Report by the Canadian Federation of Independent Business – Self employment: the force behind Canada�s job creation record

May 22, 2008 – Toronto � Canada has an enviable job creation record, and, one of the main reasons for the country�s success is a massive increase in the number of self-employed people running incorporated businesses. A Nation of Entrepreneurs, the latest report by the Canadian Federation of Independent Business, found the number of self employed increased by 18.6 per cent between 2001 and 2006 � more than double the rate of total employment growth. The 2006 Census findings published earlier this year revealed that Canada�s job creation was the best among G7 nations during the first half of this decade.

�Not only did these individuals create their own jobs but they also became employers in much greater numbers,� says the report�s author, CFIB Chief Economist Ted Mallett. �The increases were the largest seen in the incorporated segment in 20 years, and far larger than the mere 1.6 per cent change in the number of self employed in unincorporated businesses.�

CFIB�s report attributes this shift towards more-formalized businesses to a variety of factors that include:

  • Maturing of previously informal businesses
  • Tax and regulatory policy that encouraged business formation
  • Maturing of technologies that allow smaller firms to operate productively
  • Demographics

The census findings also show for the first time in recent memory nearly equal growth rates of self employment among men and women. Within incorporated businesses, the growth rate among women was 19 per cent between 2001 and 2006 and 18.4 per cent for men. Age is also an important factor; three-quarters of the net growth in self employment came from women and men in the 45-to-64 year age group.

Provincial findings generally reflected the national findings. In virtually all regions, incorporated self employment grew significantly faster than either employment or unincorporated self employment. The biggest gains were in the Prairies with Alberta and Manitoba recording an increase of 27.2 per cent and 23.6 per cent respectively in incorporated self employment. New Brunswick showed the next highest growth at 23.3 per cent.

�With this greater �do-it-yourself� capability among the workforce, the economy is far more resilient to business cycles and external shocks. Moreover, business creation is one of the significant drivers of long-term GDP growth,� Mallett concluded.

For more information, contact Judy Langford or Gisele Lumsden at 416-222-8022. The full report is available at

CFIB is Canada�s largest association of small- and medium-sized businesses. Encouraging the development of good public policy at the federal, provincial and municipal levels, CFIB represents more than 105,000 business owners, who collectively employ 1.25 million Canadians and account for $75 billion in GDP.