Economic Analysis and Statistics  Canadian Industry Statistics Canadian Economy

Establishments
Services-Producing Industries
(NAICS 41 to NAICS 91)

Under the North American Industry Classification System (NAICS) the Canadian economy is divided into 20 economic sectors. These can be grouped into five largely goods-producing industries and fifteen entirely services-producing industries.

This section reviews data on establishments for the sectors of the services-producing industries for 2003. Data for goods-producing industries are reviewed in another section.

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.

Top of Page

Position in NAICS Hierarchy

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 15 economic sectors specified by the North American Industry Classification System (NAICS) as services-producing industries are listed below. Links are to the official NAICS Canada 2002 definition of each sector.

• 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)
    

Top of Page

Business Establishments and Enterprises

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.

Top of Page

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 Services-Producing Industries, 53.4% are non-employers and, conversely, 46.6% are employers of one employee or more.

Number of Establishments in Canada by Type and Region Services-Producing Industries (NAICS 41 to 91) December 2003
Province or Territory	Employers	Non-Employers/ Indeterminate	Total	% of Canada
Alberta	105,056	106,007	211,063	12.2%
British Columbia	123,571	131,044	254,615	14.7%
Manitoba	27,294	23,398	50,692	2.9%
New Brunswick	19,179	13,818	32,997	1.9%
Newfoundland and Labrador	13,917	7,178	21,095	1.2%
Northwest Territories	1,476	821	2,297	0.1%
Nova Scotia	21,719	17,176	38,895	2.3%
Nunavut	558	187	745	0.0%
Ontario	275,895	382,262	658,157	38.1%
Prince Edward Island	4,298	2,372	6,670	0.4%
Quebec	182,283	216,422	398,705	23.1%
Saskatchewan	28,022	20,158	48,180	2.8%
Yukon Territory	1,345	963	2,308	0.1%
CANADA	804,613	921,806	1,726,419	100.0%
Percent Distribution	46.6%	53.4%	100.0 %
Notes : Source: Statistics Canada, Business Patterns Database, December 2003

Top of Page

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 Services-Producing Industries (NAICS 41 to 91).

Number of Establishments in Canada by Employment Size Category and Region Services-Producing Industries (NAICS 41 to 91) December 2003
Province or Territory	Employment Size Category (Number of employees)
	Micro 1-4	Small 5-49	Medium 50-499	Large 500+
Alberta	58,949	41,269	4,618	220
British Columbia	70,975	47,211	5,107	278
Manitoba	13,707	11,964	1,536	87
New Brunswick	10,525	7,790	823	41
Newfoundland and Labrador	8,469	4,920	484	44
Northwest Territories	589	789	96	2
Nova Scotia	11,519	8,985	1,148	67
Nunavut	174	334	49	1
Ontario	149,331	110,697	15,030	837
Prince Edward Island	2,139	1,959	191	9
Quebec	113,040	61,883	6,862	498
Saskatchewan	14,741	12,038	1,191	52
Yukon Territory	666	606	71	2
CANADA	454,824	310,445	37,206	2,138
Percent Distribution	56.5%	38.6%	4.6%	0.3%
Notes: Source: Statistics Canada, Business Patterns Database, December 2003.

In 2003, there were 804,613 employer establishments in the Services-Producing Industries group. Of these employer establishments, 56.5% were considered micro, less than five employees. Small and medium-sized establishments accounted for an additional 43.2% 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 services-producing industries.

Top of Page

The table below describes the number of establishments by employment size category and by sector - focussing only on the fifteen services-producing sectors of the economy.

Number of Establishments in Canada by Employment Size Category and Sector Services-Producing Industries NAICS 41 to 91 December 2003
NAICS Code	Sector	Employment Size Category (Number of employees)
		Micro 1-4	Small 5-49	Medium 50-499	Large 500+
41	Wholesale Trade	32,729	29,002	3,402	61
44-45	Retail Trade	60,037	65,222	6,898	103
48-49	Transportation and Warehousing	31,317	12,772	1,958	129
51	Information and Cultural Industries	7,444	5,220	1,097	79
52	Finance and Insurance	17,740	14,921	1,813	155
53	Real Estate and Rental and Leasing	25,182	13,559	1,340	37
54	Professional, Scientific and Technical Services	81,302	30,670	3,048	109
55	Management of Companies and Enterprises	10,282	5,739	928	47
56	Administrative and Support, Waste Management and Remediation Services	27,833	17,249	2,455	129
61	Education Services	6,037	4,318	859	425
62	Health Care and Social Assistance	47,718	30,663	4,037	394
71	Arts, Entertainment and Recreation	10,313	6,809	920	41
72	Accommodation and Food Services	29,605	40,393	5,538	70
81	Other Services - except Public Administration	64,985	29,947	1,564	39
91	Public Administration	2,300	3,961	1,349	320
Services-Producing Industries		454,824	310,445	37,206	2,138
Percent distribution		56.5%	38.6%	4.6%	0.3%
Notes : Source: Statistics Canada, Business Patterns Database, December 2003.

SME's are the dominant establishment size category in all sectors of the economy. More detailed data for 2003 illustrates that micro-establishments represent the largest component of the total number of employer establishments for all services-producing industries. This statement is true across all of the sectors within the services-producing definition, with the exception of the retail trade, accommodation and food services, and public administration sectors.

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 Professional, Technical and Scientific Services, where 70.6% of the total number of employer establishments in this sector were considered micro.

Based on 2003 data for the services-producing sector, large establishments are relatively more significant in the Educational Services and Public Administration sectors. In the Educational Services and Public Administration sectors, large establishments represented 3.7% and 4.0% of their total number of employer establishments respectively. In all other sectors within the services-producing definition, large establishments represent less than 1% of the total number of employer establishments.