Business ownership is central to the Canadian economy
Over the past decade, the way people work in Canada has been changing. Much of the public conversation focuses on wages, inflation, and job security. Less attention is given to how people build long-term economic stability. Increasingly, that stability comes not only from employment, but from business ownership.
Business ownership is not a niche activity. It is a central part of the Canadian economy. About 97.8 percent of employer businesses in Canada are considered small businesses. These include construction firms, professional services, retail shops, logistics companies, and manufacturers. Together, they form the backbone of local economies across the country.
In 2023, small businesses employed about 5.8 million people, representing roughly 46.5 percent of private sector employment. Nearly half of private sector jobs depend on businesses that are typically owned and operated by individuals or small groups. In practical terms, business ownership plays a major role in how Canadians earn income and support their communities.
At the same time, the age profile of business owners is shifting. Many small and medium-sized business owners are nearing retirement. Research shows that close to 60 percent of owners are aged 50 or older, and many expect to leave their businesses within the next several years. This has created a growing gap between businesses that need new owners and people prepared to take them over.
When ownership transitions are not planned, businesses often struggle. Some are sold quickly at a discount. Others shrink or shut down entirely. Jobs are lost, services disappear, and communities feel the impact. Analysts have warned that Canada is approaching a large wave of business exits that could reshape the small business landscape if succession is not addressed.
Why business ownership matters more now
One reason business ownership continues to attract interest is how it is treated within the tax system. Employees are taxed on their income before they receive it. Payroll taxes are withheld automatically, and most work-related expenses are paid using after-tax dollars. Business owners, by contrast, are taxed after legitimate business expenses are deducted. This reduces taxable income and allows owners to reinvest more of what the business earns.
This difference is not accidental. Tax systems are designed to support economic activity. Businesses take on risk, create jobs, and invest in assets. As a result, policies often favour business activity through expense deductions, capital cost allowances, and lower effective tax rates on retained earnings. Over time, this creates a structural advantage for those who operate through businesses rather than relying solely on employment income.
Immigration also plays an important role in this ownership dynamic. Immigrants make up about 32 percent of business owners with paid employees in Canada. Many operate in sectors where owning a business provides opportunities that are harder to access through traditional employment, especially when credentials or experience are not fully recognized. For these individuals, business ownership can offer both economic participation and long-term stability.
Self-employment remains a significant part of the labour market as well. In 2023, about 2.65 million Canadians were self-employed, representing roughly 13.2 percent of total employment. Over time, more self-employed individuals have chosen to incorporate their businesses. This shift often reflects a desire for better tax planning, clearer separation between personal and business finances, and more durable ownership structures.
Taken together, these factors point to a simple reality. Business ownership is not better than employment, and it is not suitable for everyone. It involves responsibility, financial risk, and long-term commitment. What makes ownership different is not freedom, but structure. Owners interact with taxes, capital, and risk differently than employees do.
The growing relevance of business ownership today is not driven by trends or entrepreneurial hype. It is driven by policy design, demographic change, and the scale of small businesses in the economy. As traditional career paths become less predictable, ownership remains one way people seek stability and control, even though it comes with its own trade-offs.
Understanding why business ownership matters, and why it matters now, helps put many personal and economic decisions into context. Whether someone is thinking about starting a business, buying an existing one, or planning for succession, clarity about how ownership is treated within the broader system is essential. Interest may spark action, but structure determines outcomes.
