According to a CIBC Capital Markets report, Canadian SMEs created 42% of all new jobs in Canada between 2010 and 2016, but there are still areas where SMEs need more support to reach their true potential.
The number of new jobs created between 2010 and 2016 represented a 30% increase in job creation from the 2000 to 2010 period. This growth has been driven by SMEs with more than 5 employees, with Benjamin Tal, Deputy Chief Economist at CICB saying: “Beyond the threshold of five employees, there is a clear positive correlation between size and growth, with larger firms within the SME spectrum seeing progressively stronger growth recently”.
RFi Group SME Banking Council research suggests the strong hiring performance of SMEs will continue, with 2 in 5 SMEs looking to expand their business in 2017.
Only 15% of small business owners are between the ages of 25 and 39, an age group that makes up 25% of the population, in comparison to 47% between the ages of 50 and 64, which also makes up 25% of the total population.
Despite this strong performance, CIBC also identified some key areas where SMEs could use additional support. One of these was in providing financing to younger entrepreneurs. According to the report, only 15% of small business owners are between the ages of 25 and 39, an age group that makes up 25% of the population, in comparison to 47% between the ages of 50 and 64, which also makes up 25% of the total population, with Tal putting this down to difficulties faced by young business owners accessing financing.
Another area where SMEs have an opportunity to expand is through exporting. Currently, only 10% of SMEs export, with 90% of those only exporting to the US. Increasing access to services that will enable SMEs to export could therefore be valuable to supporting the SME market in Canada.
Source: RFi Group Canada SME Banking & Payments Council H2 2016