Small and medium-sized businesses in rural and small town Canada, 2022
Released: 2024-12-09
In 2022, more than 320,000 small businesses operated in rural and small town (RST) areas, representing 14.6% of all small businesses in Canada. In contrast, nearly 1.9 million (85.4%) small businesses were active in functional urban areas. Additionally, over 9,500 (13.2%) medium-sized businesses operated in RST areas in 2022, while 63,215 (86.8%) were based in functional urban areas.
Rising numbers of small and medium-sized businesses in rural and small town Canada
The number of small RST businesses grew by 1.7%, from 315,221 in 2021 to 320,585 in 2022. Of these businesses, 37.7% were unincorporated and 62.3% were incorporated. This growth was slower than the 5.2% increase observed from 2020 to 2021, which reflects businesses' expectations of challenges in 2022, including supply chain issues, inflation, rising costs and labour shortages. From 2021 to 2022, the arts, entertainment and recreation (+10.6%), real estate and rental and leasing (+6.6%) and educational services (+6.1%) industries saw the largest growth in small RST businesses.
The number of small urban businesses rose by 7.2% from 2021 to 2022. Growth was observed in industries such as arts, entertainment and recreation (+15.3%) and real estate and rental and leasing (+13.5%).
Chart 1
Counts of small businesses in Canada, all industries, by incorporation status and rural and small town area and functional urban area, 2019 to 2022
The number of medium-sized RST businesses was up by 9.9%, from 8,711 in 2021 to 9,572 in 2022. The greatest increase was observed in the utilities industry and the arts, entertainment and recreation industry, each of which rose 42.4%. Meanwhile, the largest decrease was observed in information and cultural industries, declining 17.1%.
Small businesses in rural and small town Canada surpass their urban counterparts in average annual revenue
Collectively, revenue earned by small businesses across Canada grew by 6.7%, rising from $866 billion in 2021 to $924 billion in 2022, with small RST businesses contributing 17.1% ($158.3 billion) to the total. Over half (53.1%) of the total small RST business revenue was earned by businesses in agriculture, forestry, fishing and hunting (25.6%), construction (16.4%), other services (except public administration) (5.6%) and accommodation and food services (5.5%).
Small urban businesses earned $765.8 billion in total revenue in 2022, of which 14.9% was earned by businesses in construction, 11.8% by those in professional, scientific and technical services and 10.8% by those in health care and social assistance.
In 2022, the average annual revenue of small RST businesses ($493,700) outperformed that of urban businesses ($409,400). From 2021 to 2022, the average annual revenue of small RST businesses grew by 1.9%, a slower pace compared with that observed from 2020 to 2021 (+4.8%). Small urban businesses saw stable revenues from 2021 to 2022 (+0.1%), whereas they increased by 2.3% from 2020 to 2021.
Unincorporated small RST businesses saw their average annual revenue decline 1.6% from 2021 to 2022. By comparison, a steeper decline of 4.6% was observed in that of functional urban areas. Incorporated small RST businesses recorded a 3.5% increase in average annual revenue over the same period, a rate exceeding that of incorporated small urban businesses (+2.5%).
Chart 2
Average annual revenues of small businesses in Canada, all industries, by incorporation status and rural and small town area and functional urban area, 2019 to 2022
In 2022, medium-sized RST businesses accounted for 12.7% ($88.8 billion) of the total medium-sized business revenue ($698.1 billion). On average, medium-sized businesses in RST areas earned $9.3 million in annual revenue, while those in functional urban areas earned $9.6 million.
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Note to readers
The Rural Canada Business Profiles (RCBP) database is based on business tax returns filed with the Canada Revenue Agency. It is updated annually, since its first release on March 11, 2022. The current version includes data from the 2017 to 2022 reference years. A reference year for the RCBP database runs from January 1 to December 31.
The 2022 RCBP database defines rural and small town (RST) areas as communities outside census metropolitan areas (CMAs) and census agglomerations (CAs) according to Statistics Canada's 2021 Standard Geographical Classification. Communities inside CMAs and CAs are classified as functional urban areas.
Small businesses are defined as those that have annual revenues of $30,000 to $5,000,000; this group includes incorporated and unincorporated businesses. Medium-sized businesses are defined as those with annual revenues of $5,000,001 to $20,000,000. All medium-sized businesses are incorporated. Businesses with higher annual revenues are not included in the RCBP database.
The main variables in the RCBP database are business counts, revenues and expenses, balance sheet items, and financial ratios. Data are organized by geography (Canada, regions, and provinces or territories), RST and functional urban areas, industry, incorporation status, and profitable and non-profitable business. All regions of Canada and all industries are included, except for finance and insurance and public administration (based on the North American Industry Classification System). For small businesses, data are provided at the Canada, regional, and provincial or territorial levels, as well as by RST and functional urban areas. For medium-sized businesses, data are available only at the Canada level and by RST and functional urban areas.
Products
The Rural Canada Business Profiles, 2022, database is now available.
The Rural Canada Business Profiles: Interactive Dashboard, which is part of Statistics Canada – Data Visualization Products (71-607-X), is now available on the Rural Canada Statistics portal.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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