Skip navigation
Navigation skipped

News Releases

Growth in Small and Medium Business Employment Double that of Large Business Over Past Twenty Years, Says BMO Financial Group Economic Study  


Since 1983, employment at small and medium sized enterprises (SMEs) has grown by a compound average of 2.4 per cent a year, more than double the rate generated by large businesses, according to a study released today by BMO Financial Group.  Of the 4.7 million new jobs created in Canada over the past twenty years, small and medium sized business accounted for 78 per cent.

“The SME share of total employment has been trending up over the past two decades to the point that, today, 63 per cent of employed Canadians are working for companies which have fewer than 500 employees,” said Michael Gregory, Assistant Chief Economist, BMO Financial Group.   “In fact, the largest segment of the Canadian workforce, or 43 per cent of the total, work at companies with fewer than 50 employees.”

Gregory also noted however that “despite their proficiency at producing jobs, SMEs exhibit more volatile patterns of employment than do large firms. This reflects the fact that smaller firms are more vulnerable to economic swings than larger firms, as smaller firms tend to have less diversified production and more localized market participation.”

According to the report, the SME sector can be divided into six segments.  Among the nearly 10 million Canadians that were employed in this sector during the first half of this year:

  • 24.2% were self-employed (2.4 million);
  • 9.6% were in businesses with fewer than five employees (0.9 million);
  • 18.8% were in firms with 5 to 19 employees (1.9 million);
  • 15.0% were in enterprises with 20 to 49 employees (1.5 million);
  • 11.6% were in businesses with 50 to 99 employees (1.1 million); and
  • 20.8% were in firms with 100 to 499 employees (2.1 million).

The study found that within the SME sector, different segments grew at different rates.  For example, the fastest growing segment was businesses with between 50 and 99 employees, which grew at a compound rate of 3.5 per cent.  Conversely, the small business segment with the fewest employees (those with fewer than 5 employees) grew by only 0.8 per cent annually over the past twenty years.

The new study, called “SME Job Engine Drives Canadian Employment Growth”, is the third in a series of small business research studies released this year by BMO Financial Group Economics Department.  The full study can be found on the BMO Economics website at

BMO Financial Group (TSX, NYSE: BMO) is one of the largest financial services providers in North America.  BMO serves clients across Canada and in the United States through its Canadian retail arm, BMO Bank of Montreal, through its Chicago-based Harris Bank, a major U.S. mid-west financial services organization, and through BMO Nesbitt Burns, one of Canada’s leading full-service investment firms.  BMO Financial Group is the second largest small business lender in Canada and one of the largest in North America.