Recently we looked at the present situation for self-employed workers in the USA, and dug into the historic data trends that have brought us to this point. Today we’re following up on that by applying the same analysis to the Canadian economy. As with the rest of the economy, self-employment in Canada has seen less volatility over the last 10 years than its American counterpart. But under the surface there have still been a number of significant developments.
National and Provincial Job Trends
Unlike the US — where self-employment has declined conspicuously over the last decade — self-employment in Canada has been very consistent since 2001. Canada as a whole reported just under 2,336,000 self-employed workers in 2001. This total dipped slightly the next year. Over the next 10 years, however, this number proceeded to grow slowly but steadily almost every year, including an uninterrupted increase between 2002 and 2010, when there were 2,683,000 self-employed workers in Canada. That number declined to 2,673,000 by 2012, but increased again to 2,684,000 in 2013.
Much like the job totals, which have been close to static, the percentage of the Canadian workforce represented by self-employment has also been quite steady. However, rather than a slow increase, it has been gradually declining, down from 14.9% in 2001 to 14.6% in 2012 and 2013. This means that, while self-employment in Canada isn’t precisely unhealthy, it also isn’t keeping up with the growth of the Canadian workforce as a whole.
Of course these numbers describe the entirety of Canada, but, looking at the individual provinces, the stories don’t vary much. The chart below shows what percentage of each province’s workforce was self-employed in 2001 and 2013. (Due to very low numbers, the northern territories were omitted.)
With the exception of Ontario, which saw a very modest increase from 14.7% to 15.0%, and Nova Scotia, up only .1%, every province in Canada saw self-employment growth lag behind the growth of the total workforce.
Industries and Occupations
Not surprisingly, the single largest industry for self-employment in Canada is farming, which included 183,000 self-employed jobs in 2012. That was more than 40% of the total jobs in farming — but it was also a sharp decline from a decade earlier, since there were 221,000 self-employed farming jobs in 2001. Of the industries with the largest numbers of self-employed people, however, farming was the only industry to have shown a decline against 2001. As the chart above shows, many industries showed very significant increases in self-employment, such as offices of real estate agents and brokers (70%), scientific and technical consulting management (79%), and the big leader, residential building construction (up 100% from 2001). The leading self-employment industries by jobs added are shown in the chart below.
It’s especially noteworthy to see the number of industries on the chart that are connected to construction. The leader, as mentioned earlier, is the explosive growth of residential building construction itself, but services to buildings and dwellings also added over 30,000 jobs, and building finishing contractors added over 19,000. Architects were growing quickly too (in contrast to the US, where job growth for architects has been limp for years), with almost 19,000 new jobs.
Canada’s leading occupations for self-employment look very similar to the leading industries, with farmers, construction workers, and real estate agents near the lead. The largest group, however, is retail trade managers — small-business owners, in other words — with 172,000 jobs. Like farmers, retail trade managers are slipping, down by 27,000 jobs. Farmers have declined by just under 30,000. Touching on what’s been a recurring theme in the Canadian economy, truck drivers increased by almost 20% (likely as a result of the Alberta oil economy), and self-employed bookkeepers also grew by over 40% to 54,400.
Ranking the occupations by jobs added, the leaders are again residential home builders and renovators, as wells as professional occupations in business services to management, which is the main occupation in the scientific and technical consulting industry that we saw in the leading industries. The number of people going into business as photographers has increased by over 150%, growing from 6400 to 16,400. And a number of the other leaders also expanded by very high percentages — real estate agents by 73%, program leaders and instructors in recreation, sports, and fitness by 140%, and specialist physicians by 53%.
Overall, then, the self-employment landscape in Canada has spent the last 10 years holding steady on the surface while experiencing significant churn beneath the surface. Numerous industries and occupations have seen significant self-employment growth, especially construction, which has been extremely strong nationwide for years. But the gains those industries have made have been undercut by the rapid loss of jobs in traditional self-employment sectors, especially farming, which remains the largest self-employment sector despite having lost jobs steadily over the last decade as the Canadian economy moves in new directions. Over the coming years it will be essential to watch the construction sector; if it slows down or collapses, then self-employment in Canada may take a drastic hit. For now, however, a wide range of occupations and industries are adding self-employed workers, creating an interesting and diverse climate for those looking to go into business for themselves.
Note: In comparison with the data we published on self-employment in the United States, this article shows extremely high rates of self-employment for Canada. While it may be that Canada does have more self-employment than the US, it should be remembered that the two nations do not use the same criteria for deciding what constitutes self-employment. As a result, there may be more value in comparing the trends in the data than in comparing the specific percentages.
Data for this post came from Analyst for Canada. For more info or to see data for your region, email Josh Wright. Follow us on Twitter @DesktopEcon.
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