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2008
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Section 8: Business and industry statistics
Retail sales
In 2006, retailers sold $389.6 billion worth of goods and services, up +6.4% from 2005 and this represents the highest growth rate since 1997. Although all provinces and territories reported increased retail trade, retailers in Alberta led the way with an impressive 15.6% increase in sales, the highest increase ever recorded. This marked the third consecutive year that Alberta's growth rate led the nation (11.8% in 2005 and 7.7% in 2004). Newfoundland and Labrador (+3.7%) recorded the lowest growth rate in retail sales in 2006 (table 8.3 and chart 8.1).
Nationwide, four of the eighteen trade groups reported double-digit growth rates in 2006, and of these groups, two were related to the housing sector. Canada’s ongoing housing boom, higher levels of disposable income, and other factors kept things busy for home hardware and home furnishing retailers. With a growth rate of 13.9%, home furnishing stores made sales of $5.3 billion (from $4.7 billion in 2005) and this group was the fastest growing trade group of 2006. Provincially, home furnishing stores in Alberta recorded the biggest increase in sales (+35%) followed by those in New Brunswick (+25.8%) (table 8.5). Similarly, home centres and hardware stores nationwide reported retail sales of $20.1 billion (+10.5%) (table 8.5).
Used and recreational motor vehicle and parts dealers recorded the second highest growth rate (+13.6%, up from 5.5% in 2005) with sales rising to about $17.4 billion from about $15.3 billion in 2005. This impressive growth was mainly driven by strong sales of recreational vehicles in 2006 and represented the group's strongest growth rate since 1994, the earliest year of data availability (table 8.5).
Pharmacies and personal care stores almost tripled the growth rate of their sales from 2005 to 2006. The value of sales in these stores grew by +10.3% to about $26 billion in 2006, representing the fastest growth rate since 1994 (table 8.5) and almost triple the +3.8% increase experienced from 2004 to 2005.
New motor vehicle sales
In 2006, sales of new motor vehicle recorded their second best year, as consumers in Canada drove off the lot with 1.67 million (+2.2) new cars and trucks. These purchases amounted to a total value of $54.3 billion (+3.9%) and the average price of a new motor vehicle edged up slightly up by +1.6% from the previous year, to $32, 609 in 2006 (table 8.7).
Powered by an impressive growth in the number of motor vehicles, especially trucks sold in that province, Alberta (+15.5%) recorded the largest increase in the retail value of motor vehicles in Canada (table 8.6).
In the rest of Canada, only New Brunswick (+5.7%) and British Columbia (+7.5%) recorded growth rates that were higher than the Canadian average rate (table 8.6). Although Ontario and Quebec together accounted for about 60% of the retail value of new motor vehicles sold in Canada in 2006 (table 8.6), the total value of sales of new motor vehicles in those provinces grew by only +0.6% and +0.8% respectively over the previous year’s figures (table 8.6).
Accommodation services
The number of establishments in the Accommodation services industry increased by +7.5%, from 15,463 in 2004 to 16,630 in 2005 (table 8.11). This industry registered an 8.2% increase in its operating revenue (from $13.2 billion to $14.3 billion) (table 8.12 and chart 8.2). This can be mainly attributed to increased spending by Canadian tourists on accommodations. Operating revenues in Hotels, motel hotels, and motels, which accounted for about 87% of the industry total, grew +7.9% in 2005 to $12.4 billion, while revenue accruing to other types of accommodations providers (which represented the remaining 13%) grew by +10.2% to about $1.9 billion (table 8.12).
The accommodation services industry in British Columbia experienced the largest growth in its operating revenue, +13.7% (from about $2.6 billion to about $2.9 billion) (table 8.12 and chart 8.2). Accommodation services establishments in Alberta recorded the highest average operating revenue of about $1.4 million, while Newfoundland and Labrador recorded the lowest average revenue in the industry ($378,000) (tables 8.11 and 8.12).
Computer systems design and related services
The Computer Systems Design and Related services industry recorded a (4.1%) increase in its operating revenue from $20.7 billion to $21.6 billion in 2005 (tables 8.13 and 8.22). The provinces posting the largest year-over-year percentage gains in operating revenue were Nova Scotia (+15.5%), New Brunswick (+10.5%) and British Columbia (+17.9%). Ontario, which accounts for just over-half of combined industry revenues, and Quebec, which accounts for one-fifth of industry revenues, both edged up +2.4% and +4.7% respectively (table 8.22). This industry posted a profit margin of 7.6%, allowing it to record a profit of about $1.6 billion (table 8.13 and 8.22).
The number of active establishments in the Computer Systems Design and Related service industry decreased from 51,230 to 47,479 (-7.3%). Primarily, Ontario saw the biggest decline in the numbers of Computer systems design establishments (-2,301) (tables 8.13 and 8.22).
Although overall, the number of establishments in this industry dropped, the cost of salaries, wages and benefits increased by 1.1% (from about $9.1 billion to $9.2 billion). Nova Scotia (+32.6%) and British Columbia (25.1%) recorded the largest year to year percentage increase in the salaries, wages and benefits of employees in the computer systems design and related services industry (table 8.13).
Business enterprise expenditure on research and development (BERD)
Business enterprises expenditure on research and development (BERD) remained constant at about $15.4 billion in 2006. Manufacturing industries continued to account for the most significant portion of the intra-mural expenditure on research and development (R&D) (about 53%) while Services (42%), Mining and Oil and Gas extraction, Agriculture, Forestry, fishing and hunting, Utilities and construction accounted for the rest of the expenditures (table 8.32-1).
In the past, the role of R&D and innovation in service industries was underappreciated and consequently it was argued that service sector firms are less likely to initiate research projects and mainly rely on technologically sophisticated suppliers for technology (Pavitt, 1987). 1 However, after having made their mark on the economic landscape, services are now coming of age in the field of technology. Miozzo and Soete (2000) 2 propound that some service sector firms are increasingly becoming significant R&D performers and that there are multiple patterns of innovation in services.
Evidently, in the past decade, the service sector in Canada has been increasing its expenditure on R&D. This is apparent in the fact that this sector’s share of total intramural R&D expenditure has grown from 29.5% in 1996 to 42% in 2006 (table 8.32-1 and chart 8.3). The increased tradability of services, growing complementarity between goods and services, and trend towards the globalization of product and factor markets have all pressurized service firms to increase their investments in R&D. The growth in service sector R&D performance between 1996 and 2006 can be mainly attributed to increased R&D performance in three industries, Information and cultural industries, Computer systems design and related services, and Scientific research and development services. While service industries increased their share of total R&D expenditure between 1996 and 2006, R&D expenditure by manufacturing firms as a proportion of total intramural expenditure decreased from about 64% to 53% over the same period (table 8.32-1 and chart 8.3).
Engineering services
In 2005, the number of engineering services providing establishments in Canada increased by +5% (from 20,723 to 21,753). Alberta witnessed the biggest increase (+20%) in the number of engineering services firms (5,337 to 6,416 in 2005) (table 8.26).
Correspondingly, nationally, this industry recorded a +13.5% increase in its operating revenue (from $12.1 billion in 2004 to about $13.8 billion in 2005). Business investments in the surging resource sector, particularly in Western Canada, were a major factor contributing to this strong expansion. The continuing upturn boosted the industry's operating profit margin to 13.6%, compared with 11.6% in 2004 (tables 8.15 and 8.26).
In recent years, the industry's activities have shifted somewhat from Ontario to Alberta. The industry's revenues grew by +21% in Alberta. Firms in Saskatchewan (+38%) and British Columbia (+27%) also far outpaced the national average in 2005. Meanwhile, firms in Ontario, unable to sustain their growth of 2004, recorded a modest revenue gain of +2% (tables 8.15 and 8.26). Despite the small growth, engineering service firms operating in Ontario earned 30% of the industry's 2005 revenues. Other significant market shares were recorded in Alberta (26%), Quebec (22%) and British Columbia (14%) (tables 8.14, 8.15, and 8.26).
Manufacturing
The number of manufacturing establishments decreased by 0.2% from 2004 to 2005 (from 32,657 to 32,582). Nevertheless, revenue from manufactured goods increased by +2.1% (from $572 billion to about $584 billion). This marked the second year in a row that revenue from goods manufactured increased, however the growth rate is lower than the +5.6% reported in 2004 (tables 8.18 and 8.19). The largest increases in revenues were experienced in the Petroleum and coal products manufacturing industry (+21.9% or +$10 billion), Fabricated Metal Product manufacturing (+6.4%), Machinery manufacturing (+6%) and Primary metal manufacturing (+3.8%). However, these increases were offset by revenue declines in clothing manufacturing (-17.5%), textile mills (-10.1%), Computer and electronic product manufacturing (-9.1%), and paper manufacturing (-4.1%) (table 8.19).
Alberta experienced the largest increase in revenues from manufactured goods (+14.4%) (from about $53 billion to $60 billion in 2005) while Ontario and Quebec (whose manufacturing industries account for 51% and 23% of total revenues from goods manufactured respectively) registered growth rates of +0% and +1.9% respectively (table 8.18).
From 2004 to 2005, manufacturing industries in Alberta saw the largest increase in employment (+7,306 employees or +5.9%). During the same period, the most significant decline in numerical employment was recorded in Quebec (-11,269 employees or -2.4%), marking the fifth consecutive year of decline in employment in this industry in that province (table 8.18 and chart 8.4).
The waste management industry
The Waste Management industry provides a comprehensive range of services: the collection and transportation of waste and materials destined for recycling (including composting) or reuse; the operation of non-hazardous and hazardous waste disposal facilities; the operation of transfer stations; the operation of recycling facilities; and the treatment of hazardous waste.
In 2004, expenditure on waste management services by municipal governments increased to about $1.9 billion (+24.1%) compared to $1.5 billion recorded in 2002. Expenditure by the business sector on waste management also increased by +11.6% to about $3.8 billion. About 33.2 million tonnes of solid waste was produced in Canada in 2004, translating to just over 1 tonne (compared to 971 kg in 2002) per person on average. Ontario and Quebec accounted for about 64% of total solid waste produced in that year (table 8.34).
Of the total amount of waste produced, about $7.2 million tonnes were non-hazardous waste that was prepared for recycling by local waste management organizations and companies. In 2004, for all of the provinces for which data is available, there was an increase in the amount of non-hazardous waste that was recycled except in Newfoundland and Labrador (-8%), Manitoba (-6.5%) and Saskatchewan (-9.4%) (table 8.34).
Growth of innovative biotechnology firms
Around the world, many governments are increasingly viewing biotechnology as a potential new growth industry. There is a growing realization that this industry has the potential to boost economic growth, enhance society’s ability to cure serious diseases, and improve quality of life. Consequently, investment in biotechnology activities has increased significantly. Biotechnology related to human health remained the most significant biotechnology sector in terms of number of firms, employment, R&D and revenues.
An innovative biotechnology firm is a firm that uses biotechnology for the purpose of developing new products or processes. In 2005, the number of innovative biotechnology firms in Canada grew to 532 from 490 (in 2003,) an increase of +9%, however, this growth rate was lower than the +31% increase recorded between 2001 and 2003 (from 375 to 490 firms) (table 8.37).
Three-quarters of all biotechnology companies were small firms, that is, they had fewer than 50 employees. Large biotech companies, those with at least 150 employees, represented only 10% of the 532 biotech firms in 2005 (table 8.37).
More than 75% of the innovative biotechnology firms were in three provinces: Quebec, Ontario and British Columbia (table 8.37). These provinces continue to comprise the bulk of Canadian biotechnology activity, accounting for more than 90% of biotechnology revenues in 2005. Ontario firms led the way in biotechnology revenues, R&D expenditures and employment, whereas those in Quebec accounted for the largest share of biotechnology firms.
