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The number of small businesses in Canada has grown by more than 10 per cent since 2002 with the fastest growing areas in the country generating increases in the 20 per cent to 40 per cent range, according to a new BMO Economics study.

The report, titled ‘Canada’s Small Business Hotbeds: Latest Trends’,  examined 130  large and smaller communities across the country to determine which centres have the highest number of small businesses per capita as well as which communities have experienced the fastest growth in new businesses over the 2002-2004 period.  The study, an update of a BMO study completed more than two years ago, found that although small businesses are an important part of every community across Canada,  Alberta and British Columbia centres dominate the rankings with Saskatchewan, Ontarian and Quebec communities also figuring prominently.

“This study shows that entrepreneurship continues to be a significant economic development and employment force in Canada,” said Michelle Field, Vice President, Business Banking, BMO Bank of Montreal. “Over 30 per cent of Canadians now either run or work for a small business with fewer than 50 employees and we are seeing that number increase every year.”

“Growth in small businesses with payrolls has come from sectors right across the board,” said Rick Egelton, Chief Economist at BMO Financial Group. “Small businesses overwhelmingly dominate the primary sectors of farming, forestry, fishing and hunting and are particularly concentrated in construction, retail and certain service sectors.”

The study found that of the Census Metropolitan Areas or CMA’s (defined as metropolitan areas with populations of more the 100,000), Calgary continues to receive top ranking in having the most small businesses per capita (35.9 payroll enterprises per 1,000 population).  Edmonton, Vancouver, Victoria and Abbotsford ranked next on the list.  The only change to this ranking from the 2003 study is Abbotsford, which replaces Saskatoon in the number five spot.

Between the years 2002 and 2004 the CMA’s with the fastest growth rate of small businesses with payrolls were Kingston (5.6 per cent), Abbotsford (2.6 per cent) Edmonton (2.1 per cent), Sherbrooke (1.9 per cent) and Oshawa (1.5 per cent).  Only Edmonton and Oshawa are holdovers on the top five list from 2003.

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‘Canada’s Small Business Hotbeds’ also examines Census Agglomerations (CAs), which are those areas with populations of at least 10,000 but less than 100,000. Of the 108 CA’s examined, Fort St. John, BC has the highest number of payroll based enterprises at 48.5 per 1,000 residents, with the top five list being rounded out by Grande Prairie, Alberta (47.6), Whitehorse, Yukon (47.0), Lloydminster, Alberta (46.8) and Swift Current, Saskatchewan (43.1).  All these cities were also on the top five CA list in 2003, however Fort St. John has replaced Whitehorse in the number one spot.

The top ranked fastest growing small business CA’s between 2002 and 2004 are all in Ontario.  The leading growth area is Port Hope at 37.7 per cent, followed by Tillsonburg (32.2 per cent), Brockville (25.3 per cent), Stratford (20.0 per cent) and Woodstock (13.8 per cent).   None of these communities made the top five ranking in the 2003 study.

The full ‘Canada’s Small Business Hotbeds: Latest Trends’ study produced by BMO Financial Group Economics Department is available at www.bmo.com/economic.

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $290 billion as at July 31, 2005, and more than 34,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and solutions. BMO Financial Group serves clients across Canada through its Canadian retail arm, BMO Bank of Montreal, and through BMO Nesbitt Burns, one of Canada’s leading full-service investment firms. BMO Financial Group is one of the largest small business lenders in North America.

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