification System (NAICS) sector.

Source : Statistics Canada, Canadian Business Patterns Database, December 2012.

SMEs are the dominant establishment size category in all sectors of the economy. In fact, more detailed data for December 2012 illustrates that micro-establishments represent the largest component of the total number of employer establishments in the Canadian economy. This statement is true across the majority of the sectors in the Canadian economy.

In many of the sectors where we would expect to find smaller operations, the data do in fact show a substantial number of micro-sized establishments.

In December 2012, this was the case for the Agriculture, Forestry, Fishing and Hunting sector, where 71.6% of the total number of employer establishments in this sector were considered micro.

This was also the case for the Professional, Technical and Scientific Services sector, where the same calculation was 76.0% and the Other Services - except Public Administration sector where 66.0% of establishments were micro-sized.

On the other hand, the proportion of large establishments is more significant in the Utilities, Education Services, Public Administration and Manufacturing .

In each of these sectors, large establishments represented over 2 and 3% of their respective total number of employer establishments in December 2012. In most other sectors, large establishments represent less than 1% of the total number of employer establishments.

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Notes on establishments data

Establishment counts change primarily due to the net effect of business entries into and exits from the economy. Other factors can also influence these counts.

An establishment is placed into a NAICS category according to its primary business activity - the product whose revenues are the highest in terms of dollar value. If an establishment produces more than one product or service and these activities cross over NAICS boundaries then an establishment could move from one NAICS code to another, diminishing numbers attributed to one code and augmenting another. For example, an establishment could be making steel and plastic auto parts, and the NAICS code to which it is assigned would depend on which product accounts for the largest share of its revenues in a specific year.

The number of establishments can be affected by methodological changes, i.e. changes in the method of identifying inactive units. This may lead to false interpretation of the economy behavior and this is why Statistics Canada does not recommend to use the Canadian Business Patterns data for longitudinal analysis.

For statistical reporting purposes, different types of business entities are recognized, e.g. the enterprise and the establishment. This section deals exclusively with the establishment which is generally in a single location producing a limited range of products.

The establishment, as a statistical unit used in business surveys, is defined as the most homogeneous unit of production for which the business maintains accounting records from which it is possible to compile data on the inputs used in the production process (cost of materials and services, labour and capital) and the gross value of production (total sales, revenues and inventories).

The activity of an establishment can be described in terms of what is produced, namely the type of goods and services produced, or how they are produced namely, the raw material and service inputs used and the process of production or the skills and technology used.

In contrast, an enterprise, as a statistical unit in business surveys, is defined as the organizational unit of a business that directs and controls the allocation of resources relating to its domestic operations, and for which consolidated financial and balance sheet accounts are maintained from which international transactions, an international investment position and a consolidated financial position for the unit can be derived.

In the case of most small and medium sized businesses in Canada, the enterprise and the establishment are identical. Large and complex enterprises, consisting of more than one establishment, may belong to more than one NAICS industry.