New study finds immigrant-owned businesses created ‘disproportionate’ number of jobs in Canada

CIC News
Published: April 29, 2019

Immigrant-owned businesses were responsible for what a new Statistics Canada study says was a "disproportionate share of net job creation" between 2003 and 2013 compared to businesses with Canadian-born owners. 

The study distinguished private incorporated businesses owned by immigrants who entered Canada since 1980 from firms with Canadian-born owners. 

Businesses owned by immigrants accounted for 25 per cent of net jobs created by private incorporated firms during the 11-year period, an outsized contribution considering they accounted for only 17 per cent of the firms studied.

This amounted to roughly 400,000 net new jobs created between 2003 and 2013 and translated to a higher per-firm net job creation average than Canadian-owned businesses.

"Immigrant-owned firms were more likely to than firms with Canadian-born owners to be job creators than job destroyers," the study reads.

Immigrant-owned private incorporated companies were also 1.3 times as likely to be high-growth firms with annual employment growth exceeding 20 per cent than were those owned by the Canadian-born, the study found.

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Statistics Canada said the fact a majority of the immigrant-owned firms were less than four-years-old was an important factor.

"In any given year, young firms ... were much more likely to increase employment than to shed employment," the study observed. "Young firms accounted for 40.5 per cent of gross job creation, but only 17 per cent of gross job losses."

Young firms, Statistics Canada said, "are more dynamic" in terms of job creation, which is due in large part to their higher rates of growth than older, more established firms.

The job-creation advantage tended to diminish as immigrant-owned companies aged, but the study said "that's not the end of the story."

“Immigration increased the job creation dynamism of the private incorporated company sector by generating a large number of entering and young companies, which led to immigrant-owned firms’ disproportionate contribution to job creation in the private incorporated company sector,” the study reads.

Canada is set to welcome a growing number of immigrants over the next three years, from 330,800 this year to 350,000 in 2021.

Although the data file used currently ends in 2013, the study said the information “provides a useful first step in understanding the role of immigrant entrepreneurs in the Canadian economy.”

Statistics Canada concluded that the trends observed "change slowly over time and are likely applicable to more recent years."

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