Self-Employment Rebound May Boost GDP
A rebound in self-employment could boost GDP by $24 billion, according to a new study from BDC. The research highlights the potential economic impact of an increasing number of solo operators and small businesses. The study also examines the factors driving the trend and what policies could support further growth.
- After a decline during the pandemic, self-employment in Canada rebounded in 2024 with approximately 70,000 people joining the ranks. - There are currently two million self-employed Canadians, and nearly 40% intend to either hire or invest in their business within the next year. - A key challenge for the self-employed is access to financing, with 73% relying on personal funds compared to 55% of micro-businesses. - The transition from a solo operation to a business with one employee is a critical turning point; nearly half of all new micro-businesses are started by self-employed individuals making their first hire. - BDC's chief economist, Pierre Cléroux, has referred to Canada's self-employed population as a "hidden engine of growth." - Historically, the proportion of self-employed workers in Canada grew from 12% of total employment in 1976 to 15% in 2018. - The desire for more flexibility and autonomy is a significant driver of self-employment, moving professionals away from traditional work models. - Targeted support for self-employed individuals at the stage of hiring their first employee can increase a new business's survival rate by as much as 20 percentage points in the first three to five years.
