Study Shows Self-Employment Growth Could Boost GDP

- After a decline during the pandemic, self-employment in Canada rebounded in 2024 with the addition of approximately 70,000 self-employed individuals. This brings the total number of self-employed Canadians to two million. - Small and medium-sized enterprises (SMEs) are a significant force in the Canadian economy, representing 98% of all businesses and contributing about 48% of the country's GDP. They are also major employers, accounting for nearly 64% of private sector jobs. - A critical transition point for economic growth is when solo operators hire their first employee, effectively becoming employer entrepreneurs. Nearly half of all new micro-businesses are started by self-employed individuals who take this step. - One of the main obstacles for self-employed individuals looking to expand is access to financing, with 73% relying on personal funds to operate their businesses. - The BDC's Chief Economist, Pierre Cléroux, has highlighted the self-employed as a "hidden engine of growth" for Canada. He emphasizes that with proper support, these one-person businesses can scale into small or medium-sized enterprises. - The rise in self-employment is attributed to several factors, including population growth, a decrease in available jobs after the post-pandemic hiring boom, and return-to-office mandates that may have prompted some to work for themselves. - Women are a growing demographic in the self-employment sector, making up 37% of self-employed Canadians. - New technologies, particularly accessible AI tools, are seen as a key enabler for solo operators to increase productivity, streamline their operations, and more quickly reach the point of hiring their first employee.