Canada had 1,079,188 small businesses as of December 2024, 98.2% of the country’s 1,099,521 employer businesses, according to Innovation, Science and Economic Development Canada’s (ISED) Key Small Business Statistics 2025 report, built on Statistics Canada’s Business Register. That single number covers everything from a two-person landscaping crew to a 99-employee software shop. The more useful story sits underneath it: where those businesses are located, how long they last, and how much of the economy they actually carry.
How many small businesses are there in Canada?
ISED counted 1,079,188 small businesses, defined as employer firms with 1 to 99 employees, operating in Canada as of December 2024. That is 98.2% of the 1,099,521 employer businesses on record in the Business Register, leaving just 20,333 businesses classed as medium or large.
The size distribution is heavily skewed toward the small end, and the gap between small and everything above it is enormous.
| Size band | Businesses | Share of all employers |
|---|---|---|
| Small (1-99 employees) | 1,079,188 | 98.2% |
| Medium (100-499 employees) | 16,953 | 1.5% |
| Large (500+ employees) | 3,380 | 0.3% |
Figure 1: Share of Canadian employer businesses by size band. Source: ISED, Key Small Business Statistics 2025, Statistics Canada Business Register, December 2024.
That 1,079,188 figure only covers businesses with at least one paid employee. It excludes the much larger population of self-employed Canadians who work alone with no staff on the books, a group ISED tracks separately as indeterminate businesses rather than folding into the employer count above.
What counts as a small business in Canada?
ISED uses a straightforward employee-count test for its national statistics: any employer business with 1 to 99 employees is small, 100 to 499 is medium, and 500 or more is large. That single threshold produces the 1,079,188 figure used throughout this article and is the number most researchers and journalists cite for Canada’s small business population.
Some federal programs apply a narrower cutoff. The Canada Small Business Financing Program, for example, uses a revenue test of $10 million or less in gross annual revenue rather than a headcount, which pulls in a slightly different set of firms than the employee-count definition does. For general statistical reporting, though, the 1-to-99-employee band is the working standard, and it is the one this article uses throughout.
Figure 2: How ISED’s national small business definition is built. Source: ISED, Key Small Business Statistics 2025 methodology.
Whichever definition a business owner is reading, publishing clear terms for customers is not optional once that first employee or that first sale happens. A terms and conditions generator built for solo operators and small teams gets that document live in minutes rather than requiring a lawyer for a two-page policy.
Which provinces have the most small businesses?
Ontario and Quebec together account for 638,776 small businesses, 59.2% of Canada’s total, according to ISED’s provincial breakdown. Ontario alone holds 410,154, more than a third of every small business in the country, with Quebec second at 228,622.
Figure 3: Canada’s four largest provinces by small business count. Source: ISED, Key Small Business Statistics 2025, December 2024.
Raw counts favor the biggest provinces simply because they have the most people, so ISED also reports businesses per 1,000 adults to normalize for population. By that measure, Alberta and British Columbia lead at 36.3 per 1,000 adults, well above the national average of 32.7, while Newfoundland and Labrador trails at 27.9. Density and raw count tell different stories: Ontario has the most businesses, but Alberta and British Columbia have the most businesses relative to their population.
How many small businesses open and close each year in Canada?
Canada’s business birth rate ran at 9.2% in 2021, the most recent year ISED’s business dynamics tables cover, up from 8.0% in 2020 but still below the 10.0% rate recorded in 2019. Statistics Canada’s business dynamics data typically lags two to three years behind the current calendar year because it tracks confirmed entries and exits rather than provisional registrations, so treat 2021 as the latest confirmed cohort rather than a current-year figure.
Figure 4: Canadian business birth rate by year. Source: ISED, Key Small Business Statistics 2025, business dynamics tables.
Goods-producing and services-producing sectors move differently: in 2021, goods-producing birth rate sat at 6.4% against 7.9% for services, a gap that held across each of the three years above. The 2020 dip lines up with the first year of pandemic disruption, and the partial rebound to 9.2% in 2021 has not yet been confirmed as a sustained recovery in the latest published tables.
How long do small businesses in Canada survive?
Survival drops sharply the further out you measure. Of businesses founded in a given year, 94.8% are still operating one year later, 79.9% survive to three years, and just 68.0% are still trading at the five-year mark, according to ISED’s analysis of Statistics Canada business dynamics data.
Figure 5: Small business survival rate at one, three, and five years. Source: ISED, Key Small Business Statistics 2025, business dynamics tables.
The goods-producing sector holds a slight edge at the five-year mark, with 69.7% still operating versus 67.5% for services-producing businesses. That gap is modest next to the overall drop from 94.8% to 68.0%, which is the bigger signal: roughly one in three small businesses that open in Canada will have closed within five years, regardless of industry.
How much do small businesses contribute to Canada’s economy?
Small and medium businesses combined generated 47.2% of Canada’s GDP in 2022, with small businesses alone contributing 33.2 percentage points and medium businesses the remaining 14.0, according to ISED’s GDP-by-firm-size tables. That share has held close to a five-year average of 47.8% across 2018 to 2022, with the goods-producing sector running higher at 50.2% SME contribution versus 46.4% for services-producing industries.
| Contributor | Share of Canada’s GDP (2022) |
|---|---|
| Large businesses (500+) | 52.8% |
| Small businesses (1-99) | 33.2% |
| Medium businesses (100-499) | 14.0% |
Figure 6: Contribution to Canada’s GDP by business size band. Source: ISED, Key Small Business Statistics 2025, GDP-by-firm-size tables, 2022 data.
SMEs also carry a real share of Canada’s trade. SMEs accounted for 37.9% of Canada’s total goods export value in 2024, worth $712.8 billion, and made up 73.3% of all exporting enterprises by count. Small businesses alone contributed 16.7 percentage points of that export value and medium businesses 21.2. Non-employer businesses, the self-employed operators outside the 1,079,188 count above, added a further 6.2% of private-sector GDP and represented 24.1% of all exporters by number, even though they contributed only 2.1% of total export value.
How many people work for small businesses in Canada?
Small businesses employed 5.8 million people in 2024, 46.6% of Canada’s private-sector workforce, according to ISED’s Key Small Business Statistics 2025. Widen that to every SME, businesses with 1 to 499 employees, and the figure climbs to 8.0 million people, 63.6% of the private sector. Large businesses with 500 or more employees, despite representing just 0.3% of Canadian businesses, still employ more than a third of the private-sector workforce between them.
That concentration means small business hiring decisions carry outsized weight in local labor markets, particularly outside the biggest metro areas where a handful of employers can dominate a town’s payroll. Nearly half the country’s private-sector paychecks trace back to a business with fewer than 100 employees on staff.
Do women-owned small businesses grow at the same rate as male-owned firms?
Majority female-owned businesses launched at an 11.8% birth rate between 2018 and 2022, higher than the 9.6% rate for majority male-owned firms, according to ISED’s ownership-by-gender tables. In raw numbers that works out to roughly 13,591 majority female-owned businesses created each year versus 46,722 majority male-owned, reflecting how much smaller the existing base of female-owned firms is rather than a lack of momentum.
Survival tells a slightly different story than the birth rate does. Majority female-owned businesses have a five-year survival rate of 78.2%, just under the 80.2% rate for majority male-owned firms, a two-point gap that has held fairly steady across the 2018-2022 window ISED reports. Faster formation has not yet closed the survival gap, which is worth watching in future editions of this report.
How does Canada’s small business population compare internationally?
Canada’s 1.08 million small businesses sit in a different league from some peer economies by count alone. Our count of small businesses in Australia put that country at 2.66 million, more than double Canada’s figure despite Australia having roughly two-thirds of Canada’s population, a gap that traces back to differing size-band definitions as much as any real difference in entrepreneurial activity. Australia’s national count uses a under-20-employee threshold rather than Canada’s under-100 test, which mechanically shrinks the population of firms that qualify as small in the first place.
Whatever the exact international comparison, the underlying operational challenge is the same everywhere: getting a business online and legally covered before the first customer shows up. Our companion analysis of small business website adoption looks at how many owners have gotten that far and what is still holding the rest back.
The Bottom Line
The number worth remembering is not just 1.08 million, it is that those small businesses generate 47.2% of Canada’s GDP while making up 98.2% of the country’s employer businesses, and that roughly one in three of them will not make it to a five-year anniversary. If you are running or planning a small business in Canada, the practical numbers to plan around are a survival curve that drops fast in the first three years, an economy where nearly half of private-sector jobs already sit inside a small firm, and a business population concentrated in Ontario and Quebec but growing fastest per capita in Alberta and British Columbia.
Frequently Asked Questions
How many small businesses are there in Canada? Canada had 1,079,188 small businesses as of December 2024, 98.2% of all 1,099,521 employer businesses in the country, according to Innovation, Science and Economic Development Canada’s Key Small Business Statistics 2025 report, built on Statistics Canada’s Business Register.
What counts as a small business in Canada? ISED classifies any employer business with 1 to 99 employees as small for its national statistics. Businesses with 100 to 499 employees count as medium, and 500 or more as large. Self-employed people with no employees are tracked separately as indeterminate businesses.
How many people work for small businesses in Canada? Small businesses employed 5.8 million people in 2024, 46.6% of Canada’s private-sector workforce, according to ISED’s Key Small Business Statistics 2025. Including medium-sized firms, all SMEs together employed 8.0 million people, 63.6% of the private sector.
How long do small businesses in Canada survive? 68.0% of Canadian small businesses are still operating five years after founding, down from 79.9% at three years and 94.8% at one year, according to ISED’s analysis of Statistics Canada business dynamics data.
Sources and References
- Innovation, Science and Economic Development Canada. (2025). “Key Small Business Statistics 2025.” Business counts by size band and province, December 2024 snapshot, sourced from Statistics Canada’s Business Register.
- Innovation, Science and Economic Development Canada. (2025). “Key Small Business Statistics 2025.” Business dynamics tables: birth rate (2019-2021) and one-, three-, and five-year survival rates.
- Innovation, Science and Economic Development Canada. (2025). “Key Small Business Statistics 2025.” GDP-by-firm-size (2018-2022) and SME goods export value tables, 2024 export data.
- Innovation, Science and Economic Development Canada. (2025). “Key Small Business Statistics 2025.” Women entrepreneurship tables: birth and survival rates by majority ownership gender, 2018-2022.
- Statistics Canada. Business Register and business dynamics methodology underlying ISED’s Key Small Business Statistics series.
Note: All figures verified as of September 2026. Canada’s small business population figures are refreshed at least twice a year as ISED and Statistics Canada release updated Key Small Business Statistics editions.
