SMEs in Canada Facts Federal Role

1 Outline Overview of SMEs in Canada Roles of Government

2 Overview of SMEs in Canada – Key Statistics Are defined as firms that have fewer than 500 employees –99.8% of the 1.1 million businesses with employees are SMEs –98% are small businesses (less than 100 employees) –75% have fewer than 10 employees SMEs employ 2/3 of the private sector work force (6.4 million employees) SMEs account for 40% of the GDP (or 54 percent of private sector GDP) SMEs are in constant renewal (about 100,000 new firms created every year) - 51% of Canadian businesses survive their first 5 years. SMEs regularly account for more than 50% of net job creation (small businesses 43%) SMEs account for 41% of the value of export (small businesses 25%) Source of data: Key Small Business Statistics, July 2012, Industry Canada; Statistics Canada.

3 Overview of SMEs in Canada - employment Source: Key Small Business Statistics, July 2012, Industry Canada; Statistics Canada Number of Employees (thousands) Five sectors account for 60 percent of total SME employment: –Retail trade –Manufacturing –Accommodation and food –Construction –Professional Services On average, SMEs with less than 20 employees accounted for 40 percent of total employment in these sectors Firms in the manufacturing sector tend to be larger

4 Federal Government Support for SMEs Support for SMEs involves over 20 government departments including: –Industry Canada –Public Works and Government Services Canada –National Research Council –Finance Canada –Citizenship and Immigration Canada –Federal Regional Economic Development Agencies

5 Overview of Key Industry Canada Programs Business Development Bank of Canada (BDC) The BDC is a Crown financial institution, reporting to the Minister of Industry, with a mandate to support Canadian entrepreneurship by providing financing, consulting and venture capital to SMEs In 2012, as part of the Government's Digital Economy Strategy, the BDC launched a strategy to promote the adoption of information and communications technologies by SMEs Canada Small Business Financing Program (CSBFP) Loan-loss sharing program that increases the availability of asset based debt financing for small businesses Industry Canada and commercial lenders share the risk of providing term loans to small businesses of up to $500K

6 Overview of Key Industry Canada Programs - Continued Canada Youth Business foundation (CYBF) The CYBF is a non-profit organization founded in 1996 that provides loans and mentoring services to young entrepreneurs In Budget 2011, the government provided CYBF $10M in both and Since 2002, the CYBF has received $57.5M in funding from the federal government BizPaL Launched in 2006, BizPaL is an online service that benefits Canadian businesses by helping them identify which permits and licences they require to start and/or run a business and how to obtain them BizPaL is currently available to 60% of the Canadian population and includes all the provinces and two territories and over 645 municipalities

7 Overview of Key Industry Canada Programs - Continued Canada Business Network (CBN) CBN provides Canadian entrepreneurs and SMEs with reliable, up-to-date and relevant information Services are offered through a national website, a toll-free telephone service, and in-person service centres located across Canada National Research Council Industrial- Research Assistance Program (NRC-IRAP) NRC-IRAP is designed to stimulate innovation in Canadian SMEs by helping them access, develop and apply technologies to create new products, services and industrial processes The Budget includes the Digital Technology Adoption Pilot Program (DTAPP) funding of $80M over three years announced in Budget DTAPP provides digital technology adoption and adaption support to firms and supports up to $100,000 in costs per project

8 Overview of Key Support Agencies & Programs Canadian Innovation Commercialization Program (CICP) The CICP is a Public Works and Government Services Canada initiative aimed at helping Canadian businesses by testing their innovative products and services within the Government of Canada before taking them to the marketplace. It targets innovations in four priority areas, namely the environment, enabling technologies, health, safety and security Funding limit is $500K per bid opportunity with provisions for proposals exceeding $500K on a case-by-case basis. Western Economic Diversification Canada (WD) WD is mandated to promote the development and diversification of the economy of Western Canada and advance the interests of Western Canada in national economic policies and programs. It is currently delivering Infrastructure Canada programs such as the Building Canada Fund - Communities Component, and the Community Infrastructure Improvement Fund announced in Budget WD will soon be launching the Western INNovation Program which was announced in Budget 2102 and which will provide support to SMEs in Western Canada for technology commercialization activities

9 Overview of Key Support Agencies and Programs Federal Economic Development Initiative in Northern Ontario (FedNor) FedNor is a regional development organization in Ontario with a mandate to promote economic diversification and expansion of the Northern Ontario economy. The Northern Ontario Development Program (NODP) is FedNor’s main contribution program Through the NODP, FedNor invests in projects that support community economic development, business growth and competitiveness, and innovation Since April 2006, FedNor has approved more than $238 million in support of 1,224 projects through the NODP to benefit Northern Ontario’s economy Federal Economic Development Agency for Southern Ontario (FedDev Ontario) FedDev was created in 2009 in response to southern Ontario’s economic challenges. Its current focus is on creating a southern Ontario advantage by strengthening the region’s economy and positioning southern Ontario to compete globally FedDev supports SMEs by providing funding to Community Futures Development Corporations to support local business and community development initiatives, via the Eastern Ontario Development Program and the Southern Ontario Fund for Investment in Innovation

10 Overview of Key Support Agencies and Programs- continued Canada Economic Development (CED) The Quebec Economic Development Program (QEDP) contributes to entrepreneurship support, business performance, regional engagement and regional investment, while providing temporary support for economic activity in Quebec communities to stabilize or strengthen their economies The Community Futures Program (CFP) supports local economic development and builds the capacity of communities to sustainably realize their full potential CED delivers the CFP in Quebec through regional development agencies, including the 56 Community Futures Development Corporations and the 10 Business Development Centres Atlantic Canada Opportunities Agency (ACOA) ACOA works to create opportunities for economic growth in Atlantic Canada, by helping businesses become more competitive, innovative and productive, and by working with communities to develop and diversify local economies ACOA supports Community Business Development Programs (CBDP) through the Community Futures Program which helps them provide essential investment capital, business counselling and skills development

11 Annex A Other Government Support for SMEs

12 Annex A Other Government Support for SMEs (continued)