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TORONTO, October 14, 2009 – Not only will the great majority of Canada's small businesses survive the recession, but as the recovery continues, many will be stronger than ever, according to a major study released today by BMO's Economics Department.

The report, Canada's Small Business Juggernaut, by BMO Chief Economist, Dr. Sherry Cooper, assesses the strength of small business formations in communities across Canada; it identifies the small business Hotbeds among the country's 33 largest cities and measures small business intensity in those centres and the nation's 111 small cities. Dr. Cooper's report, a post-recession perspective of this vital segment of Canada's economy, offers an optimistic prognosis for Canadian entrepreneurs.

“Today, business understands the importance of maintaining sufficient capital to ride the cyclical bumps,” said Dr. Cooper. “There is a new appreciation for the dangers of building up too much overhead or overinvesting in every new technological system. Companies that survived the recession will have learned to be flexible, to be low-cost/high-value businesses.”

“This report's findings bear out what we are seeing from our business clients across Canada,” said Gail Cocker, Senior Vice-President, Commercial Banking, BMO Bank of Montreal. “For many there is still a cautious ‘wait-and-see' attitude, but there are signs that confidence is re-emerging.”

Although a moderate economic recovery is underway, Dr. Cooper cautioned small businesses against settling into a comfort zone. “‘Business as usual' is a concept of the past, as economic forces are subject to intense volatility and change. Whether it's expanding into unknown markets, refocusing customer bases, or jettisoning non-core businesses, successful enterprises should not be afraid to forego the familiar and embrace the risks that can lead to higher rewards. But prudent analysis of the risks and opportunities is essential.”

“BMO is working hard to be there for our business customers, to ensure they have the banking solutions and advice they need to take their companies into the future,” said Ms. Cocker.

BMO Economics examined the latest data to assess the intensity of small business activity in communities across Canada, by ranking the number of small business enterprises per one thousand population. This was done for large centres by looking at each of the 33 Canadian census metropolitan areas (CMAs), and for small centres by examining each of the 111 Canadian census agglomerations (CAs).

The study reviews the five-year growth figures for small businesses in the 33 CMAs. The report identified Hotbed growth areas in three regions: Ontario's Greater Golden Horseshoe region (Toronto, Guelph, Oshawa, and Barrie); Alberta's Calgary-Edmonton corridor; and, British Columbia's Lower Mainland and southern Vancouver Island (Vancouver, Abbotsford, and Victoria).

TOP 10 CMA SMALL BUSINESS GROWTH, 2004-2009 (% change in number)

1. Toronto, ON (15.1)
2. Guelph, ON (13.8)
3. Abbotsford, BC (10.2)
4. Vancouver, BC (9.3)
5. Oshawa, ON (9.1)
6. Kelowna, BC (8.4)
7. Calgary, AB (7.4)
8. Barrie, ON (6.6)
9. Ottawa-Gatineau, ON/QC (6.3)
10. Victoria, BC (6.1)

Looking at the intensity of small business activity, British Columbia, Alberta and Saskatchewan centres dominate the Top Ten lists for larger and smaller urban communities. Other centres in the Top Ten list include: St. John's, NL, Moncton, NB, and Toronto, ON.

TOP 10 CMA SMALL BUSINESS HOTBEDS (# small businesses/1,000 pop)

1. Kelowna, BC (39.7)
2. Calgary, AB (38.9)
3. Vancouver, BC (37.2)
4. Edmonton, AB (36.6)
5. Victoria, BC (35.0)
6. St. John's, NL (32.9)
7. Moncton, NB (32.4)
8. Abbotsford, BC (32.2)
9. Saskatoon, SK (31.9)
10. Toronto, ON (30.0)

TOP 10 CA SMALL BUSINESS HOTBEDS (# small businesses/1,000 pop)

1. Fort St. John, BC (71.2)
2. Lloydminster, AB/SK (69.0)
3. Canmore, AB (57.9)
4. Camrose, AB (54.9)
5. Okotoks, AB (54.1)
6. Grande Prairie, AB (53.8)
7. Brooks, AB (51.0)
8. Swift Current, SK (51.0)
9. Salmon Arm, BC (50.4)
10. Estevan, SK (50.2)

The complete report can be found at www.bmocm.com/economics.

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