Economic and Social Reports
Cultural industries in Canada: Exploring firm dynamics and measurement

Release date: April 23, 2025

DOI: https://doi.org/10.25318/36280001202500400005-eng

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Abstract

Technological change has led to opportunities and challenges for firms in cultural industries, prompting questions about how these industries have been impacted in Canada. However, there is a lack of information about firms operating in cultural domains. This study attempts to fill this information gap by identifying firms in Canada’s cultural supply chain using administrative data from 2008 to 2020. The key insights from this analysis show that, over time, small unincorporated firms made up an increasingly large percentage of cultural firms, consistent with a decrease in barriers for individuals looking to enter creative industries. These small unincorporated firms also seemed less affected by the onset of the COVID-19 pandemic. In 2020, the number of unincorporated firms decreased by 3.6%, compared with 8.6% for incorporated firms. Additionally, the only type of firm to grow in number from 2019 to 2020 was small unincorporated firms involved in the manufacturing of creative goods.

Keywords: culture, cultural institutions, firm dynamics

Authors

Rupert Allen is with the Strategic Policy, Planning and Research Directorate, Canadian Heritage. Ryan Macdonald, Josip Lesica and Jenny Watt are with the Economic Analysis Division, Statistics Canada.

Acknowledgments

This project was supported by Canadian Heritage. The authors would like to thank the Satellite Accounts and Data Development team within the National Economic Accounts Division for advice on categorizing cultural firms. The authors would also like to thank Jay Dixon for contributions to the early stages of this project. Lastly, they thank their two referees for their helpful feedback.

Introduction

Technological change in the last 40 years has altered the outlook of Canadian firms. Cultural industries have been especially affected by post-2000 advances in information and communications technologies (Massi et al., 2020; Nieborg et al., 2020). Culture is, at its core, about the creation, production, dissemination and consumption of ideas, so firms in cultural industries are especially influenced by technological changes that make ideas cheaper to create, disseminate and use.

Technological change has led to opportunities and challenges for firms in cultural industries (Massi et al., 2020; Nieborg et al., 2020). The tools for idea creation are more accessible, creative work can be reproduced at a negligible marginal cost and global distribution is in many cases virtually costless. As a result, culture is cheaper to produce, and potential markets for it have expanded. But lower entry costs also lead to more competition, both domestically and from abroad.

Moreover, the digitization of information has made it more difficult for many firms in cultural industries to monetize their output (Massi et al., 2020). Literary works are no longer dependent on expensive printing presses for their production, nor must they be on paper to be sold; music produced on a home computer can be distributed by pressing a button, rather than by pressing and selling CDs. Thus, the traditional business model of funding written work or recorded sound by selling physical packaging is often no longer viable for many firms (Wikström, 2020). This evolution leads to questions about the impacts of changes in markets on Canadian cultural industries.

Currently, Statistics Canada’s Culture Satellite Account (CSA) produces aggregate estimates of output, gross domestic product and employment for Canada’s cultural industries, both in aggregate and broken down by product-level domain and subdomain (Statistics Canada, 2022b). However, there is a lack of information about firms operating in cultural domains. This study attempts to fill this information gap by using administrative data to identify Canadian cultural firms present from 2008 to 2020.

A major challenge when studying firms that produce cultural output is identifying them. Cultural goods and services are provided to consumers via several industries, and some industries that produce, distribute or support cultural output may produce other goods and services as well. This paper focuses on identifying cultural firms, providing information on the number of cultural firms disaggregated by various characteristics, and analyzing some dynamics (e.g., entry rates) among cultural firms. This work can be used to support future examinations of foreign firm participation in Canadian markets and the evolution of the Canadian cultural supply chain.

The key insights from this analysis show that, over time, small unincorporated firms made up an increasingly large percentage of cultural firms, consistent with a decrease in barriers for individuals looking to enter creative industries (Massi et al., 2020; Nieborg et al., 2020). These small unincorporated firms also seemed less affected by the onset of the COVID-19 pandemic (Cucinotta & Vanelli, 2020). In 2020, the number of unincorporated firms decreased by 3.6%, compared with 8.6% for incorporated firms. Additionally, the only type of firm to grow in number from 2019 to 2020 was small unincorporated firms involved in the manufacturing of creative goods.

The remainder of this paper proceeds as follows. Section 2 discusses the challenges of mapping the definitions used by the CSA to firm-level data. Section 3 explains how the data are compiled. Section 4 discusses how firm counts and dynamics have evolved since 2008, and Section 5 provides a conclusion.

Defining cultural industries

The Canadian Framework for Culture Statistics (CFCS) defines a cultural industry for the purpose of statistical analysis as “creative artistic activity and the goods and services produced by it, and the preservation of heritage” (Daschko & Allen, 2011). Firms in cultural industries must satisfy at least one of six criteria: their output is “copyrightable;” their activities support the creation, production, dissemination or preservation of culture products; they add to, or alter, the content of a culture product (content services); they preserve, exhibit or interpret human or natural heritage; they provide training or educational services aimed at individuals who create, produce or preserve culture products; or they govern, finance or directly support culture creation, production or dissemination.

The CSA divides activities that meet this definition into nine domains, by type of culture (Statistics Canada, 2022b). Each domain consists of one or more “core,” “ancillary” or “transversal” subdomains (see Table A.1 of the appendix for a list of domains and subdomains). Firms in “core culture” subdomains enable or facilitate the consumption of goods and services that transmit an intellectual or cultural concept. For example, the culture subdomain of film and video, including the production, distribution, retail sale, rental and manufacturing of videotapes, is a core subdomain. Ancillary subdomains, such as architecture or design, involve creative activities, but the purpose of their final products is not primarily cultural. An imaginatively designed bridge may become a cultural icon, but its primary objective is to provide transportation services. Activities in the transversal domains, such as education, may support a range of creative activities by providing skills or funding, but they do not create, produce or distribute culture products themselves. These domains are useful for categorizing culture based on industry structures and how central they are to the production of cultural outputs. However, they do not lend themselves as easily to discussions of how the process of creation and dissemination of culture products happens.

Therefore, this paper classifies firms by the role they play in the supply chain of culture. This allows for firms that have similar roles to be grouped, regardless of where they are situated across the domains explained in the CSA. Cultural production consists of up to four distinct stages, and each firm in a cultural industry may be involved in one or more of them. Arranged from product origin to product consumption, the stages are creation (of ideas), production, manufacturing (of physical media embodying ideas) and distribution. A fifth supply chain activity, support, may enter at various points in the chain. As discussed by Massi et al. (2020), changes in technology and markets have different implications along the supply chain, such as making culture products easier to create, unnecessary to manufacture and more complicated to disseminate.Note  The way firms respond to changing technologies will thus depend on the parts of the cultural supply chain in which they are involved.

Measuring the cultural supply chain using firm-level data

Empirical researchers of Canadian cultural firms face a few obstacles, the biggest of which being that “culture” is not a recognized industry group in Statistics Canada’s system of economic accounts. Statistics Canada classifies firms according to the North American Industry Classification System (NAICS) by the similarity of the nature of their outputs, not by their place in a specific supply chain or input structure or their labour forces or production processes (Statistics Canada, 2024a). Thus, firms in the cultural supply chain may be assigned to one of a variety of NAICS codes, and those that include cultural domains may also include many firms producing non-cultural output.Note 

The CSA produces its aggregate estimates by leveraging multiple administrative sources and surveys that include or cut across industries that produce cultural output. These sources are used to generate “split factors” that are applied to NAICS industry-level employment, gross output and value added to estimate the cultural industry overall and by domain or subdomain. Unfortunately, these factors cannot be applied directly to firms.

Consequently, researchers who employ unit-level data are confronted with a choice: include all firms within an industry, as defined by the CSA, or exclude the industry. Examinations of the industry structure show that some industry codes are more closely aligned with the CFCS definition of “cultural” industries than others. For example, firms assigned to NAICS 7111, performing arts companies (part of the core culture subdomain of performing arts in the CSA), all have “the creation, production [and] dissemination… of culture products” as their main activity and align closely with the intentions of the satellite account definitions. By contrast, apparel manufacturing (NAICS 315) firms are not generally considered cultural firms but would meet the definition if they produce textile designs that are “copyrightable” or protected by intellectual property rights. There are currently no data available from Statistics Canada that distinguish copyrighted from non-copyrighted output at the firm level.

These examples illustrate that the use of firm-level data necessitates a degree of judgment by researchers about the industries to include in the cultural supply chain. Therefore, Table A.1 also shows whether industries are included in or excluded from the unit-level analysis based on a judgment about whether the units within them are almost exclusively, mainly or majority producers of cultural outputs.Note  Each industry is also classified according to its primary function in the cultural supply chain.

Firm-level data

Firm-level data for the cultural supply chain are derived from two firm-level datasets maintained by Statistics Canada: the National Accounts Longitudinal Microdata File (NALMF) and the Canadian Employer–Employee Dynamics Database (CEEDD) (Statistics Canada, 2022a). Both datasets are derived from Statistics Canada’s Business Register (BR) (Statistics Canada, 2020) but use data derived from administrative files to add information. For firms to be included in the NALMF, they must do at least one of the following: file a T2 Corporation Income Tax Return, issue a T4 Statement of Remuneration Paid, or remit sales taxes or payroll deductions and contributions. Therefore, the NALMF primarily includes larger incorporated firms, but some unincorporated firms with employees are included.

The CEEDD is the primary source for unincorporated firms. Unincorporated firms are identified based on business declarations made as part of their T1 tax filings. These firms are smaller and usually run by the entrepreneur who files the form. They rarely have employees. Unincorporated firms in cultural industries typically represent small content creators, but this may range from customized content sold via the Internet to authors who self-publish to artists (singers, songwriters, painters, etc.) who do contract work.

Firms from both data sources are selected based on the NAICS codes included in Appendix Table A.1, where the NAICS codes are derived from the BR. For the NALMF, only active firms with positive revenue are retained. If an unincorporated firm is present in both data sources, the record from the CEEDD is retained. It should be noted that, for firms identified from T1 tax filings, NAICS is self-coded, and there is generally no opportunity for Statistics Canada to correct codes. For example, NAICS 711120 is meant to include dance companies that produce dance performances and, therefore, culture. However, a dance instructor searching for a NAICS code to include on their tax form may select this code—though they should instead select a code from the educational services sector—and there would be no way for users of CEEDD data to identify the error.

Results

This section begins by examining the counts of unincorporated and incorporated firms, first overall, then by stage of production and finally by Canadian region. Then, additional analysis on counts and firm dynamics (entry and exit) is performed for incorporated firms only, for three reasons. First, while there are fewer incorporated firms, they generate most cultural activity in terms of revenue and employment. Second, initial results show that the number of incorporated firms is decreasing in several Canadian regions, and this merits further investigation. Third, focusing on incorporated firms allows for comparison with external sources, because existing estimates of firm dynamics focus on firms with employees (Statistics Canada, 2024b).

Counts of incorporated and unincorporated firms in the cultural supply chain

There are 310,000 to 460,000 firms that participate in the cultural supply chain each year, based on the rules used for identifying incorporated and unincorporated firms (Chart 1). The number of unincorporated firms is larger than that of incorporated firms, and the difference has increased over time, with incorporated firms making up about 88% of firms in 2008 and about 92% in 2020.

Data table for Chart 1
Data Table for Chart 1 Table summary
This table displays the results of Data Table for Chart 1 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using number of firms units of measure (appearing as column headers).
  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
number of firms
Source: Statistics Canada, authors' calculations.
Unincorported firms 273,546 272,559 277,157 334,573 349,421 359,599 367,976 376,394 390,919 406,046 416,123 437,305 421,482
Incorporated firms 38,902 39,277 39,547 40,148 40,735 41,119 41,515 41,726 41,974 39,948 39,785 40,060 36,624

Most of the unincorporated firms are engaged in the creation and production stages of the supply chain (Table 1). Very few unincorporated firms are involved in manufacturing or distribution, but this does not mean that the creation or production activities of unincorporated businesses are inconsequential. Activities such as songwriting, authoring manuscripts or creating original artwork (paintings or sculptures) all lead to important innovations within the scope of cultural outputs. The outputs of the unincorporated firms tend to be at a smaller scale than outputs produced by incorporated firms. However, it is precisely these smaller firms whose business models will expand rapidly as new technologies such as social media platforms and platforms designed for digital publishing and distribution or online sales lower their costs and expand their market sizes.

There are also relatively more incorporated firms in the creation and production stages of the supply chain than in manufacturing and distribution (Table 2). However, compared with the distribution of unincorporated firms, there are relatively fewer incorporated firms in these stages and relatively more firms in the manufacturing and distribution stages of the supply chain. A smaller number of larger firms is expected in the manufacturing and distribution stages of the supply chain, given the larger capital requirements for these types of activities. “Support activities” is the stage of the supply chain with the fewest number of firms. Examinations of incorporated firm information also identified several firms (all with a charity designation) that should be within the scope of the cultural supply chain (for example, libraries, or heritage or conservation groups), but whose NAICS codes indicate they are outside the CSA. These firms that are outside the cultural supply chain make up 6.8% to 8.1% of firms, depending on the year.

From 2008 to 2019, there was a shift in the composition of the number of cultural firms toward creation and production and away from manufacturing, distribution and support. This occurred for both incorporated and unincorporated firms. For incorporated firms, there was a long-term adjustment, with an increase of about 1% to 2% per year in the number of creation and production firms and a decrease of about 1% to 2% per year in the number of manufacturing and distribution firms. In 2020, the first year of the COVID-19 pandemic, the pattern partially reversed itself—the number of active firms in creation fell more rapidly than the number of firms in other parts of the supply chain (by 7.1%). Firms engaged in creation may have been more affected by economic restrictions caused by the pandemic.

For calculations related to region, the Atlantic provinces (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick) are grouped, as are the Prairie provinces (Manitoba, Saskatchewan and Alberta). In terms of unincorporated cultural firms, Quebec, Ontario and British Columbia (the most populous provinces) were host to a majority of firms (Table 3). From 2008 to 2019, the number of active incorporated firms increased in all regions, with annual average growth rates ranging from 3.8% (the Atlantic provinces and Ontario) to 5.1% (British Columbia).

In 2020, the number of active cultural firms declined in all regions, except for the Atlantic provinces. The decline in firms from 2019 to 2020 was largest in Quebec (-6.1%), followed by the Prairie provinces and British Columbia (both -3.1%), and then Ontario (-2.9%). Despite these decreases, every region had a larger number of unincorporated firms in 2020 than in 2008, the beginning of the study period.

Active incorporated firms experienced less growth (Table 4). From 2008 to 2019, the number of active incorporated firms increased by an annual average of 1% in Ontario and 0.9% in British Columbia.

The number of active firms in the Atlantic provinces (-0.6%), the Prairie provinces (-0.4%) and Quebec (-0.1%) declined, on average, each year.

Table 1
Unincorporated firms in the cultural supply chain, by supply chain stage Table summary
This table displays the results of Unincorporated firms in the cultural supply chain, by supply chain stage 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using number of firms, and percent of total units of measure (appearing as column headers).
  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
number of firms
Source: Statistics Canada, authors' calculations.
Total 273,546 272,559 277,157 334,573 349,421 359,599 367,976 376,394 390,919 406,046 416,123 437,305 421,482
Creation 121,252 124,315 127,419 150,202 153,618 159,731 165,622 171,043 179,744 189,861 195,300 206,237 198,519
Production 53,659 53,944 55,897 70,711 75,906 78,331 80,308 81,808 84,538 88,923 90,974 96,228 90,141
Manufacturing 38,243 36,234 34,794 40,591 41,853 42,704 42,600 43,056 44,135 44,711 44,912 45,603 46,555
Distribution 47,250 44,948 44,326 54,488 57,105 57,085 56,729 56,519 56,961 56,747 57,177 58,997 58,199
Support 13,142 13,118 14,721 18,581 20,939 21,748 22,717 23,968 25,541 25,804 27,760 30,240 28,068
  percent of total
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Creation 44.3 45.6 46.0 44.9 44.0 44.4 45.0 45.4 46.0 46.8 46.9 47.2 47.1
Production 19.6 19.8 20.2 21.1 21.7 21.8 21.8 21.7 21.6 21.9 21.9 22.0 21.4
Manufacturing 14.0 13.3 12.6 12.1 12.0 11.9 11.6 11.4 11.3 11.0 10.8 10.4 11.0
Distribution 17.3 16.5 16.0 16.3 16.3 15.9 15.4 15.0 14.6 14.0 13.7 13.5 13.8
Support 4.8 4.8 5.3 5.6 6.0 6.0 6.2 6.4 6.5 6.4 6.7 6.9 6.7
Table 2
Incorporated firms in the cultural supply chain, by supply chain stage Table summary
This table displays the results of Incorporated firms in the cultural supply chain, by supply chain stage 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using number of firms, and percent of total units of measure (appearing as column headers).
  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
number of firms
Source: Statistics Canada, authors' calculations.
Total 38,902 39,277 39,547 40,148 40,735 41,119 41,515 41,726 41,974 39,948 39,785 40,060 36,624
Creation 10,697 10,993 11,154 11,551 11,893 12,100 12,297 12,380 12,450 12,443 12,545 12,729 11,829
Production 14,718 14,893 15,060 15,323 15,660 15,970 16,181 16,445 16,703 15,093 15,095 15,311 14,171
Manufacturing 3,845 3,772 3,679 3,602 3,509 3,445 3,358 3,331 3,268 3,176 3,083 3,029 2,785
Distribution 5,709 5,589 5,520 5,446 5,378 5,279 5,287 5,179 5,115 4,881 4,785 4,706 4,294
Support 933 970 1,007 1,061 1,113 1,149 1,202 1,198 1,229 1,130 1,130 1,161 1,049
Outside Culture Satellite Account 3,000 3,060 3,127 3,165 3,182 3,176 3,190 3,193 3,209 3,225 3,147 3,124 2,496
  percent of total
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Creation 27.5 28.0 28.2 28.8 29.2 29.4 29.6 29.7 29.7 31.1 31.5 31.8 32.3
Production 37.8 37.9 38.1 38.2 38.4 38.8 39.0 39.4 39.8 37.8 37.9 38.2 38.7
Manufacturing 9.9 9.6 9.3 9.0 8.6 8.4 8.1 8.0 7.8 8.0 7.7 7.6 7.6
Distribution 14.7 14.2 14.0 13.6 13.2 12.8 12.7 12.4 12.2 12.2 12.0 11.7 11.7
Support 2.4 2.5 2.5 2.6 2.7 2.8 2.9 2.9 2.9 2.8 2.8 2.9 2.9
Outside Culture Satellite Account 7.7 7.8 7.9 7.9 7.8 7.7 7.7 7.7 7.6 8.1 7.9 7.8 6.8
Table 3
Unincorporated firms in the cultural supply chain, by region Table summary
This table displays the results of Unincorporated firms in the cultural supply chain, by region 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using number of firms, and percent of total units of measure (appearing as column headers).
  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
number of firms
Source: Statistics Canada, authors' calculations.
Atlantic provinces 12,376 12,313 12,419 14,588 15,343 15,673 15,851 15,944 16,623 17,084 17,771 18,691 18,775
Quebec 65,718 66,538 68,778 81,968 87,546 91,460 94,131 97,194 100,369 106,414 108,241 111,143 104,364
Ontario 109,831 108,714 109,568 134,680 139,630 142,013 144,676 146,134 151,098 154,392 157,517 166,341 161,573
Prairie provinces 37,763 37,234 38,348 44,601 45,938 47,283 47,790 49,103 50,758 53,787 55,415 58,442 56,659
British Columbia 47,197 47,113 47,356 57,939 60,133 62,241 64,575 67,076 71,062 73,330 76,112 81,561 79,045
  percent of total
Atlantic provinces 4.5 4.5 4.5 4.4 4.4 4.4 4.3 4.2 4.3 4.2 4.3 4.3 4.5
Quebec 24.1 24.5 24.9 24.6 25.1 25.5 25.6 25.9 25.7 26.3 26.1 25.5 24.8
Ontario 40.2 40.0 39.6 40.4 40.1 39.6 39.4 38.9 38.8 38.1 38.0 38.1 38.4
Prairie provinces 13.8 13.7 13.9 13.4 13.2 13.2 13.0 13.1 13.0 13.3 13.4 13.4 13.5
British Columbia 17.3 17.3 17.1 17.4 17.3 17.4 17.6 17.9 18.2 18.1 18.3 18.7 18.8
Table 4
Incorporated firms in the cultural supply chain, by region Table summary
This table displays the results of Incorporated firms in the cultural supply chain, by region 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using number of firms, and percent of total units of measure (appearing as column headers).
  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
number of firms
Source: Statistics Canada, authors' calculations.
Atlantic provinces 1,976 1,952 1,958 2,019 2,039 2,060 2,059 2,017 2,025 1,919 1,887 1,852 1,689
Quebec 9,743 9,757 9,800 9,874 9,872 9,857 9,848 9,877 9,897 9,657 9,665 9,688 9,154
Ontario 14,474 14,653 14,804 15,186 15,476 15,723 15,930 16,065 16,220 16,046 15,958 16,123 14,614
Prairie provinces 6,551 6,578 6,617 6,716 6,822 6,870 6,896 6,805 6,689 6,377 6,309 6,285 5,664
British Columbia 6,843 6,898 6,973 6,995 7,070 7,140 7,247 7,331 7,455 7,355 7,434 7,520 6,983
  percent of total
Atlantic provinces 5.0 4.9 4.9 4.9 4.9 4.9 4.9 4.8 4.8 4.6 4.6 4.5 4.4
Quebec 24.6 24.5 24.4 24.2 23.9 23.7 23.5 23.5 23.4 23.4 23.4 23.4 24.0
Ontario 36.6 36.8 36.9 37.2 37.5 37.8 37.9 38.2 38.4 38.8 38.7 38.9 38.4
Prairie provinces 16.5 16.5 16.5 16.5 16.5 16.5 16.4 16.2 15.8 15.4 15.3 15.2 14.9
British Columbia 17.3 17.3 17.4 17.1 17.1 17.1 17.3 17.4 17.6 17.8 18.0 18.1 18.3

At the onset of the pandemic, the number of active incorporated cultural firms decreased in all regions. The decline in firms (in percentage terms) from 2019 to 2020 was largest in the Prairie provinces (-10.0%), Ontario (-9.4%) and the Atlantic provinces (-8.8%), followed by British Columbia (-7.1%) and Quebec (-5.5%). These decreases are all larger than the corresponding rates for unincorporated firms. Additionally, while the number of unincorporated firms grew across regions from 2008 to 2020, the number of incorporated firms decreased from 2008 to 2020 in the Atlantic provinces, Quebec and the Prairie provinces.

Additional analysis on incorporated firms

Given the decreasing barriers for individuals seeking to enter the cultural supply chain, it is unsurprising that the number of unincorporated firms has grown significantly over time. It is less expected for the number of incorporated firms to stagnate. Chart 2 digs deeper into changes among active incorporated firms by disaggregating them by supply chain stage and region. Each subchart shows the percentage of each region’s active incorporated firms engaged in that supply chain stage over time. For example, the chart labelled “Creation” reveals that higher proportions of firms in the Prairie provinces and British Columbia are in the creation stage of the supply chain. In terms of changes over time, regions exhibit similar patterns, with the percentage of firms in the creation stage rising and that of firms in the manufacturing and distribution stages falling. Thus, while there was a lack of growth among incorporated firms during the study period, there is evidence of firm turnover resulting in changes in industry composition.

Data table for Chart 2
Data Table for Chart 2 Table summary
The information is grouped by Supply chain activity and region (appearing as row headers), 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using percent units of measure (appearing as column headers).
Supply chain activity and region 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
percent
Source: Statistics Canada, authors’ calculations.
Creation  
Atlantic provinces 16.7 17.4 17.5 17.8 18.2 18.4 18.2 17.6 17.9 19.1 19.7 19.9 19.5
Quebec 21.3 22.0 22.3 23.1 23.6 24.1 24.2 24.4 24.1 24.9 25.2 25.7 26.2
Ontario 27.4 27.8 27.9 28.4 29.0 29.1 29.4 29.7 30.1 31.0 31.5 31.8 32.6
Prairie provinces 32.7 32.8 33.2 33.9 34.5 35.2 35.7 35.3 34.4 34.6 34.5 34.2 34.4
British Columbia 33.4 34.1 33.9 34.4 34.3 34.3 34.0 34.0 33.8 35.3 35.7 35.6 36.2
Production  
Atlantic provinces 40.3 40.1 39.7 40.0 40.1 40.6 40.6 40.7 40.7 37.7 38.5 38.0 37.8
Quebec 46.2 46.2 46.2 46.2 46.3 46.0 45.9 46.6 46.8 46.0 46.1 46.3 46.3
Ontario 37.9 38.1 38.5 38.7 38.9 39.5 39.8 40.1 40.4 39.6 39.7 39.8 40.2
Prairie provinces 31.5 31.8 31.7 31.3 31.3 31.3 31.0 31.3 32.2 31.4 31.5 32.1 32.6
British Columbia 34.6 34.6 35.0 35.2 35.9 36.3 36.9 37.7 38.2 37.2 37.3 38.1 38.7
Manufacturing  
Atlantic provinces 7.9 7.6 7.3 6.9 6.5 5.9 5.9 6.0 6.1 5.9 5.6 5.9 6.3
Quebec 10.7 10.4 10.0 9.5 9.4 9.3 9.1 9.0 9.1 9.0 8.7 8.4 8.2
Ontario 11.6 11.3 10.9 10.5 9.9 9.6 9.2 9.1 8.6 8.5 8.3 8.1 8.1
Prairie provinces 7.4 7.3 7.1 6.9 6.5 6.4 6.2 6.2 6.3 6.3 6.4 6.3 6.3
British Columbia 8.1 7.7 7.7 7.4 7.2 7.0 6.8 6.6 6.4 6.4 6.1 6.1 6.1
Distribution  
Atlantic provinces 18.5 17.8 17.8 17.5 17.2 17.2 17.0 16.9 16.2 16.9 15.8 15.4 15.6
Quebec 16.0 15.5 15.5 15.0 14.6 14.4 14.4 13.8 13.6 13.8 13.7 13.3 13.6
Ontario 13.7 13.3 13.0 12.7 12.4 12.0 12.0 11.7 11.6 11.4 11.0 10.9 10.7
Prairie provinces 15.5 15.1 14.8 14.6 14.4 13.9 13.5 13.4 13.2 13.3 13.2 12.7 13.4
British Columbia 14.5 14.3 13.7 13.2 12.8 12.5 12.4 12.0 11.8 11.4 11.4 10.9 10.6
Support  
Atlantic provinces 2.1 2.3 2.3 2.5 2.6 2.6 3.0 3.0 2.8 3.1 3.2 3.2 2.8
Quebec 2.1 2.1 2.1 2.1 2.1 2.1 2.2 2.1 2.2 2.0 2.0 2.1 2.2
Ontario 2.5 2.6 2.7 2.7 2.8 2.9 3.0 2.9 3.0 3.0 3.1 3.0 3.0
Prairie provinces 2.9 3.0 3.1 3.2 3.5 3.6 3.7 3.9 4.0 3.9 4.0 4.2 4.1
British Columbia 2.3 2.3 2.6 2.7 2.8 2.8 2.8 2.8 2.9 2.9 2.9 2.9 2.9

The composition of firms across time and geography indicates a degree of adjustment that necessitates firm entry and exit. Entry and exit are critical aspects of market economy behaviour because they allow entrants to bring new ideas to markets and for efficient firms to be replaced (Cerfis et al., 2022). Table 5 shows entry and exit rates among active incorporated firms with employees (hereafter employer firms) in the cultural supply chain versus all private sector employer firms. It reveals that from 2008 to 2020, incorporated employer firms in the cultural supply chain had lower entry rates than employer firms in the entire private sector. They also had lower exit rates, but the difference is not as great. 

Table 5
Firm dynamics of incorporated employer firms in the cultural supply chain and all private sector employer firms Table summary
This table displays the results of Firm dynamics of incorporated employer firms in the cultural supply chain and all private sector employer firms 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using rate units of measure (appearing as column headers).
  2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
rate
Note F

too unreliable to be published

Note: Data for 2017 are suppressed because of high variance.
Source: Statistics Canada, authors' calculations.
Entry rate  
Cultural firms 10.5 10.6 10.9 11.8 10.6 10.9 10.4 10.3 F too unreliable to be published 10.5 11.3 7.7
Private sector firms 13.4 13.5 13.3 13.1 12.7 12.8 12.4 12.2 12.8 12.7 14.1 11.6
Exit rate  
Cultural firms 9.4 10.2 10.6 9.6 9.6 9.8 9.8 9.8 F too unreliable to be published 10.9 10.4 16.7
Private sector firms 12.4 11.7 11.5 11.6 11.6 11.4 11.4 11.9 11.4 11.4 11.7 13.9

Given that Canadian cultural industries are shifting away from the manufacturing and distribution stages of the supply chain and toward the creation stage, differences in entry and exit rates by supply chain stage are of interest. Firms in the manufacturing and distribution stages have low entry rates, compared with other stages and with all private sector employer firms (Table 5, Chart 3). However, they also have lower exit rates than all private sector employer firms (Table 5, Chart 4). Because the exit rates slightly exceed the entry rates, the size of both stages is slowly declining over time. By contrast, firms in the creation stage of the supply chain have an exit rate that is very similar to that of the distribution stage, but the entry rate is high, allowing the size of the creation supply chain stage to grow over time. In 2020, the decrease in entry and the increase in exit were observed across all stages of the supply chain.

Data table for Chart 3
Data Table for Chart 3 Table summary
The information is grouped by Entry rates of incorporated employer firms in the cultural supply chain, by supply chain stage (appearing as row headers), 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using rate units of measure (appearing as column headers).
Entry rates of incorporated employer firms in the cultural supply chain, by supply chain stage 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
rate
Note F

too unreliable to be published

Note: Data for 2017 are suppressed because of high variance.
Source: Statistics Canada, authors’ calculations.
Creation 11.9 11.6 12.7 13.1 11.2 11.5 10.8 10.8 F too unreliable to be published 11.0 11.4 7.0
Production 12.7 13.1 12.8 14.2 13.0 13.0 13.2 12.9 F too unreliable to be published 13.0 14.4 9.1
Manufacturing 5.8 5.5 5.7 7.0 5.9 6.2 6.2 5.2 F too unreliable to be published 5.6 6.3 3.6
Distribution 8.1 8.4 9.2 10.0 8.8 10.0 8.7 8.9 F too unreliable to be published 9.5 9.8 6.3
Support 11.0 10.3 11.2 11.4 9.6 10.9 8.1 8.7 F too unreliable to be published 8.9 11.4 4.8

Data table for Chart 4
Data Table for Chart 4 Table summary
The information is grouped by Exit rates of incorporated employer firms in the cultural supply chain, by supply chain stage (appearing as row headers), 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020, calculated using rate units of measure (appearing as column headers).
Exit rates of incorporated employer firms in the cultural supply chain, by supply chain stage 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
rate
Note F

too unreliable to be published

Note: Data for 2017 are suppressed because of high variance.
Source: Statistics Canada, authors’ calculations.
Creation 9.3 10.3 10.1 9.7 9.7 9.9 10.1 10.3 F too unreliable to be published 10.3 10.0 14.2
Production 11.3 12.5 13.1 11.3 11.1 11.4 11.4 11.5 F too unreliable to be published 13.1 12.6 17.1
Manufacturing 7.6 8.2 9.4 8.2 7.7 8.5 7.2 7.4 F too unreliable to be published 8.5 8.0 11.8
Distribution 10.0 9.7 11.3 10.1 10.5 9.6 10.4 10.0 F too unreliable to be published 11.2 11.1 15.6
Support 7.3 6.5 6.9 6.6 6.4 6.6 8.2 6.4 F too unreliable to be published 8.8 8.9 14.8

Conclusion

This paper examines the evolution of firms in Canada that operate in cultural industries, analyzing the composition of firms across jurisdictions and across the cultural supply chain, and how technology may play a role in this evolution. Using firm-level data derived from Statistics Canada datasets to explore the dynamics of cultural firms from 2008 to 2020, the paper derives several key findings that contribute to a comprehensive understanding of the shifting cultural marketplace and guide future research and policy considerations.

The paper presents a comparison between unincorporated firms—typically representing smaller, entrepreneur-run businesses involved in content creation—and incorporated firms, which are typically larger and more established. The number of unincorporated firms is significantly larger than the number of incorporated firms, with the difference rising over time. This trend appears to align with increasing opportunities for the business models of smaller firms to grow rapidly as new technologies lower their costs and expand their market sizes. Over the course of the period observed, there was also a shift in the composition of the number of cultural firms toward those primarily engaged in creation and production and away from those primarily engaged in manufacturing, distribution and support. Like the rise in unincorporated firms, the shift towards creation and production is consistent with a rise in small content creators and artists who are able to manufacture and distribute their work without the use of traditional publishers or distributors.    

At the onset of the pandemic in 2020, the decrease in unincorporated firms was lower than that in incorporated firms (a decline of 3.6% compared with one of 8.6%), and unincorporated firms in the manufacturing sector were the only group to experience an increase in number. In the same year, incorporated employer firms experienced a sharp rise in the exit rate that was more severe than the increase for all private sector employer firms, suggesting that incorporated cultural firms were more affected by the onset of the pandemic, relative to incorporated firms in other industries.

Appendix

Appendix Table A.1
Canadian Framework for Culture Statistics groupings, centrality, supply chain stage and inclusion in analysis Table summary
The information is grouped by CFCS domain (appearing as row headers), , calculated using (appearing as column headers).
CFCS domain CFCS subdomain Centrality Grouped NAICS 2017 codes Supply chain stage Included in or excluded from analysis
Notes: CFCS = Canadian Framework for Culture Statistics; NAICS = North American Industry Classification System. Groupings are decided by the authors and are based on the CFCS.
Source: Statistics Canada, authors' tabulations.
Heritage and libraries Archives Core 519122 Production Included
Heritage and libraries Libraries Core 519121 Production Included
Heritage and libraries Cultural heritage Core 712111 Production Included
Heritage and libraries Cultural heritage Core 712115 Production Included
Heritage and libraries Cultural heritage Core 712119 Production Included
Heritage and libraries Cultural heritage Core 71212 Production Included
Heritage and libraries Natural heritage Core 71213 Production Included
Heritage and libraries Natural heritage Core 71219 Production Included
Live performance Performing arts Core 711111 Production Included
Live performance Performing arts Core 711112 Production Included
Live performance Performing arts Core 71112 Production Included
Live performance Performing arts Core 71113 Creation Included
Live performance Performing arts Core 71119 Production Included
Live performance Performing arts Core 711311 Production Included
Live performance Performing arts Core 711321 Production Included
Live performance Performing arts Core 711512 Creation Included
Live performance Festivals and celebrations Core 711322 Production Included
Visual and applied arts Original visual art Core 45392 Distribution Included
Visual and applied arts Original visual art Core 711511 Creation Included
Visual and applied arts Art reproductions Core 442292 Distribution Included
Visual and applied arts Photography Ancillary 51919 Distribution Included
Visual and applied arts Photography Ancillary 54192 Production Included
Visual and applied arts Photography Ancillary 812921 Production Included
Visual and applied arts Photography Ancillary 812922 Production Included
Visual and applied arts Crafts Core 313 Manufacturing Excluded
Visual and applied arts Crafts Core 314 Manufacturing Excluded
Visual and applied arts Crafts Core 315 Manufacturing Excluded
Visual and applied arts Crafts Core 316 Manufacturing Excluded
Visual and applied arts Crafts Core 321 Manufacturing Excluded
Visual and applied arts Crafts Core 323113 Manufacturing Included
Visual and applied arts Crafts Core 327 Manufacturing Excluded
Visual and applied arts Crafts Core 332 Manufacturing Excluded
Visual and applied arts Crafts Core 337 Manufacturing Excluded
Visual and applied arts Crafts Core 339 Manufacturing Excluded
Visual and applied arts Crafts Core 4143 Manufacturing Excluded
Visual and applied arts Crafts Core 41441 Distribution Excluded
Visual and applied arts Crafts Core 4483 Distribution Excluded
Visual and applied arts Crafts Core 45322 Distribution Excluded
Visual and applied arts Advertising Ancillary 54181 Production Included
Visual and applied arts Advertising Ancillary 54185 Production Included
Visual and applied arts Advertising Ancillary 54186 Production Included
Visual and applied arts Advertising Ancillary 541891 Production Included
Visual and applied arts Advertising Ancillary 541899 Distribution Included
Visual and applied arts Architecture Ancillary 54131 Creation Included
Visual and applied arts Architecture Ancillary 54132 Creation Included
Visual and applied arts Architecture Ancillary 54134 Creation Included
Visual and applied arts Design Ancillary 54141 Creation Included
Visual and applied arts Design Ancillary 54142 Creation Excluded
Visual and applied arts Design Ancillary 54143 Creation Included
Visual and applied arts Design Ancillary 54149 Creation Excluded
Visual and applied arts Design Ancillary 54151 Creation Excluded
Written and published works Books Core 51113 Production Included
Written and published works Periodicals Core 51112 Production Included
Written and published works Newspapers Ancillary 51111 Production Included
Written and published works Newspapers Ancillary 51911 Production Included
Written and published works Other published works Core 51119 Production Included
Written and published works Collected information Ancillary 51114 Production Excluded
Written and published works Unallocated Core 323119 Manufacturing Included
Written and published works Unallocated Core 32312 Manufacturing Included
Written and published works Unallocated Core 41442 Distribution Included
Written and published works Unallocated Core 41912 Distribution Excluded
Written and published works Unallocated Core 45121 and 45131 Distribution Included
Written and published works Unallocated Ancillary 54193 Production Included
Written and published works Unallocated Core 711513 Creation Included
Audio-visual and interactive media Film and video Core 41445 Distribution Included
Audio-visual and interactive media Film and video Core 51211 Production Included
Audio-visual and interactive media Film and video Core 51212 Distribution Included
Audio-visual and interactive media Film and video Core 51213 Distribution Included
Audio-visual and interactive media Film and video Core 51219 Manufacturing Included
Audio-visual and interactive media Film and video Core 53223 and 53228 and 53229 Distribution Excluded
Audio-visual and interactive media Broadcasting Core 51511 Production Included
Audio-visual and interactive media Broadcasting Core 51512 Production Included
Audio-visual and interactive media Broadcasting Core 51521 Production Included
Audio-visual and interactive media Broadcasting Core 517112 and 517310 Distribution Excluded
Audio-visual and interactive media Interactive media Core 45112 Distribution Included
Audio-visual and interactive media Interactive media Core 51121 Distribution Excluded
Sound recording Sound recording Core 41444 Distribution Included
Sound recording Sound recording Core 45122 and 443146 Distribution Included
Sound recording Sound recording Core 51221 and 51222 and 51225 Production Included
Sound recording Sound recording Core 51224 Production Included
Sound recording Sound recording Core 51229 Production Included
Sound recording Music publishing Core 45114 Distribution Included
Sound recording Music publishing Core 51223 Distribution Included
Education and training Education and training Transversal 61111 Support Excluded
Education and training Education and training Transversal 61121 Support Excluded
Education and training Education and training Transversal 61131 Support Excluded
Education and training Education and training Transversal 61151 Support Excluded
Education and training Education and training Transversal 61161 Support Included
Governance, funding and professional support Governance, funding and professional support Transversal 526989 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 71141 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81321 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81331 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81341 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81391 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81392 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81393 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 81399 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 91124 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 91191 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 91291 Support Excluded
Governance, funding and professional support Governance, funding and professional support Transversal 91391 Support Excluded
Multidomain Multidomain Core 33461 Manufacturing Excluded
Multidomain Multidomain Ancillary 51913 Distribution Excluded
Multidomain Multidomain Core 53311 Support Excluded
Multidomain Multidomain Core 56192 Distribution Excluded

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