Reports on Special Business Projects
A Profile of Businesses in Indigenous Communities in Canada

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by Haaris Jafri and Alessandro Alasia
Centre for Special Business Projects

Acknowledgments

The authors of this report would like to acknowledge the following at Statistics Canada for their support and inputs: Christian Wolfe, Alex Cote, Scott Bacon, Adam Gadawski, James Splinter, Julia Conzon (now with Employment and Social Development Canada), Samuel Howorth, Julio Rosa, Alex Davies, Abdul Musa, Mahamat Hamit-Haggar, Annie Turner, Kristina Smith, Kory Goulais, Segun Odunade, Anne Munro, Chris Johnston and Emmanuelle Znaty.

The following colleagues currently or formerly with Indigenous Services Canada or Crown-Indigenous Relations and Northern Affairs Canada (formerly Indigenous and Northern Affairs Canada) are also acknowledged for their valuable feedback: Christopher Penney, Cameron McIntosh (now with Public Safety Canada), Andrea Street, Jennie Thompson and James Falconer.

Summary

This study provides a broad understanding of the business environments in Indigenous communities - First Nations and Inuit - across Canada. These communities are typically located in rural low density or remote areas. The analysis profiles businesses located in Indigenous communities and compares them with businesses located in Non-Indigenous communities with similar population size parameters; hence, this analysis uses a geographic concept (i.e., the type of community) to connect the business dimension with the Indigenous dimension, as opposed to businesses whose ownership identifies as Indigenous. However, businesses are sometimes referred to in this study simply as First Nations, Inuit or Non-Indigenous - it must be borne in mind that these designations are based on business location rather than ownership.

The profile is based on a set of straightforward business indicators, including business counts, entry and exit, age, revenue and profit indicators, which are tabulated by various classes of businesses defined for the study (industry groupings, employment size, revenue size, etc.). Some tables also feature province and territory geography. All business data are from Statistics Canada’s Business Register (BR) January 2017 reference period. The 2011 Census geography is used as the January 2017 BR is based on that classification. The tables are presented by type of community. The results highlight both differences and similarities between the business environments of Indigenous communities and included Non-Indigenous communities.

In 2017, there were nearly 19,000 businesses located in Indigenous communities (approximately 17,000 in First Nations communities and 2,000 in Inuit communities). Combined, these businesses generated just over $10 billion in total revenue and $0.4 billion in profits in the reference year of this study. 

Approximately 80% of the businesses in Indigenous communities do not have employees (Non-Employer businesses), while 20% are Employer businesses that have one or more employees. Nevertheless, most (85%) of the revenues of businesses in Indigenous communities are generated by Employer businesses. The vast majority (over 83%) of Employer businesses in Indigenous communities have fewer than 10 employees.

Businesses were categorized into three major groupings based on industry - Service, Goods (resource) and Goods (non-resource). Between about half and four-fifths of both Employer and Non-employer businesses are in the Service industries in each of First Nations, Inuit and Non-Indigenous comparison communities (census subdivision or CSD) groups. Goods (resource) industries have the second highest relative counts among Non-employers, while Goods (non-resource) have the second highest relative counts among Employers.

Nearly one-half of the businesses in Indigenous communities (about 9,000) are located in British Columbia. This contrasts with the distribution of population across provinces and territories in the 2011 Census of Population, which indicates that approximately one-sixth of the total Indigenous population was located in British Columbia, although nearly two-fifths of Indigenous CSDs are in the province. While this was not further investigated in this study, the high share of Indigenous CSD business counts in British Columbia may be partly explained by the fact that more of the Indigenous population of the province lives in communities classified as Indigenous in this study (about 35%) compared with the national average (30%). Another reason may be that the entrepreneurial environment of Indigenous communities is in some degree conducive to businesses thriving, e.g., proximity to large population centres from which clientele could be drawn, or the many municipal centres in Indigenous CSDs being able to support a greater multiplicity of geographically distributed individual businesses.

Counts of businesses per resident (of the CSDs in which the businesses are located, based on the 2011 Census of Population) are in general several times higher in Non-Indigenous CSDs than in First Nations and Inuit CSDs. This holds true for all the industry groupings. In general, First Nations CSDs have slightly higher per resident counts of Non-employers than Inuit CSDs, while counts of Employers are on the whole similar. 

Revenues earned by businesses per resident are in general from about two times to several times higher in Non-Indigenous CSDs than in First Nations and Inuit CSDs depending on industry class and employer status (Employer or Non-Employer). However, Goods (non-resource) Non-Employers and Service Employers in Inuit CSDs have somewhat higher average revenues per resident than the corresponding businesses in Non-Indigenous CSDs.

In terms of median revenues at the All industries level, Inuit Employer businesses ($920,000) have between about two and three times higher values than Employers in First Nations ($460,000) and Non-Indigenous ($350,000) CSDs. In contrast, Non-Employer businesses in Inuit communities tend to have lower median revenues at the All industries level than Non-Employer businesses do in the two other CSD types. Non-Aboriginal and First Nations CSDs have similar median revenues ($13,500), while Inuit CSDs have a lower level ($9,000).

Across all CSD and industry groups, Non-Employer businesses are concentrated most in the $0 to $30,000 revenue class in terms of total annual business revenues, followed by the $30,000 to $100,000 class. Employer businesses tend to be concentrated in the higher revenue classes, specifically revenues from $250,000 to $1 million and revenues greater than $1 million.

Average profits per resident are in general higher in Non-Indigenous CSDs for both Employers and Non-Employers than in First Nations and Inuit CSDs in the same province/territory. In New Brunswick and British Columbia, however, First Nations CSD profits per resident are higher than Non-Indigenous CSD figures for Non-Employers.

Business entry rates per existing business are more variable across province/territory and industry group combinations in First Nations and Inuit CSDs than Non-Indigenous CSDs and tend to be higher than the corresponding rates for Non-Indigenous CSDs.

Non-Indigenous CSD businesses have slightly higher average age and average age at exit; however, the average age and the average age at exit of businesses tend not to be too different across CSD types at the Canada level, with smaller differences for Employers than Non-Employers.

Among Employers, the highest rates of business counts per resident for all pairs of CSD type and industry group are in the oldest group by business age used in this study (businesses that have been in operation for more than 10 years). Among Non-Employers, the two younger age groups (businesses that have been in operation for less than 5 years or those that have been in operation for between 5 and 10 years) tend to dominate in counts per resident, particularly so in Service industries.

This study examines the suitability of the BR for this type of place-based analysis. The BR was found to be adequate for analysis of many of the variables used in the study. While there are limitations and areas of potential improvements, the BR remains the most comprehensive and granular database for the analysis of business characteristics at the local level. The BR assigns a CSD to a business based on postal code. This does not always match the CSD of the physical location of the business. This study therefore determined and used the CSD based on the geo-coordinates of a business available in the BR.

1 Introduction

Indigenous communities are typically small and are located in rural low density or remote areas. Their geographic location and characteristics have profound influences on the economic development opportunities of the population living in these regions (INAC, 2012). For this reason, there is a need to generate evidence-based understanding of the business environments of these communities (OECD, 2018). This information can help monitor current conditions and prove useful in planning for future initiatives aimed at improving local economic outcomes. 

The purpose of this paper, developed in collaboration with Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC), is to address a gap in Indigenous statistics.  The analysis provides a broad understanding of the business environments in Indigenous communities (First Nations and Inuit) across Canada, by profiling businesses located in these communities and comparing them with businesses located in Non-Indigenous communities of similar population size.^Note 

It needs to be emphasized that classification into Indigenous and Non-Indigenous businesses in the analysis is not referring to businesses owned by Indigenous persons. The operative distinction is based on the location of a business within a municipality (CSDs) that is classified as First Nations or Inuit (together termed Indigenous in this study) or as Non-Indigenous (termed Non-Indigenous in the study); hence, this analysis uses a geographic concept (i.e., the type of municipality or community) to connect the business dimension with the Indigenous dimension, as opposed to using a criteria of ownership of the business.^Note  Thus a business located in an Indigenous CSD is called an Indigenous business (specialized as First Nations or Inuit business) and one located in a Non-Indigenous CSD is called a Non-Indigenous business.

The primary data source used in this analysis is the Business Register (BR), which is the main repository of information on business across Canada.^Note  The version used in this study is the January 2017 reference period (December 2016 reference date). Both employer and non-employer businesses are in scope for the study. Businesses are divided into three major industry classes based on two-digit NAICS (North American Industry Classification System)^Note  groupings (Goods (resource), Goods (non-resource), and Service (including utilities)). Public administration (NAICS code 91) were excluded from the study. In addition to classification by type of CSD and by province/territory, businesses are profiled by industry groupings, as well as by age, employer status (employer or non-employer) and by size (by number of employees and by revenue). Ratios have been used in some tables to present business characteristics per person or per 1,000 persons residing in the three different types of CSDs.^Note 

Business demography statistics can include variables such as counts of active businesses, births, deaths, survival, growth rates, etc. The possibilities of what could be investigated in this report are limited by the structure and contents of the BR and the results presented are qualified by the strengths and limitations of the BR, as discussed in the subsequent sections.  Moreover, this study does not examine business growth dynamics through time.

The report is organized as follows: after this introduction, the next section presents a short overview of the key concepts, and data sources which are used in the analysis. The third section presents the methodology used to compute the business indicators used in the profiling. The fourth section presents the results for business counts, entry and exits, business age, revenue and profit indicators. The conclusions highlight key findings and the potential of BR data for granular analysis of business performance at the local level.

2 Concepts and Data Sources

2.1 Geographic Concepts

The study uses the Census Subdivision (CSD) as the basis for the geographic dimension, based on the 2011 version of Statistics Canada’s Standard Geographic Classification (SGC).^Note  The CSD is an administrative region defined along municipal and reserve boundaries by the province or territory to which each community or reserve belongs. The CSD type (e.g., town, Indian reserve, village, etc.) is also defined by the province or territory. The 2011 SGC divides Canada into 5,253 discrete CSDs.

For the purposes of this analysis, CSDs are grouped into one of three types:  First Nations CSD, Inuit CSD, or Non-Indigenous CSD.^Note   CSDs are identified as First Nations if their type of CSD is one of six CSD types classified as a First Nations type per the SGC.^Note  In addition, the northern village of Sandy Bay in Saskatchewan was treated as a First Nations CSD in this study.  Inuit CSDs are identified in a similar manner for CSDs classified as an Inuit type by the SGC.  

In this study, all businesses located within a CSD are classified according to the type of that CSD. For example, all businesses within a First Nations CSD are classified as a “First Nations business”.  According to the 2011 Census of Population, there were 983 First Nations CSDs and 63 Inuit CSDs, all of which had a population of less than 7,000. However, the average and median populations of all Indigenous CSDs combined were much lower than 7,000. Thus, in order to approximate the average and median populations of Indigenous CSDs, given that Non-Indigenous CSD populations are more uniformly distributed between 0 and 7,000 than the populations of Indigenous CSDs, the Non-Indigenous CSDs included in the comparison group are those with a population below 3,500. There were 3,638 Non-Indigenous CSDs with a population of less than 3,500. These CSDs are used as the comparison group of Non-Indigenous CSDs to First Nations and Inuit CSDs.

Table 1 gives, by type of CSD, the number of CSDs containing an in-scope business.^Note  There were 3,389 CSDs for which there was an in-scope business in the BR. Of these CSDs, 2,914 are coded as Non-Indigenous CSDs, while 427 are coded as First Nations CSDs, and 48 are coded as Inuit CSDs. There were 724 Non-Indigenous (with a population of less than 3,500), 556 First Nations, and 15 Inuit CSDs that had no in-scope businesses.

2.2 Data Sources

The Business Register (or BR)

The analysis is based on the aggregation of business data from Statistics Canada’s Business Register (BR). The primary purpose of the BR is to serve as a frame for Statistics Canada surveys. With certain provisos,^Note  the BR provides a consistent and well-maintained national inventory of businesses. The BR is based primarily on tax data. It also offers key variables that provide information on businesses. Thus, in addition to operational uses as a survey frame (and other uses such as contacting businesses for data collection and monitoring response burden), the BR can also serve analytical purposes. Businesses in the BR are updated on a regular basis and updates are released every month. The version used in this study is the January 2017 reference period (December 2016 reference date). The January 2016 version is also used for detecting business entry and exit.

For the purposes of this project, a business was considered “in-scope” only if the following conditions were met: (1) it had the business status of “Active” or “NewBN” in the year of interest;^Note  and (2) the business had filed an income tax return in the previous five years unless it was born in the previous five years (in the latter case the date of the last income tax return was not used as a filter). In addition, businesses in NAICS 91 Public Administration were excluded, besides those in Non-Indigenous CSDs with a population greater than 3,500 according to the 2011 Census of Population.

The BR meta-information advises that the BR framework, which is designed to provide an up-to-date, cross-sectional frame for surveys, should be used with due care if being employed for longitudinal analysis.  The BR meta-information provides details of any conceptual changes to the BR; this enhances its suitability for use as an analytical tool.

3 Methodology

The variables used in this study were selected to provide a comprehensive picture of the performance and characteristics of businesses in First Nations and Inuit CSDs, and to compare these with Non-Indigenous CSDs of similar population size. Many of the variables used are similar, though not identical, to the ones in Eurostat-OECD Manual on Business Demography Statistics (2007) (Eurostat-OECD, 2007). The exact definitions used in this analysis are presented below.

Ratios have been calculated in several cases to provide additional perspective. These ratios provide figures per person (population), per counts of businesses, or per dollar of business revenue. In each case, the numerator variable is summed over all CSDs of the concerned type (First Nations, Inuit, or Non-Indigenous) in the geography of interest (province/territory or Canada) and is divided by the denominator variable calculated in like manner. The population is based on the 2011 Census of Population and includes persons of all ages.

3.1 Assignment of Businesses to CSDs

The study classifies individual businesses as First Nations, Inuit, or Non-Indigenous according to the class of CSD in which they are located (for further detail on how CSDs were assigned to one of the classes used in this study, please refer to section 2.1). Thus, the assignment of businesses to CSDs should not be seen to have a direct relation to the identity(ies) of the owner(s) as being First Nations, Inuit, or otherwise.

The BR assigns a CSD identifier to each business unit using the postal code of the business’ address. The CSD boundaries used in this project are based on Statistics Canada’s 2011 SGC; the Business Register was updated to the 2011 SGC in 2013. However, for this project, the CSD codes assigned in the BR were not used as the postal code does not always relate to a unique CSD and therefore does not always designate the CSD of the physical location of the business; instead, the geo-coordinates of the business location were used to assign a business to a CSD.

For each business, one of several geocoding methods was used in the BR for assigning geo-coordinates. These methods used sub-CSD geographies developed for the census (block-face, dissemination block, or dissemination area). Using the co-ordinates information and the 2011 cartographic CSD boundary file of Canada, a commercially available GIS system^Note  was used to encode each business location within the boundaries of a CSD.

Simple enterprises, which by definition have only one location, are the vast majority of enterprises. For approximately 3% of enterprises, known as complex enterprises, there is more than one location. The BR variables showing the number of employees, revenues, etc., which are based on administrative data would represent the figure for the entire enterprise. In these cases, using the Profiled Number of Employees and the Profiled Revenue variables of the BR provides data that have been allocated to each location of the larger enterprise. The Profiled Number of Employees and the Profiled Revenue are based on the geographical distribution, sizes and activities of enterprise locations as determined by dedicated subject matter experts at Statistics Canada that keep close contact with complex enterprises in order to track and keep their organizational structure updated in the BR. As the communities in scope for this project are CSDs with a small population size, most of the in-scope enterprises are likely to be simple enterprises.

3.2 Definitions of Key Indicators

Business Entry and Exit

In this study, a business is considered to have made its entry based on its Earliest Signal Date (see next sub-section) on the BR in the one year period between two and three years before the reference date of the BR version used in the study. Since the BR version used has a reference date of January 2017, the Earliest Signal Date range is at some point between January and December 2014. This interval was chosen as some Non-Employer businesses appear on the BR after a delay in relation to their birth (or other earliest signal) date. The terms “birth”, “born” and “new” are also used in this report to refer to a business entry.

A business is considered to have exited or died if it was present on the 2016 BR as an Active business but was not present on the 2017 BR as an Active business. Note that a business can sometimes become reactivated (e.g., within two years per OECD/Eurostat Manual on Business Demography Statistics 2007 (Eurostat-OECD, 2007)), but this possibility is not included in this study. The term “died” and “death” is also used in this report to refer to a business exit.^Note 

Age and Age at Exit of Businesses

Two variables were calculated to express the permanence and longevity of businesses: the average age and the average age at exit (or death).

The average age of businesses is calculated using a variable based on the earliest life signal observed on the BR for a business. The ‘Earliest Signal Date’ is used in this study since the BirthDate variable on the BR may not always be the actual date of birth of a business, and is actually the date the business was added to the BR. If there are indications that the business existed earlier than the BirthDate on the BR, than this would provide a better indication of the actual birth date. The Earliest Signal Date is the earliest of the following BR variables:

• IncorporationDate
• BirthDate
• BusinessStatusChangeDate (to Active status)
• FiscalStartDate
• GSTEarliestFilingPeriodEndDate

Thus, the age calculation presented in this study needs to be used with caution as in some cases it may not reflect the actual age of a business but the best possible age as available from the BR. The age is, in general, significantly more reliable for employer businesses than for non-employer businesses. However, currently and going forward, there are strong indications that an entry on the BR will be much better aligned with an actual entry than has been the case in the past.

The age at exit is calculated in a similar manner. A business is considered to have “exited” sometime in 2016 if it was an Active or NewBN (Business Number) business on the January 2016 reference date BR but was no longer present on the BR as an Active or NewBN business on the 2017 reference date BR. Age at the date of exit is calculated using the Earliest Signal Date as the entry (or birth) date of the business. The date of exit was assumed to be in mid-2016.

Revenues and Expenses

Total revenue in a CSD is calculated as the sum of the revenue of all businesses in the CSD.  Revenues are calculated from the BR using the “ProfiledRevenue” variable. The field is used to register the T1 or T2 revenue of a business in case of simple businesses. However, for complex businesses, the profiled revenue is based on apportioning of the tax revenue to an enterprise’s locations based on information gathered by dedicated portfolio managers at Statistics Canada who maintain close contact with such businesses in order to track their organizational and business structures. For businesses that do not have a ProfiledRevenue available (simple businesses), the IncomeTaxRevenue variable is used. “ProfiledExpense” likewise is used for expenses, while IncomeTaxExpense is used when ProfiledExpense is not available.

Note that an expense value was not available for a significant number of businesses. This situation is more prevalent in Non-employer businesses^Note  . Non-employer businesses with no expenses available on the BR represent businesses with about one-half the revenue for Non-Indigenous CSD businesses (populations below 3,500), one-third for First Nations CSDs, and one-ninth of the business revenue in Inuit CSDs. Employer businesses with no expense figure available on the BR represent 13% of revenue for Non-Indigenous CSDs (population below 3,500), 15% for First Nations, and 20% for Inuit CSDs.

Profits

Profit is calculated from the BR using the difference between the revenue and the expense variables for each business reporting both variables. Total Profit in a CSD is calculated as the difference between the sum of the revenue of all businesses in the CSD and the sum of the expenses of all businesses in the CSD.  For calculating profits, one outlier was removed in Service industries in Ontario employers for Non-Indigenous CSDs. Note that it was not possible to calculate profits for businesses for which an expense figure was not available.

3.3 Industry Groups and Classifications Used

Business units in the BR are coded based on the concept of major business activity in a manner consistent with the approach outlined by the North American Industry Classification System (NAICS).^Note    The NAICS coding was used to assign businesses to one of the industry groups used for this project.

Businesses are divided into three major industry groupings based on two-digit NAICS groupings (NAICS 2012). The industry classes used are: Goods (resource), Goods (non-resource), and Service (including utilities). Public administration NAICS (91) were excluded from the study. Note that some businesses do not have a NAICS code assigned in the BR. These businesses are classified to a group labelled “Unassigned”.

The concordance between NAICS at the two-digit level and the industry groupings used is as follows. Goods (resource) includes: Agriculture, forestry, fishing and hunting (11) and Mining, quarrying, and oil and gas extraction (21). Goods (non-resource) includes: Construction (23) and Manufacturing (31-33). Service includes all other the two-digit level NAICS (Utilities, Wholesale trade, Retail trade, Transportation and warehousing, Information and cultural industries, Finance and insurance, Real estate and rental and leasing, Professional, scientific and technical services, Management of companies and enterprises, Administrative and support, waste management and remediation services, Educational services, Health care and social assistance, Arts, entertainment and recreation, Accommodation and food services, Other services (except public administration)).

Non-employer businesses do not have any reported employees and include self-employed. Employer businesses are those businesses that have at least one employee. Note that T1 businesses with one employee or more would be considered an Employer business for the purposes of this study. Employer businesses are further classified into five size categories: 1 to 4 employees, 5 to 9 employees, 10 to 49 employees, 50 to 99 employees, and 100 or more employees. The data in the BR on the number of employees are obtained from Canada Revenue Agency’s (CRA) payroll deductions program (which covers all employers who make income tax remittances, contribute to social insurance programs (Canada Pension Plan/Québec Pension Plan), and make Employment Insurance contributions for their employees using the PD7 payroll deduction form). The figure for number of employees in the BR is based on the second highest month in the year in terms of number of employees in the CRA payroll deductions data.

This study also classifies businesses by age as calculated using the methodology described above (Section 3.2, sub-section Age and Age at Exit of Businesses). Businesses are grouped according to whether they made their entry within the last five years, in the last five to ten years, or more than 10 years ago. This classification provides additional information on business creation patterns for each CSD type. However, as pointed out above, since the age calculation is subject to inaccuracies, the age classes need to be used with appropriate caution.

In the analysis, seven business revenue classes are used, based on annual income tax revenue. These are: Negative revenue; No revenue; More than $0 and less than $30,000; Between $30,000 and $100,000; Between $100,000 and $250,000; Between $250,000 and $1,000,000, and Over $1,000,000. The revenue cut-offs were chosen to achieve reasonable representation in terms of counts and revenues in the respective categories and thus achieve optimal analytical value. The Negative revenue category has only a handful of businesses and does not materially affect the analysis in this study. Negative business revenues on the BR are likely to be associated with unique and transient circumstances related to the BR update and change processes. Also, there are a few businesses for which the revenue was unavailable; some of these may have been new businesses that had not yet filed an income tax return, though this was not examined in any detail for this study. These categories are retained for the project in order to be able to assess the BR as a tool for business demography statistics.

4 Results

In presenting the results, a greater emphasis is provided on the indicators that are standardized by population counts or are presented as median and average values. Some tables are available in the Appendix for the interested reader. It is important to recall that the results for Non-Indigenous CSDs pertain to communities with a population of less than 3,500; thus, only a sub-set of Non-Indigenous CSDs are included.

It is emphasized again that referring to businesses as First Nations, Inuit and Non-Indigenous businesses in this study relates only to the designation of the CSD in which the businesses are located and not to the identity of the owners.

4.1 Counts of businesses

Counts of Businesses per Resident by Industry

The counts of businesses per 1,000 residents^Note  by industry is presented in Table 2. Non-Indigenous CSDs have the highest counts per resident for both Non-Employers and Employers in every industry grouping. First Nations CSDs have higher per resident counts of Non-Employers than Inuit CSDs for goods industries, while the rates are higher for Inuit CSDs for Service industries. There are also more Employers per resident in the Goods (non-resource) and Service industries in Inuit CSDs than in First Nations CSDs, while Goods (resource) Employers have a higher rate among First Nations CSDs than Inuit CSDs.

The counts per resident for all industries taken together are similar for First Nations and Inuit CSDs. For First Nations CSDs at the All industries level, there are about 40 Non-Employer and ten Employer businesses per 1,000 residents, while for Inuit CSDs, the corresponding figures are about 35 and ten, respectively. At the All industries level, there are about five times more Non-Employers businesses per 1,000 residents in Non-Indigenous CSDs than in First Nations and Inuit CSDs, and between approximately three and four times more for Employer businesses.

In terms of industry groups, the highest per resident counts are for Service industries for both Non-Employers and Employers for all CSD types. Within First Nations and Inuit CSDs, per resident business counts are lowest for Employers in Goods (resource) and Goods (non-resource). However, for Non-Employers, it is Goods (non-resource) businesses that have the lowest per resident counts, across all CSD groups. For both types of Goods industries, per resident counts of Non-Employer businesses are lowest in Inuit CSDs.

For the Goods (non-resource) grouping, there are at least twice as many Non-Employer businesses per 1,000 residents as Employer businesses, except within Inuit CSDs, in which these rates are similar. For Goods (resource), the ratios of counts of Non-Employer to Employer businesses per 1,000 residents are greater: almost seven times for Non-Indigenous CSDs, greater than seven times amongst First Nations, and 35 times within Inuit CSDs. Lastly, for the Service industry, the spread between the count of businesses per 1,000 residents for Non-Employer and Employer type businesses ranged between more than three times as many for Inuit CSDs to over six times as many in Non-Indigenous CSDs (in favour of Non-Employers having higher counts).

Counts of Businesses per Resident by Province/Territory and Industry

For every province/territory-industry grouping combination, Non-Indigenous CSDs have a higher number of businesses per resident than either First Nations CSDs or Inuit CSDs, for both Employer and Non-Employer businesses.^Note  At the All industries level for Employer businesses in First Nations CSDs, the highest numbers of businesses per 1,000 residents are in Yukon (slightly over 20) and British Columbia (over 21). For Employer businesses at the All industries level in Inuit CSDs, the highest rate is in the Northwest Territories (close to 15 per 1,000 residents). For Employer businesses in Non-Indigenous CSDs, Northwest Territories (nearly 20 per 1,000 residents) have the lowest business-to-population ratio, while the highest values are found in Alberta (about 50 per 1,000 residents) and Saskatchewan (nearly 40 per 1,000 residents). 

Among Non-Employers in First Nations CSDs, the highest business counts per 1,000 residents are in British Columbia (close to 100) and Yukon (nearly 80). Nunavut (over 35) has the highest counts per 1,000 resident among Inuit CSDs. The highest business counts per 1,000 residents^Note  at the All industries level for Non-Employers in Non-Indigenous CSDs are found in Saskatchewan (about 320) and Manitoba (nearly 270), while the smallest values are found in Northwest Territories (about 20).

The highest ratios of Employer to Non-Employer businesses tend in general to be in the Goods (resource) industries for all provinces/territories and CSD types, followed by Service industries, while Goods (non-resource) tend to have the lowest values for this ratio.

Counts of Businesses per Community by Industry

Average counts of businesses per CSD by industry are shown in Table 3. At the All industries level, Non-Indigenous CSDs have about six times as many Non-Employer businesses as First Nations and Inuit CSDs. For Employer businesses, Non-Indigenous CSDs have about five times and about three times as many businesses per community as First Nations and Inuit CSDs, respectively.

Counts of Businesses by Industry

In 2017, there are approximately 18,900 in-scope businesses located in First Nations and Inuit communities that are found on the BR.^Note  In each of the CSD groups, the majority (about two-thirds) of businesses are in the Service industries. Goods (resource) industries have the second highest relative counts among Non-Employers in all three CSD types. Goods (non-resource) industries have the second highest counts among Employers in First Nations and Non-Indigenous CSDs, while Goods (resource) industries have the second highest counts among Employers in Inuit CSDs.

Across all CSD groupings, there are more Non-Employer than Employer businesses in all industry groupings, except for Inuit CSDs in the Goods (non-resource) industries where the business counts are almost equal. At the All industries level, there are more than five times, four times, and three times as many Non-Employers as Employers, for Non-Indigenous, First Nations, and Inuit CSDs, respectively. In general, the difference in counts between Employer and Non-Employer businesses was smallest for the Goods (non-resource) industry.

Counts of Businesses by Province/Territory

Among Non-Employers, for First Nations CSDs, British Columbia has by far the highest number of businesses, followed by Saskatchewan and Alberta.^Note  More specifically, British Columbia has about 55% of all Non-Employer First Nations businesses, while Saskatchewan and Alberta each have about 11%, with Ontario having about 8%. Among Non-Indigenous CSDs (of less than 3,500 population), Quebec, with about 35%, has the highest count of Non-Employer businesses, followed by Saskatchewan (20%), British Columbia (10%), and Alberta (10%). The largest number of Inuit Non-Employer businesses is found in Nunavut (about 70%), followed by Quebec (about 23%).

Among Employers, it is also British Columbia that has the highest business counts for First Nations communities – about half of the Canadian total, while Quebec, Ontario, and Alberta each have between about 8% and 11% of the total for the country. Employer businesses in Inuit CSDs are most prevalent in Nunavut (73%), followed by Quebec (18%), then Newfoundland and Labrador, and finally Northwest Territories. As is the case among Non-Employers, Quebec (35%) also has the most Employer businesses for in-scope Non-Indigenous CSDs (i.e., with a population upper limit), followed by Saskatchewan, at about 14%.

Among Indigenous businesses, Northwest Territories Inuit CSDs and New Brunswick First Nations CSDs have the highest ratios of Employer to Non-Employer businesses; the lowest ratios of Employer to Non-Employer businesses are found in First Nations CSDs in Manitoba and Saskatchewan.

Distribution of Business Counts by Province/Territory and Industry

Non-Indigenous CSDs have active Employer and Non-Employer businesses in all industry groups, except that Nunavut Non-Indigenous CSDs do not have Employers in Goods (resource) industries.^Note  First Nations businesses^Note  are also present in nearly all geography, industry group, employer status combinations, with a few exceptions: Nunavut and most combinations in Northwest Territories. Inuit businesses are present only in Newfoundland and Labrador, Quebec, Northwest Territories, and Nunavut; however, within these regions, representation is in all industry group and employer status combinations.

In nearly all provinces and territories, the Service industry, of all industries, has the largest share of business counts among both Non-Employer and Employer businesses for Non-Indigenous, First Nations, and Inuit CSDs.

Goods (resource) businesses are the second most prevalent type of business in nearly all CSD type-industry group-employer status combinations, while Goods (non-resource) are the least commonly found businesses in general, though there are several exceptions.

For First Nations CSDs, Service Non-Employers are most dominant over such businesses in other industries in British Columbia and Ontario, whereas among Employers, Service producers have the biggest lead in Yukon and Nova Scotia.

Among Inuit CSDs, Service Non-Employers and Employers dominate other industries to the greatest extent in Quebec and Nunavut. Goods (resource) businesses prevail the most among Non-Employers in Newfoundland and Labrador, while Service producers lead among Employers in that province for Inuit CSDs.

Among Non-Indigenous CSDs in the comparison group, Non-Employer Service industries are most dominant over other industries in Northwest Territories, Nunavut, New Brunswick and Quebec, while Employer Service-producers are most dominant in every territory and in Ontario and British Columbia.

Distribution of Business Counts by Industry and Revenues Class

Table 4 shows the distribution of business counts by industry and revenue class. Across all CSD types and industries, Non-Employer businesses are most concentrated in the lower revenue classes used in the study, i.e., the greater than $0 and less than $30,000 revenue class, followed by the $30,000 to $100,000 class. Employer businesses tend to be concentrated in the higher revenue classes, specifically revenue between $250,000 and $1,000,000 and revenue greater than $1,000,000. These two categories together make up more than 60% of Employer businesses for every CSD type and industry grouping combination (with the exception of Inuit Goods (resource) firms, for which these two classes together still make up about 40% of the counts). These are followed by the $100,000 to $250,000 revenue class for the highest share of Employer business counts.

Interestingly, when benchmarked to the Non-Indigenous CSDs in the comparison group, First Nations and Inuit CSDs have a relatively higher share of business counts in the highest revenue class for Employer type businesses for Goods (non-resource) and Service industries. This suggests that larger businesses in terms of revenues are likely to be significant players in these local economies.

Counts of Businesses per Resident by Industry and Business Age

Table 5 shows counts of businesses per 1,000 residents by industry and age of business. In general, the counts for Non-Employer businesses in operation for 10 years or more are relatively much smaller in Service industries than in the two goods industries for every CSD type. In Service industries, for all CSD types, the figure for Non-Employer counts per resident is higher in the Born in the last 5 years and Born between 5 and 10 years ago classes than in the Born more than 10 years ago business age class (mostly about two times more but up to five times more for Inuit businesses Born in the last 5 years compared to businesses Born more than 10 years ago).

Among Employers, however, the distribution is shifted to the higher business age groups, with the 10 years and older class of businesses having the most businesses per resident in all industry groups, generally more than the other two age categories combined.

Distribution of Business Counts by Employer/Non-Employer, Business Size and Industry

Table 6 provides the distribution of business counts by industry, employer class and business size as measured by employment count. Among Employers, businesses with 5 or fewer employees are the predominant type in terms of counts in First Nations and Non-Indigenous CSDs at the Canada level for all industry groupings, as well as for Inuit Goods (resource) industries, but businesses with 10 to 49 employees lead other size groups for Inuit Employers in Goods (non-resource) and Service industries.

4.2 Business Entry and Exit

It should be recalled that Entry as well Exit rates tend to vary across years. Thus, the results should not be interpreted as representing a trend.

Business Entry Rate per Existing Business by Province/Territory and Industry

A business is considered to have made an Entry for the purposes of this calculation if its Earliest Signal Date on the BR is in the one year period between two and three years before the January 2017 reference date of the BR, i.e., at some point in 2014 (see Section 3.2). This interval was chosen as Non-Employer businesses appear on the BR after a delay in relation to their birth (or other earliest signal) date.^Note 

Table 7 presents business entry rates per 1,000 existing businesses in provinces/territories by industry grouping.^Note  In general, First Nations and Inuit CSDs have higher entry rates than Non-Indigenous CSDs in the comparison group.

Non-employers have higher rates of Entry per existing business than Employers in most combinations of province/territory, industry group and type of CSD, generally between two and four times higher. The exceptions are in First Nations CSDs: Service industries in Newfoundland and Labrador Employers, Goods (resource) industries in New Brunswick and Yukon, and Goods (non-resource) industries in Saskatchewan.

Entry rates per existing business are comparable between provinces/territories for Non-Indigenous CSDs for all industries for both Non-Employers and Employers, except in Nunavut for Non-Employers and for Employers in Newfoundland and Labrador, where rates are much higher than other regions. However, for First Nations and Inuit CSDs, entry rates per existing business are more variable, and tend to be higher than the corresponding rates for Non-Indigenous CSDs.

Business Entry by Industry

For all CSD groups, by far the highest number of new businesses is in the Service industries for both Employers and Non-Employers.^Note    This is in line with the fact that the highest number of established businesses is also in the Service industries.

Specifically, nearly three, seven and a half, and two times more Service industry Non-Employer businesses were created in First Nations, Inuit, and Non-Indigenous CSDs, respectively, than both the corresponding goods industry groups used in this study taken together. For Employers, these multiples were about three, eight, and one and a half, respectively.

For all CSD groups, while the industry grouping with the second highest number of Employer businesses is Goods (resource), the Goods (non-resource) industry has a higher number of entering Employer businesses.

Goods (resource) industries have the highest ratio of Employer to Non-Employer new businesses for all CSD types, followed by Service producers. This is in line with the ratios for existing businesses. In the Service industry, approximately 5% of new businesses created within Non-Indigenous CSDs are Employer type businesses, while in First Nations and Inuit CSDs, about 9% and 5%, respectively, of new businesses are Employers.

Business Exit Rate per Existing Business by Province/Territory and Industry

A business is considered to have exited if it was present on the 2016 BR as an Active business but was not present on the 2017 BR as a business with an Active status. Business exit rates per 1,000 businesses are presented in Table 8. The exit rate is normalized per 1,000 businesses existing in the previous year. For this reason, the resultant rates should not be interpreted as the actual count of exiting businesses. The conversion into a normalized rate results in comparable figures across CSD types that otherwise vary significantly in size. It also must be remembered that the exit rates calculated in this study for one period should not be taken to represent a trend. 

In most cases, First Nations and Inuit CSDs have a higher exit rate per existing business than Non-Indigenous CSDs. Moreover, in some provinces/territories and industries, the First Nations and Inuit CSD business exit rates are much larger than the corresponding Non-Indigenous CSD rate. For example, the exit rate for Inuit Non-Employer businesses is more than two times the rate for Non-Indigenous Non-Employers in Quebec, and nearly two times the rate for the corresponding business groups in Newfoundland and Labrador.

Exit rates per existing business are also generally much higher for Non-Employer businesses than for Employers across all CSD types and industries: a little less than four times for Non-Indigenous, about three times for First Nations, and above five times for Inuit CSDs at the Canada level for All industries.

Note that in some cases an industry in a province/territory and CSD group combination might have no exiting businesses.

4.3 Age of Businesses

As noted in section 3.2, the Age calculation presented in this study needs to be used with caution as in some cases it may not reflect the actual age of a business but the earliest time of recording on the BR. Nevertheless, this variable provides a basic understanding of one of the key business demography indicators. Two business age-related variables are tabulated, average age and average age at exit for combinations of geography and industry.

Average age

Table 9 shows the average age of businesses. In the case of both Non-employers and Employers, the average age of businesses tends not to be too different between CSD types at the Canada level. For Employer businesses, the average business age is about 16 years for Non-Indigenous CSDs, about 14 years for First Nations CSDs, and about 16 years for Inuit CSDs. For Non-Employer businesses, which tend to have much lower average ages than corresponding Employer businesses, the average business age ranges from nine years for Non-Indigenous CSDs, about eight years for First Nations CSDs, to a low of approximately six years for businesses in Inuit CSDs. In general, the differences noted at the Canada level are also found at the provincial and territorial levels.

In all provinces/territories where Inuit CSDs are present, except for Nunavut, the average age of Employer businesses in an industry class is higher in Inuit CSDs than the corresponding businesses in both Non-Indigenous and First Nations CSDs. However, Non-Employer Inuit CSD businesses tend to be younger than businesses in the same industry class and province/territory in both Non-Indigenous and First Nations CSDs.

Age at Exit

As noted in section 3.2, the Age calculation presented in this study needs to be used with caution as in some cases it may not reflect the actual age of a business but only the best possible age as available from the BR. As the age at exit (or death) depends on the accuracy of the birth date on the BR, it, too, should be used with similar caution.

Average age at exit for businesses by province/territory and industry is shown in Table 10. For All industries at the Canada level, Non-Indigenous CSDs have a somewhat higher age at exit (over seven years for Non-Employers and 11 years for Employers) than First Nations (somewhat less than seven years for Non-Employers and nine years for Employers) and Inuit CSDs (a little over five years for Non-Employers and over nine years for Employers). Thus, businesses in Non-Indigenous CSDs tend to have been alive longer when they cease to operate than businesses in First Nations and Inuit CSDs. However, the differences are not that much greater than what they are for average age.

Employer businesses have a higher average age at exit than Non-Employer businesses at the All industries level for most province/territory-CSD type pairs – generally about one and a half times higher, but much higher in Inuit communities in Newfoundland and Labrador and Quebec. The exceptions are First Nations CSDs in Nova Scotia and Yukon, as well as Non-Indigenous CSDs in Newfoundland and Labrador.

Newfoundland and Labrador’s Service Employer businesses operating in Inuit CSDs have the highest average age at exit of all province/territory and industry combinations; at about 19 years, this figure is more than double the national average for Inuit CSDs for Employer businesses at the All industries level (about 9 years).

4.4 Revenues of Businesses

Business Revenues per Resident by Industry

Business revenues per resident by industry are presented in Table 11.^Note  Revenues per resident are in general about two times to several times higher in Non-Indigenous CSDs than in First Nations and Inuit CSDs depending on industry class and employer status. However, Goods (non-resource) Non-Employers and Service Employers in Inuit CSDs have somewhat higher revenues per resident than the corresponding business types in Non-Indigenous CSDs. 

Comparing Employers and Non-Employers, revenues per resident of Employer businesses are in general between two times and several times higher than those for Non-Employers in the corresponding CSD type and industry grouping (except Inuit CSD Goods (resource), for which per resident revenues for Employers are much smaller than those of Non-Employers).

Inuit CSDs have higher per resident revenues at the All industries level than First Nations CSDs for both Employers and Non-Employers, although the differences are not as great as those between Non-Indigenous and First Nations CSDs. Per resident revenues are higher in Inuit CSDs than in First Nations CSDs for every combination of industry and employer class except Goods (resource) Employers (and excluding Unassigned).

For Non-Employer businesses at the All industries level, revenues per resident in Non-Indigenous CSDs (about $15,000) are about four times more than those of such ventures in First Nations CSDs (about $4,000) and nearly two and a half times in Inuit CSDs (about $6,000).

For Employer businesses at the All industries level, Non-Indigenous CSDs have revenues of about $50,000 per resident, compared to about $19,000, and about $34,000 for First Nations and Inuit CSDs, respectively. Employer businesses in the Service industry in First Nations CSDs have more than double the revenues per resident when compared to the Goods (non-resource) industry, and more than four times the revenues per resident when compared to the Goods (resource) industry. Similarly, among Employer businesses operating in Inuit CSDs, the Service industry has more than three times the revenues per resident of the Goods (non-resource) industry.

Business Revenues per Resident by Province/Territory

Table 12 shows revenues per resident by province/territory. Per resident revenues range from one and a half times to more than 35 times higher for Non-Indigenous CSDs than for First Nations and Inuit CSDs depending on geography and employer status. The two exceptions are for Non-Employer businesses in Northwest Territories, where Inuit CSDs have the highest revenues per resident, and First Nations CSDs in British Colombia where Employers CSDs have slightly higher values than the corresponding Non-Indigenous CSDs.

Non-Indigenous CSDs in Alberta have the highest revenues per resident for Employer type businesses, at about $75,000; while Inuit CSDs in Northwest Territories have the highest values for Non-Employer businesses, at about $45,000.

Median Business Revenues by Industry

Table 13 shows median revenues by industry. The patterns are quite different from what was observed for median business revenues in the sub-section above for Business Revenues per Resident by Industry. For Employers at the All industries level, Inuit CSDs have the highest median revenues (about $920,000), while First Nations CSDs have about half this level (about $460,000) and Non-Indigenous CSDs about one-third (about $350,000). For Non-Employers at the All industries level, Non-Indigenous CSDs and First Nations have similar median revenues (about $13,500), while the level in Inuit CSDs is about two-thirds of this (about $9,000).

When considering individual industry classes for Non-Employer businesses, First Nations have the highest median revenue values for Goods (non-resource) and Service, while Inuit CSDs have the top figures for Goods (resource).

Employer businesses in First Nations CSDs have higher median revenues than Non-Indigenous CSDs for Goods (non-resource) and Service industries. In turn, Inuit CSDs top First Nations CSDs for Goods (non-resource) by about three times and for Service by about two times. For Goods (resource) industries, First Nations and Non-Indigenous CSD median revenues are about the same, while Inuit CSD values are about half the level of the other two types of communities.

Within a CSD type, the Goods industries generally have higher median revenues than Service industries for both Employers and Non-Employers, except for Inuit Service Employers, which have higher median revenues than Inuit Goods (resource) industries.

While having fewer Employer businesses per resident and per community, First Nations and Inuit Employers tend to be larger than Non-Indigenous Employers as seen against median revenues.

Business Revenues per Community by Industry

Aggregate business revenues per community by industry are shown in Table 14. Both Non-Employer and Employer business revenues per community are higher in Non-Indigenous communities at the All industries level and for nearly every industry. However, Inuit Non-Employers in Goods (non-resource) and Employers in Service industries have higher revenues per community than counterparts in Non-Indigenous CSDs.

Business Revenues by Industry

In total, businesses in First Nations, Inuit and Non-Indigenous (population 3,500 or smaller) CSDs generated, respectively, about $8 billion, $2 billion, and $190 billion in annual revenues.^Note 

In general, across the three industry groups and all CSD types, Employer businesses generate larger revenues than Non-Employer businesses, except for Goods (resource) businesses in Inuit CSDs where Non-Employer businesses generated $58 million in revenues compared to $3 million from employer businesses. At the All industries level, Employers generate between about three and a half and five and a half times more revenues than Non-Employers depending on CSD type.

Service Employers and Non-Employers usually generate the highest share of revenues for all CSD types and employer classes – generally between two-fifths and three-fifths, but nearly four-fifths for Employers in Inuit CSDs. Goods (non-resource) industries are second in revenue generation among Employers in all CSD types and among Inuit Non-Employers, but for Non-Employers in Non-Indigenous CSDs, Goods (resource) industries generated four times as much revenues as Goods (non-resource) industries, while for Non-Employers in First Nations CSDs, Goods (resource) have slightly higher revenues.

Distribution of Revenues by Industry and Revenue Class

Table 15 shows aggregate revenue distribution in industries by revenue class. Depending on industry and CSD type, from about 60% to nearly all of revenues tend to be generated by businesses in the two largest revenue classes ($250,000 - $1,000,000 and Over $1,000,000), more so for Employers than Non-Employers. Non-Employer businesses in the Goods (non-resource) and Goods (resource) industries which operate in Inuit CSDs break from this trend, as in both cases the share of revenues from the over-$1,000,000 class was higher for Non-Employer than for Employer businesses.

Revenues for Employers are heavily concentrated in businesses that have revenues of over $1,000,000 for all CSD types, from over 75% to over 95% depending on industry grouping and CSD type.

Within an industry grouping, Inuit businesses have the highest shares of revenues in the over-$1,000,000 class for both Employers and Non-Employers, except for Goods (resource) Employers.

For Non-Employer businesses, Non-Indigenous CSD businesses have the most widely distributed revenues within an industry over the revenue classes used. Across all industry groupings for First Nations Non-Employers, while the over-$1,000,000 revenues class still dominates, revenues are also far less concentrated in this class than is the case with First Nations Employers. Inuit CSD Non-Employers also have wider revenue distribution than Inuit Employers but are more concentrated in the highest revenue class than Non-Employers in First Nations CSDs.

Distribution of Revenues by Province/Territory

In terms of distribution of revenues in provinces and territories, First Nations CSDs have their highest concentration of aggregate revenues in British Columbia, at over 35% for Non-Employer and nearly 55% for Employer businesses.^Note  This is followed by Alberta (about 25%) and Quebec (nearly 15%) for Non-Employers, and by Ontario and Alberta (each a little below 15%) and Quebec (over 10%) for Employer revenues.

Revenues in Inuit CSDs are concentrated in Nunavut, with about 70% Non-Employer and about 85% Employer revenues. Northwest Territories have about 25% Non-Employer revenues, while Quebec has about 10% of Employer revenues in Inuit CSDs.

The majority of the revenues for businesses in in-scope Non-Indigenous CSD are spread over three provinces, Quebec, Saskatchewan, and Alberta, which together account for over 60% for each of Non-Employers and Employers.

Distribution of Revenues by Industry and Business Age

Table 16 shows the distribution of revenues for industry groups by business age. For all CSD types and industries, the majority of revenues among Employers are earned by businesses that have been in operation for more than 10 years. The share of revenues for Employers in this the age group ranges from about 60% for First Nations CSDs in Service to 80% for First Nations CSDs in Goods (resource) industries.

Among Non-Employers as well, across CSD types, generally a higher share of all business revenues is earned by businesses that are more than 10 years old than in the other two age classes, though less so than is the case for Employers. The notable exception is Non-Employers in Inuit CSDs in Goods (non-resource) industries for which most of the revenues are earned by businesses born in the last 5 years.

Distribution of Revenues by Province/Territory, Industry, and Employer Status

Considering revenue distribution by province/territory and industry as a percentage of total Canadian revenues by CSD type and employer status,^Note  for First Nations CSDs, the largest contributor to both Non-Employer and Employer revenues is the Service industry in British Columbia, being responsible for about 25% and about 30% of revenues, respectively. Employers and Non-Employers in Alberta, Quebec and Ontario also have important industries in terms of revenues for First Nations CSD businesses. For Inuit CSDs, the largest contributor to both Non-Employer and Employer revenues is the Service industry in Nunavut, being responsible for about 40% and about 65% of revenues, respectively. Both types of goods-producers (non-resource and resource) in Nunavut are also the most important contributors to Inuit CSD revenues for Non-Employers, while Goods-producers (non-resource) are substantial players among Employers.

Revenues per Resident by Industry, Employer Status and Size of Employer Businesses

Examining revenues per resident in industries by employer status and size of Employer businesses, in every CSD type in Service industries, the largest share of revenues per resident is earned by businesses with 10 to 49 employees.^Note  Looking at all industry and employer size classes together, the highest aggregate revenues per resident for all three CSD types are earned in businesses with 10 to 49 employees in Service industries.

4.5 Profits of Businesses

It should be kept in mind that, as discussed in section 3 (Methodology), profits are calculated only for businesses for which both revenues and expenses were available on the BR. Moreover, profit statistics tend to fluctuate from year to year. This analysis only presents a snapshot for one year and might not reflect trends.

Profits per Resident by Industry

Table 17 shows profits per resident by industry. Profits per resident are generally higher for both Non-Employer and Employer businesses in Non-Indigenous CSDs than in First Nations and Inuit CSDs in almost every industry; the one exception being Employer type businesses in Inuit CSDs for the Service industry, which have slightly higher profits per resident than the corresponding businesses in Non-Indigenous CSDs.

At the All industries level, Employer businesses in Non-Indigenous communities cumulatively earn, respectively, about five times and about seven times the profits per resident of First Nations and Inuit CSD Employers. For Non-Employers, the multiple is about four for both First Nations and Inuit CSDs.

In terms of industries, the highest share of per resident profits comes from Service industries for all CSD types and for both Employers and Non-Employers. This is in line with the findings for the share of revenues for Service industries.

Profits per Resident by Province/Territory

Table 18 shows profits per resident by province/territory. Profits per resident are in general higher in Non-Indigenous CSDs for both Employers and Non-Employers than in First Nations and Inuit CSDs in the same province/territory. In New Brunswick and British Columbia, however, First Nations CSD profits per resident for Non-Employers are higher than Non-Indigenous CSD figures.

First Nations CSD Non-Employers are most profitable per resident in New Brunswick and British Columbia. First Nations CSD Employers have their highest profits per resident in British Columbia, Nova Scotia, and Quebec. In Inuit communities, both Non-Employers and Employers have their highest per resident profits in Northwest Territories and Nunavut. For Non-Indigenous CSDs, the highest per resident profits are found in Nova Scotia, Saskatchewan, and Alberta for Non-Employers, while Saskatchewan, Northwest Territories, and Alberta have the highest profits per resident among Employers.

Profits per Community by Industry

Aggregate profits per community by industry are shown in Table 19. At the All industries level, First Nations and Inuit CSDs average about the same profits per community for Non-Employers, while Non-Indigenous CSDs have over three times these levels. The highest profits per community for Non-Employers are earned in Service industries for all three CSD types.

For Employer businesses, Non-Indigenous communities average about one and a half times the profits per community of Inuit CSDs at the All industries level, while First Nations CSDs average only about a quarter the profits per community of Inuit CSDs at the All industries level. Service industries dominate in profits per community for all three CSD types.  

Profits by Industry

Between about 40% and 80% of business profits are earned in Service industries depending on CSD type and employer status.^Note 

In terms of employer status, the highest aggregate profits are earned by Employer businesses for all CSD types: slightly over one and a half times more than Non-Employers for Non-Indigenous CSDs, a bit under one and a quarter times for First Nations, and five times for Inuit CSDs.

Given that Employers earn, depending on CSD type, between four and six times the revenues of Non-Employers, the figures for profit shares indicate that for Non-Indigenous and First Nations CSDs, Non-Employers have higher profitability in the aggregate than Employers, while for Inuit CSDs the two types have comparable profitability.

Profits by Province/Territory

For Employers in First Nations CSDs, more than 90% of aggregate profits are earned in British Columbia, followed by Quebec, Saskatchewan, and Nova Scotia. For Inuit CSDs, more than 90% of the profits of Employers are earned in Nunavut.

For Non-Employers, more than half of the profits of First Nations CSDs are made in British Columbia, followed by about a fifth in New Brunswick and a sixth in Alberta. In Inuit CSDs, about three quarters of profits are netted in Nunavut, while about a sixth are made in Quebec.

For both Non-Employer and Employer businesses operating in Non-Indigenous CSDs in scope for this study (i.e., those with a population of 3,500 or below), the largest amounts of aggregate profits are in Quebec, Saskatchewan, and Alberta.^Note  The largest contributing province, Quebec, represents more than a quarter of all in-scope Non-Indigenous CSD profits in the case of both Employers and Non-Employers.

Distribution of Profits by Province/Territory and Industry

Profit distribution within each province/territory by industry is shown in Table 20. Note that data are presented in percentage of net profits for the province/territory.

Service industries tend to be the most dominant in profit generation amongst both Employers and Non-Employers in all types of CSDs across most provinces/territories, although there are a few exceptions.

Goods (resource) industries, for example, are the most significant for profits in Saskatchewan First Nations and Non-Indigenous CSDs for both Employers and Non-Employers, as well as for Non-Employers in Inuit and Non-Indigenous CSDs in Newfoundland and Labrador.

Goods (non-resource) Non-Employers dominate in Nova Scotia among First Nations CSDs.

Non-Employers and Employers in many industries and provinces/territories in First Nations CSDs suffer losses at the aggregate level; however, profits are the more common story. Losses are less common among Inuit CSDs and rarer still in Non-Indigenous CSDs industries.

Profits by Industry and Revenue Class

Table 21 shows profits in industries by revenue class. For nearly all CSD type, employer status and industry combinations, the largest shares of profits are made by businesses in the Over $1,000,000 revenue class. The sole exception are Non-Employer Goods (non-resource) businesses in First Nations CSDs, for which the most profits are in the $250,000 and $1,000,000 revenue class, while aggregate losses are seen in the Over $1,000,000 revenue class.

5 Conclusions

This paper provides a first comparative profile of businesses in Indigenous (First Nations and Inuit) communities and Non-Indigenous communities of similar population size. It should be once again emphasized that the analysis takes a regional perspective by looking at the characteristics of all businesses located in Indigenous communities (census subdivisions), regardless of the ownership of the business. Hence, this analysis provides insights on the business environment and dynamics faced by these different type of communities. 

All the business data used in the analysis are generated from the Business Register (BR). Businesses were classified into industry groups, as employers and non-employers, and by revenue, size (by number of employees) and age classes, as well as geographically into provinces/territories and by type of community, i.e., Non-Indigenous, First Nations and Inuit. The variables employed selected are those that are generally available for the majority of businesses and with a degree of consistency and quality such as to generate a comparative picture of the business environments and performance in the three types of communities. Nevertheless, it is important to emphasize that most results are based on a single time period (i.e., a cross-section) and should not be interpreted as representing trends. It should also be recalled that the results are based on the aggregation of all CSDs of a given type (i.e., Non-Indigenous, First Nations and Inuit). This is in contrast to using simple averages.

Two general types of conclusions emerged from this analysis, one related to the overall results, the second to the usability of BR data for this type of analysis.

With respect to the results, the regional approach used in this analysis provides a first cross-national portrait of the business environment in aboriginal communities. Albeit limited to a set of general indicators (particularly, revenues, employment, entry and exits, and profits), the results highlight both distinguishing features as well as similarities between the business environments of Indigenous communities and Non-Indigenous communities of similar population size. In so doing, this profile is a further step forward in addressing data gaps on the nexus between businesses and Indigenous information. Results show that counts of businesses per resident are in general several times lower in Indigenous communities than in Non-Indigenous communities of similar population size. Business churn (entry and exits) tends to be higher in Indigenous communities, while revenue and profit per resident tend to be lower. Nevertheless, First Nations and Inuit businesses with employees tend to be larger than businesses with employees in Non-Indigenous Employers in terms of median revenue, suggesting that relatively large businesses may play a greater role in shaping the business environment of Indigenous communities. 

This analysis highlights also the potential and suitability of the BR for this type of place-based analysis. Unquestionably, there are limitations and areas of potential improvements of BR data; for instance, expense values are missing for a sizable share of businesses and the information on entry or exit of a business requires some assumption or approximation. All this said, the BR remains the most comprehensive and granular database for the analysis of business performance and characteristics at the local level. The degree of coverage for basic businesses indicators, such as counts of businesses, revenues, number of employees, assignment to an industry based on NAICS, and location, remains unmatched by any other business microdata source available for Canada. The ongoing work for the development of a longitudinal BR will further strengthen this database and facilitate the production of more accurate business demography statistics (entry, exit, survival, high growth, etc.). The longitudinal BR will follow businesses in time from the moment of creation to cessation of activities, and through business demographic events.

As a result, this analysis should be considered as a starting point for future updates and extension of business indicators in Indigenous communities.  Further extensions and update of this work could look into the effects of remoteness and of nearby CSDs on businesses in Non-Indigenous, First Nations and Inuit communities (Alasia, et al., 2017) and (Alasia and Davies, 2015). Thus, future analysis could asses how performance of businesses varies by the population of the CSD in which they are located as well as in the context of the population of a composite larger nearby area. Moreover, in-depth analysis of a selected or representative regions for each of the community types could also be pursued.

6 Appendix

7 References

Alasia, A., & Davies, A. (2015). Geolocation of Business Register data: Results from a prototype database. Meeting of the Group of Experts on Business Registers organized jointly by UNECE, Eurostat and OECD. Brussels, 21-23 September 2015. Brussels: UNECE, Eurostat, OECD.

Alasia, A., Bedard, F., Belanger, J., Guimond, E., & Penney, C. (2017). Measuring Remoteness and Accessibility: a set of indicators for Canadian Communities. Reports on Special Business Projects. Catalogue No. 18-001-X. Statistics Canada.

Eurostat-OECD. (2007). Eurostat-OECD Manual on Business Demography Statistics. Paris: Eurostat, OECD.

Indigenous and Northern Affairs Canada. (2012). Measuring Well-Being: The CSD Well-Being (CWB) Index.

Organization for Economic Co-operation and Development. (2018). Indigenous Employment and Skills Strategies in Canada, OECD Reviews on Local Job Creation. Paris: OECD Publishing.

Statistics Canada. (n.d.). Business Register information.