Analysis in Brief
Analysis on Federal Business Innovation and Growth Support to Canadian Exporters, 2021

Acknowledgments

The author would like to thank Francis Demers for all of his guidance and support in planning and producing this analysis. The author would like to thank Alessandro Alasia for all of his comments and feedback, and the members of the Trade by Exporter Characteristics – Goods unit in the International Accounts and Trade Division for their invaluable review of this analysis. The author would also like to thank Syeda Batool and Sarah Feng from the Data Science, Research and Development Unit at the Treasury Board of Canada Secretariat for their collaboration and feedback throughout the study.

Abstract

This analysis examines Canadian goods exporters that were funded by the federal government through business innovation and growth support (BIGS) programs. More specifically, the following analysis covers Canadian exporters at the enterprise level and examines exporters that were engaged in international merchandise trade only. In 2021, 12.2% of all Canadian exporting enterprises received BIGS, and the total value of exports from these beneficiaries was $363.2 billion (63.2% of total exports from Canada). Canadian exporters that were funded through BIGS programs received $274,000 of support, on average. In comparison, BIGS beneficiaries that did not export goods received $105,000 of support, on average.

Highlights

BIGS beneficiary exporters were more likely to have 20 to 99 employees, be established for over 20 years and be operating in the manufacturing industry. The majority of BIGS beneficiaries exported from Ontario and Quebec, and the top countries of destination were the United States, China, the United Kingdom, Australia and Germany.

• Compared with all Canadian exporters, BIGS exporters experienced larger fluctuations in the total value of exports.
• The total value of exports from the manufacturing industry increased by 10.9% from 2020 to 2021.
• Manitoba experienced the largest percentage increase from 2020 to 2021 in the number of BIGS beneficiary exporters (+15.4%) and the total value of exports (+89.1%).
• The United States was an export destination for 87.3% of BIGS beneficiary exporters and accounted for 68.9% of the total value of exports from BIGS beneficiaries.
• Compared with BIGS non-exporters, BIGS exporters were 3.1 times more likely to be high-growth enterprises.

Introduction

The Business Innovation and Growth Support (BIGS)^Note  statistical program collects and produces information on financial and service-based support provided to businesses by the Government of Canada. The support is provided to businesses through programs that promote activities such as funding, consulting services to enterprises, industry-facing research and development (R&D), support provided directly or in partnership, and support for technology development. In 2021, the BIGS database covered support provided to ultimate recipients by 134 federal programs from 17 government departments.

Another important aspect of the economy that is supported by the growth and innovation-related programs included in the BIGS database is exports. Because of the focus on growth, many BIGS programs provide support relating to this aspect. This analysis provides insights on businesses supported by BIGS programs that are exporters compared with BIGS beneficiaries that do not export. This analysis uses the Business Linkable File Environment^Note Note  to link BIGS data to Statistics Canada’s Business Register, the Trade by Exporter Characteristics – Goods (TEC-Goods) program and various other sources. By linking BIGS data to TEC-Goods microdata, an indicator was created to identify businesses that export goods. The statistical unit of measurement in this analysis is the enterprise. Therefore, for the purpose of this analysis, the term “business” is used interchangeably with the term “enterprise.” The economic and social characteristics of these businesses are explored, and the results of this analysis can help to inform policy and programs targeting Canadian exporters by showing their current profiles, industry composition and predominant export markets.

The role of business innovation and growth support programs in supporting Canadian exporters

The number of Canadian goods exporters reached a high of 47,701 enterprises in 2021, with 12.2% of these Canadian exporters having received BIGS (5,830 exporting enterprises). The year 2021 had the highest level of exporters recorded since 2007, up 9.3% from 43,630 exporters in 2020 (12.8% received BIGS), after a decline of 4.3% from 45,533 exporters in 2019 (13.3% received BIGS) because of the economic impact of the COVID-19 pandemic during 2020.^Note 

The total value of goods exported from Canada in 2021 was $575.2 billion, with 63.2% of these exports coming from BIGS beneficiaries ($363.2 billion). Chart 1 below shows that exports generally increased year over year, with the exception of 2020, when exports decreased because of the effects of the pandemic, and exports from BIGS beneficiaries seemed to experience slightly greater growth and declines. For Canadian exporters, the total value of exports increased by 8.1% in 2018 (6.3% for BIGS exporters), rose by 2.0% in 2019 (6.1% for BIGS exporters), decreased by 11.5% in 2020 (16.9% for BIGS exporters) and was up by 21.9% in 2021 (24.9% for BIGS exporters).^Note 

Data table for Chart 1

Data table for chart 1 Table summary
This table displays the results of Data table for chart 1 BIGS exporters and Canadian exporters, calculated using percent units of measure (appearing as column headers).

	BIGS exporters	Canadian exporters
	percent
Notes: BIGS refers to business innovation and growth support. Sources: Statistics Canada, Table 12-10-0091-01, Trade by Exporter Characteristics – Goods, Business Innovation and Growth Support database, and Business Linkable File Environment.
2018	6.3	8.1
2019	6.1	2.0
2020	-16.9	-11.5
2021	24.9	21.9

There were 33,446 BIGS beneficiaries in 2021, and 17.4% of all beneficiaries were exporters. On average, these exporters received $274,000 of support from BIGS programs. In comparison, BIGS non-exporters received $105,000 of support, on average. The number of BIGS beneficiaries that export and the amount of support received by BIGS exporters have remained relatively consistent since 2017, as shown in Table 1. However, the number of BIGS beneficiaries that do not export increased substantially from 16,470 beneficiaries in 2017 to 27,620 beneficiaries in 2021, and the total value of support provided to these non-exporters rose from $0.9 billion in 2017 to $2.9 billion in 2021. The big jump is largely attributable to the increase of 39.9% in beneficiaries and 78.8% in support from 2019 to 2020 because of the pandemic, when there was an increase in programs and support provided for small and medium-sized enterprises (SMEs).

Table 2 below lists the top BIGS program streams that supported Canadian exporters in 2021. The program stream that provided the highest value of support to exporters was the Strategic Innovation Fund program, funded by Innovation, Science and Economic Development Canada. In 2021, a high proportion of Strategic Innovation Fund beneficiaries were exporters (60%), with $386.8 million of support provided to these exporters. Meanwhile, the program stream with the highest value of exports from beneficiaries was the Collaborative Research and Development Grants^Note  program, funded by the Natural Sciences and Engineering Research Council of Canada. The total value of exports from beneficiaries of this program was $165.9 billion.

Business innovation and growth support beneficiary exporter profiles

Chart 2 shows that nearly 40% of businesses receiving BIGS had 20 to 99 employees. However, compared with BIGS beneficiary non-exporters, beneficiary exporters were 5.3 times more likely to be large businesses, with at least 500 employees. This is because the distribution of beneficiary exporters was skewed to the right, with 10.8% of them being large enterprises. Meanwhile, 2.0% of beneficiary non-exporters were large enterprises. On average, large BIGS beneficiary exporters received 3.5 times more support ($1,179,000 per enterprise) than their non-exporter counterparts ($339,000 per enterprise). Conversely, the distribution of beneficiary non-exporters was skewed to the left, with the vast majority being small businesses. In 2021, 75.9% of beneficiary non-exporters had 0 to 19 employees, compared with 32.5% of beneficiary exporters.

As mentioned previously, the number of businesses that export greatly increased from 2020 to 2021. For all Canadian exporters over this period, the “year-over-year rise in the number of SME exporters (+9.5%), higher than that of large exporters (+4.5%), was primarily responsible for [the] upswing in the number of exporters.”^Note  By contrast, the increase in large BIGS beneficiary exporters (+12.3%) was higher than the rise in beneficiary exporters that are SMEs (+3.2%) over this period.

Data table for Chart 2

Data table for chart 2 Table summary
This table displays the results of Data table for chart 2 Non-exporters and Exporters, calculated using percent units of measure (appearing as column headers).

	Exporters	Non-exporters
	percent
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
0 to 4 employees	7.2	38.0
5 to 19 employees	25.3	37.9
20 to 99 employees	38.7	17.7
100 to 499 employees	18.1	4.4
500 or more employees	10.8	2.0

Chart 3 shows that the share of BIGS beneficiaries that export increases as the age class of businesses increases. An extensive literature attests to this trend, as researchers say that a firm is more likely to export if it has a lot of resources, and, “since organisations generally acquire resources over time, it implies that, as firms grow older, they will acquire more resources and as such, be better prepared to become engaged in international business operations” (Williams, D. A., 2011).^Note  About 10% of BIGS recipients that were 5 years old or younger were exporters. This share increases steadily with the age of the business to reach 50% of BIGS recipients that have been in operation for over 20 years. On average, supported exporters that have been operating for 5 years or less received $194,000 per enterprise, and supported exporters that have been operating for over 20 years received $338,000 per enterprise.

Data table for Chart 3

Data table for chart 3 Table summary
This table displays the results of Data table for chart 3 Non-exporters and Exporters, calculated using percent units of measure (appearing as column headers).

	Exporters	Non-exporters
	percent
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
5 years or younger	10.5	39.8
6 to 10 years	14.4	18.5
11 to 20 years	24.2	18.5
21 years or older	50.8	23.2

In terms of the ownership demographics of BIGS beneficiary exporters, the owners of these businesses were predominantly men (85.3% of supported exporters), older than 50 years (68.4% of supported exporters) and born in Canada (76.8% of supported exporters). Chart 4 shows the distribution of beneficiary exporters by ownership demographic. Among the supported businesses owned by women, younger entrepreneurs and immigrants, the proportion that export is an even smaller minority. Specifically, beneficiary exporters made up 12.2% of all women-owned beneficiary businesses, 5.5% of all beneficiary businesses owned by people aged 30 or younger and 16.7% of all immigrant-owned beneficiary businesses. Meanwhile, approximately 25.7% of beneficiary non-exporters were owned by women, 8.6% were owned by someone aged 30 or younger and 27.8% were owned by immigrants or non-permanent residents.

Data table for Chart 4

Data table for chart 4 Table summary
This table displays the results of Data table for chart 4 , calculated using (appearing as column headers).

	Percent
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
4.1 Distribution by sex
Male	85.3
Female	14.7
4.2 Distribution by age
30 years or younger	2.1
31 to 50 years	29.5
51 years or older	68.4
4.3 Distribution by immigration status
Canadian-born	76.8
Immigrant or non-permanent resident	23.2

An industry look at business innovation and growth support beneficiary exporters

By sector,^Note  Canadian exporters receiving BIGS were more likely to be operating in the goods-producing sector^Note , as shown in Chart 5. The goods-producing sector accounted for 57.6% of all beneficiary exporters and 70.8% of the total value of all exports from beneficiaries, yet received 35.2% of the support given to exporters. By contrast, beneficiary non-exporters had a larger presence in the services-producing sector. This sector accounted for 77.5% of supported non-exporters and 82.7% of the total value of support received by beneficiary non-exporters. On average, supported exporters received $167,000 per enterprise in the goods-producing sector ($80,952 per enterprise for non-exporters) and $418,000 per enterprise in the services-producing sector ($112,000 per enterprise for non-exporters).

Data table for Chart 5

Data table for chart 5 Table summary
This table displays the results of . The information is grouped by (appearing as row headers), Services-producing sector and Goods-producing sector, calculated using percent units of measure (appearing as column headers).

	Goods-producing sector	Services-producing sector
	percent
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
5.1 Exporters
Number of beneficiaries	57.6	42.4
Value of support	35.2	64.8
5.2 Non-exporters
Number of beneficiaries	22.5	77.5
Value of support	17.3	82.7

In the goods-producing sector, the industry that had the highest proportion of BIGS beneficiary exporters and the highest total value of exports was manufacturing (51.1% and 53.7%, respectively). As well, the manufacturing industry received 31.8% of the total value of support for exporters. Over time, the total value of exports from the manufacturing industry has fluctuated. Exports from the manufacturing industry decreased by 2.1% in 2018, rose by 4.9% in 2019, declined by 13.9% in 2020 and increased by 10.9% in 2021. In the services-producing sector, the industry that had the highest proportion of beneficiary exporters was wholesale trade (14.8%), and the industry that had the highest total value of exports was management of companies and enterprises (17.5%). The services-producing industry that received the most support for exporters was educational services (25.6%). From 2020 to 2021, the total value of exports grew by 205.1% in the educational services industry, 26.9% in the management of companies and enterprises industry, and 15.7% in the wholesale trade industry.

Data table for Chart 6

Data table for chart 6 Table summary
This table displays the results of Data table for chart 6 Exports and Beneficiary exporters, calculated using percent units of measure (appearing as column headers).

	Beneficiary exporters	Exports
	percent
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
Agriculture, forestry, fishing and hunting	2.9	1.0
Mining, quarrying, and oil and gas extraction	1.6	15.2
Utilities	0.3	0.9
Construction	1.7	0.1
Manufacturing	51.1	53.7
Wholesale trade	14.8	7.9
Retail trade	3.0	0.2
Transporation and warehousing	1.8	1.0
Information and cultural industries	2.1	0.0
Finance and insurance	0.5	1.6
Professional, scientific and technical services	12.7	0.7
Management of companies and enterprises	2.2	17.5
Other service industries	5.3	0.3

Another positive effect of BIGS is helping to reinforce and accelerate Canada’s future trade competitiveness by providing support to exporters in both emerging areas and prominent sectors. One prominent sector in Canada is the agri-food sector,^Note  which includes industries such as primary agriculture, aquaculture, and food and beverage processing. The agri-food sector accounted for 10.3% of all BIGS beneficiary exporters, produced 9.9% of the total value of exports from beneficiaries and received 3.9% of the support given to exporters. One emerging area in Canada is clean technology activities,^Note  which include industries that focus on processes, products or services that reduce negative environmental impacts through renewable energy use, energy efficiency, sustainable use of resources and environmental protection activities. Clean technology activities accounted for 5.4% of all beneficiary exporters, produced 7.2% of the total value of exports from beneficiaries and received 5.1% of the support given to exporters.

A geographic look at business innovation and growth support beneficiary exporters

More than half of BIGS beneficiary exporters in 2021 were in Ontario and Quebec^Note , as shown in Chart 7 (32.4% and 29.2%, respectively), and support was provided mostly to exporters in those provinces as well (34.5% and 28.2%, respectively). However, while the highest total value of exports came from Ontario (33.5%), Chart 7 shows that the second-highest total value of exports came from Alberta (22.9%).

Data table for Chart 7

Data table for chart 7 Table summary
This table displays the results of Data table for chart 7 , calculated using (appearing as column headers).

	Percent
Notes: BIGS refers to business innovation and growth support. For this analysis, British Columbia and the territories (Yukon, Northwest Territories, Nunavut) have been grouped together, and the Atlantic provinces (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick) have been grouped together. Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
7.1 BIGS exporters
Quebec	29.2
Ontario	32.4
Manitoba	3.1
Saskatchewan	2.4
Alberta	9.3
British Columbia and territories	14.1
British Columbia and territories	14.1
British Columbia and territories	14.1
British Columbia and territories	14.1
Atlantic provinces	9.5
Atlantic provinces	9.5
Atlantic provinces	9.5
Atlantic provinces	9.5
7.2 BIGS exports
Quebec	18.6
Ontario	33.5
Manitoba	6.8
Saskatchewan	3.7
Alberta	22.9
British Columbia and territories	9.5
British Columbia and territories	9.5
British Columbia and territories	9.5
British Columbia and territories	9.5
Atlantic provinces	5.1
Atlantic provinces	5.1
Atlantic provinces	5.1
Atlantic provinces	5.1

Although the number of exporting establishments rose in all Canadian provinces and territories for all Canadian exporters in 2021,^Note  a year-over-year increase in BIGS beneficiary exporters occurred only in Manitoba (+15.4%), Quebec (+14.5%) and the Atlantic provinces (+4.3%). Along with Manitoba’s highest exporter growth, the province’s total value of exports rose by 89.1%. This growth was largely driven by an increase in exports from the manufacturing industry; the value of exports from this industry rose by approximately $7.9 billion. While the number of beneficiary exporters in British Columbia and the territories remained the same from 2020 to 2021 (824 enterprises), the total value of exports from those enterprises grew by 48.3%. Similarly, the total value of exports from Alberta and Saskatchewan grew by 47.2% and 13.4%, respectively, despite the number of BIGS beneficiary exporters declining slightly by 3.0% for Alberta and 4.9% for Saskatchewan. These trends were driven by a $29.3 billion increase in the value of exports from the mining, quarrying, and oil and gas extraction industry in Alberta and a $793.1 million gain in the value of exports from the wholesale trade industry in Saskatchewan. (See Appendix Table A.1 for the number of beneficiary exporters and total value of exports by province or territory from 2017 to 2021.)

In terms of the rest of the world, the United States was an export destination for 87.3% of BIGS beneficiary exporters and accounted for 68.9% of the total value of exports from beneficiaries. Table 3 shows that the other main countries of destination for beneficiary exporters were China, the United Kingdom, Australia and Germany. The countries of destination that received the highest total value of exports from beneficiaries were the United States, China, the United Kingdom, Japan and Mexico. China and the United Kingdom were each an export destination for 20.1% of beneficiary exporters, and they received 5.9% and 4.0%, respectively, of the total value of exports from beneficiaries. China was an export destination for 7.9% of all Canadian exporting enterprises, and the United Kingdom was an export destination for 7.6%.^Note  This may suggest that BIGS programs could be beneficial in helping to diversify export markets for Canada overall. Nearly half of beneficiary exporters (45.7%) were exporting to only one partner country, while 12.7% were exporting to two partner countries and 41.6% were exporting to more than two.

From 2018 to 2020, the three countries with the highest number of BIGS beneficiaries exporting to them were consistently the United States, China and the United Kingdom. However, the three countries receiving the highest total value of exports from beneficiaries over the same period were the United States, China and Japan. Chart 8 below displays the change in the total value of exports over time for these four countries.

Data table for Chart 8

Data table for chart 8 Table summary
This table displays the results of Data table for chart 8 2021, 2019, 2018 and 2020, calculated using billions of dollars units of measure (appearing as column headers).

	2018	2019	2020	2021
	billions of dollars
Sources: Statistics Canada, Business Innovation and Growth Support database, and Business Linkable File Environment.
8.1 United States	241.6	256.5	205.8	250.1
8.2 Other countries
China	17.3	15.3	17.9	21.3
United Kingdom	5.0	6.3	6.1	14.4
Japan	9.5	9.5	8.8	11.0

Performance of business innovation and growth support beneficiary exporters

In terms of the business performance of BIGS beneficiary exporters, supported exporters were 3.1 times more likely to be high-growth^Note  enterprises compared with beneficiary non-exporters, with 12.0% of beneficiary exporters and 3.8% of beneficiary non-exporters being high-growth enterprises. Supported exporters generated $71.1 million in business profit, on average, while supported non-exporters generated $3.3 million, on average.

While there “appears to be [a] lack of agreement on how to conceptualize and operationalize export performance,” this performance has frequently been described through objective measures such as sales, profits or market share, and subjective measures such as perceived success, fulfilment of expectations or customer satisfaction.^Note  This analysis will look at export performance using the export-to-revenue ratio (calculated as the share of total revenue from export sales). Year over year, from 2017 to 2021, around two-thirds of BIGS beneficiary exporters consistently had a higher export-to-revenue ratio than the previous year. In 2018, 67.2% of beneficiary exporters had a higher percentage of total revenue generated from exports compared with 2017; in 2019, 67.8% had a higher export-to-revenue ratio compared with 2018; in 2020, 64.1% had a higher ratio compared with 2019; and in 2021, 67.3% had a higher percentage of total revenue generated from exports compared with 2020. This indicates an upwards trend for beneficiary exporters that have been expanding their international business development efforts. In 2021, the median export-to-revenue ratio for beneficiary exporters was 0.15, and 22.5% of beneficiary exporters had exports make up more than half of their revenue.

Conclusion

Overall, BIGS programs play a notable role in providing support to Canadian exporters, with 1/10 of Canadian exporters receiving BIGS and more than half of the total value of Canadian exports coming from BIGS beneficiaries. The support provided to exporters through these programs has been consistent over the years, with a little over $1 billion of support going every year to beneficiaries that export. Since the literature has indicated that a lack of resources is one of the main barriers to exporting, acquiring support through BIGS programs could be a way to overcome this challenge.

Appendix

Methodology

From October 3, 2022, to August 16, 2023, federal departments and agencies provided administrative data on program stream information for the 2021/2022 fiscal year, with the reference period of April 1, 2021, to March 31, 2022. Similar collection and reference dates were used for previous years. The data were acquired using a template filled in by the agencies and departments, with records of transactions for all innovation and growth support program streams. The data received by Statistics Canada were then treated. The transactions were edited in collaboration with the administrators of the program streams and Treasury Board Secretariat subject-matter specialists, and then they were linked to the Business Linkable File Environment at the enterprise level. Data of interest from the Business Linkable File Environment were extracted for each matched enterprise to create a linked microdata set that was used to produce tabular estimates for this analysis.