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Appendix A.  Change in number of firms by size of firm, Canada, 2003 to 2007

For Canada as a whole, the total number of firms increased in each size class – except for a 3% decline in the number of firms with 5 to 9 employees (Table A.1). The number of firms with 200 or more employees increased 1.6 thousand in larger urban centres (LUC) – which was an increase of 19% over this period. The number of firms with 1 to 4 employees increased in all geographic areas, except No MIZ. Strong MIZ and Weak MIZ showed an increase in firms with 200 or more employees over this period. The number of firms within RST in the other size classes declined from 2003 to 2007.

Table A.1 Change in number of firms within each size class, Canada, 2003 to 2007

Appendix B. Manufacturing firms in the value chain of a resource sector

One objective of our study is to document the number and change in manufacturing firms that are in the value chain of a resource sector. The resource sectors include the sectors of agriculture, forestry, fishing, mining and oil and gas. Firms that process the products of a primary resource sector have been assigned as part of the value chain of a resource sector. For the purpose of this study and to be consistent with the analysis of manufacturing employment by Beshiri (2010), the manufacturing firms assigned to the value chain of a resource sector are specified in Table B.1.

With this delineation, 52% of all manufacturing firms in Canada are part of the value chain of a resource sector. Within the group of manufacturing firms in the value chain of a resource sector, about one-quarter are associated with the agriculture sector, about one-third are associated with the forestry sector and another approximate one-third are associated with the mining sector.

Among manufacturing firms in the value chain of a resource sector, one sub-sector, beverage and tobacco product manufacturing, recorded an increase in the number of firms (up 11%) between 2003 and 2007. All other sub-sectors in the value chain of a resource sector recorded declines with the largest decline (-27%) being in the number of firms in the leather and allied product manufacturing sector.

Overall, the number of manufacturing firms in the value chain of a resource sector declined by 5% from 2003 to 2007, compared to a decline of 7% in the number of firms in all other manufacturing sub-sectors.

Table B.1 Manufacturing firms in the value chain of a resource sector, Canada, 2003 and 2007

Appendix C. Estimating the degree of "reliance" or "dependency" of a community on a primary sector value chain

For this delineation, we have adopted the delineation of "resource-reliance" as portrayed on the National Atlas of Canada (Natural Resources Canada, 2001; White and Watson, 1998).

They allocated the following industrial sectors (using SIC (Standard Industrial Classification) codes) to each of the value chains of a resource sector.

The agriculture sector value chain:

• Major Group 01 – Agricultural (Farming) Industries;
• Major Group 02 – Service Industries Incidental to Agriculture;
• Major Group 10 – Food Processing Industries (all groups, except 102 – Fish Products Industry);
• Group 471 – Grain Elevator Industry;
• Major Group 50 – Farm Products Industries, Wholesale (all groups); and
• Group 521 – Food Wholesale.

The energy sector value chain:

• Major Group 07 – Crude Petroleum and Natural Gas Industries;
• Group 091 – Service Industries Incidental to Crude Petroleum and Natural Gas;
• Major Group 36 – Refined Petroleum and Coal Products Industries;
• Major Group 46 – Pipeline Transport;
• Group 491 – Electric Power Systems Industry;
• Group 492 – Gas Distribution Systems Industry; and
• Group 51 – Petroleum Products Industries, Wholesale.

The fishing sector value chain:

• Group 031 – Fishing Industries;
• Group 032 – Services Incidental to Fishing; and
• Group 102 – Fish Products Processing Industry.

The forestry sector value chain:

• Major Group 04 – Logging Industry;;
• Major Group 05 – Forestry Services Industry;
• Major Group 25 – Wood Processing Industries; and
• Major Group 27 – Paper and Allied Products Industries.

The mining sector value chain:

• Major Group 06 – Mining Industry;
• Major Group 08 – Quarry and Sand Pit Industries;
• Group 092 – Service Industries Incidental to Mining;
• Major Group 29 – Primary Metal Industries;
• Group 351 – Clay Products Industries;
• Group 358 – Lime Industry; and
• Group 561 – Metal and Metal Products, Wholesale.

For each of these value chains, the following steps were taken:

1. For each community, for each value chain (and for an "all other" group), they tabulated the Census of Population to obtain the employment income reported by workers with their major job in each of these value chains;
2. For each community and for each value chain (and for the "all other" group), they calculated the employment income associated with production that was not required for local needs.
   • The estimate of the level of employment income required for each value chain to satisfy local needs was proxied by a province-level calculation, as follows. The provincial gross domestic product (GDP) for each value chain was determined. The net value of exports (i.e. exports minus imports) from the province for this value chain was subtracted from the GDP of the value chain to get an estimate of the GDP in each value chain that met provincial needs. This estimated amount to satisfy provincial needs was than divided by the provincial level GDP to get an estimate of the percent of the provincial level of production that was needed to satisfy provincial needs for the given value chain.
3. For each community and for each value chain, this percent was multiplied by the community aggregate employment income to estimate the amount of community employment income that would be needed to meet community needs. All employment income in each value chain in the given community that was above this amount was considered to be a contribution to the "economic base" (or the "export base") of the community.
4. For each community, the size of the economic base was calculated – including the contribution of the value chain for each resource sector plus the contribution of all other sectors (e.g. health services, educational services, retail trade, etc.)
5. The contribution of each resource-sector value chain to the community economic base was calculated.
6. The percent contribution of the value chain of each resource sector to the economic base of the community was designated as the estimate of "resource-reliance" or "economic-dependency" of the community on the value chain of the particular resource sector.

In 2001, there were 1,918 census subdivisions (i.e. incorporated towns and municipalities) with 30% or more of their economic base generated by a resource sector value chain (Table C.1).

Table C.1. Number of resource-reliant communities, Canada, 2001

If we select all communities with more than 30% of the economic base being contributed by a resource sector value chain, we observe these communities represent 37% of all the communities in RST areas (Table C.1 and Figure C.1). Nearly 60% of the Weak MIZ communities are reliant on a resource sector value chain.

Figure C.1 In the Weak MIZ, 57% of the communities are "reliant" on a resource sector value chain (contributing 30% or more to the economic base of the community), Canada, 2001

Compared to the 37% of RST communities being "resource-reliant", we find that 53% of the population of RST areas lives in a community that is reliant on a resource sector value chain (Figure C.2). This proportion varies across the geographic groups, from a high of 60% in Weak MIZ to a low of 44% in No MIZ and 25% in the RST Territories.

Figure C.2 In the Weak MIZ, 60% of the population resides in communities that are "reliant" on a resource sector value chain (contributing 30% or more to the economic base of the community), Canada, 2001

Among all firms (in all sectors) in RST areas, one-half are located in a community that is reliant on a resource sector value chain (Figure C.3).

Figure C.3 In rural and small town Canada, 50% of the firms are located in communities reliant on the primary sector

In terms of the change in the number of firms, RST resource-reliant communities reported a larger decrease in the number of firms in all sectors, compared to the change in number of firms in all RST communities (Figure C.4). Note that number of firms in LUC resource-reliant communities increased more than the number of firms in all LUC communities¹.

Figure C.4 There was a 3% decline from 2003 to 2007 in the total number of (manufacturing and non-manufacturing) firms in rural and small town communities that were reliant on a resource sector

Note

1. In 2001, there were 140 census metropolitan areas (CMAs) and census agglomerations (CAs) in Canada. These are labour market areas as any neighbouring census subdivision (i.e. incorporated town or municipality) with more than 50% of their workforce commuting to the CMA/CA urban core is included in the given CMA or CA. In 2001, there were 995 census subdivisions included in a CMA or CA in Canada. Census subdivisions are referred to as "communities" in this bulletin.