Economic Analysis and Statistics Canadian Industry Statistics

Establishments
Canadian Economy

This section reviews data on establishments for the sectors of the Canadian Economy for 2003.

The data are drawn from Statistics Canada's Canadian Business Patterns database which offers statistical information based on the Business Register. The latter is used by Statistics Canada to draw samples for the major surveys it undertakes.

The Business Register maintains a complete, up to date and unduplicated list on all active businesses in Canada that have a corporate income tax (T2) account, are an employer or have a GST account with an annual gross business income of over $30,000. It may not match other estimates of establishments derived from survey results.

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The sectors of the economy can be regrouped to form five largely goods-producing industries (NAICS 11 to 31-33) and fifteen service-producing industries (NAICS 41 to 91).

The 20 economic sectors specified by the North American Industry Classification System (NAICS) are listed below. Links are to the official NAICS Canada 2002 definition of each sector.

• Goods-producing Industries
  • Agriculture, Forestry, Fishing and Hunting (NAICS 11)
  • Mining and Oil and Gas Extraction (NAICS 21)
  • Utilities (NAICS 22)
  • Construction (NAICS 23)
  • Manufacturing (NAICS 31-33)
• Services-producing Industries
  • Wholesale Trade (NAICS 41)
  • Retail Trade (NAICS 44-45)
  • Transportation and Warehousing (NAICS 48-49)
  • Information and Cultural Industries (NAICS 51)
  • Finance and Insurance (NAICS 52)
  • Real Estate and Rental and Leasing (NAICS 53)
  • Professional, Scientific and Technical Services (NAICS 54)
  • Management of Companies and Enterprises (NAICS 55)
  • Administrative and Support, Waste Management and Remediation Services (NAICS 56)
  • Educational Services (NAICS 61)
  • Health Care and Social Assistance (NAICS 62)
  • Arts, Entertainment and Recreation (NAICS 71)
  • Accommodation and Food Services (NAICS 72)
  • Other Services - except Public Administration (NAICS 81)
  • Public Administration (NAICS 91)
    

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For statistical reporting purposes, different types of business entities are recognised, 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, shipments or 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.

Depending on the sector, establishments are refered to by a variety of trade designations. For instance, in the Manufacturing Sector, the establishment generally corresponds to a plant, mill or factory; while in the case of the Wholesale Trade sector, there is a distinction between what are commonly known as agents and brokers on the one hand, and wholesale merchants on the other.

In the sectors dealing with construction, transportation and communications, activities tend to be dispersed. The individual sites, projects, fields, networks, lines or systems of such activities are not normally treated as establishments. The establishment is represented by those relatively permanent main or branch offices, terminals, stations, etc. that are either :

1. directly responsible for supervising such activities, or
2. the base from which personnel operate to carry out these activities.

In contrast, an enterprise, as a statistical unit in business surveys, is defined as the organisational 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.

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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, 54.6% of all establishments are non-employers and, conversely, 45.4% are employers of one employee or more.

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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.

A goods producing firm is considered small if it has fewer than 100 employees, while for service producing firms the cut-off point is seen as 50 employees. Above that size, and up to 500 employees, a firm is considered medium-sized. The term SME (for small and medium enterprise) is used to refer to all these components of the economy together. For more details, see Key Small Business Statistics.

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

In 2003, there were less than 1.1 million employer establishments in the Canadian Economy. Of these employer establishments, 57.7% were considered micro, less than five employees. Small and medium-sized establishments accounted for an additional 42.0% 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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The table below describes the number of establishments by employment size category and by sector. The sectors of the economy used here are those defined by the North American Industry Classification System (NAICS) - Canada 2002.

Please note the different employment size categories used for goods-producing industries as opposed to services-producing industries.

SME's are the dominant establishment size category in all sectors of the economy. In fact, more detailed data for 2003 illustrates that micro-establishments represent the largest component of the total number of employer establishments in the Canadian Economy. This statement is true across almost all of the sectors in the Canadian economy.

Not surprising, in many of the sectors where we would expect to find smaller operations, the data depicts a substantial number of micro-sized establishments. In 2003, this was the case for the Agriculture, Forestry, Fishing and Hunting sector, where 73.2% 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 70.6%.

On the other hand, large establishments are relatively more significant in the Utilities, Educational Services and Public Administration sectors. In each of these sectors, large establishments represented 3 to 4% of their total number of employer establishments in 2003. In all other sectors, large establishments represent less than 1% of the total number of employer establishments.