Data and definitions

Box 1  The firms

The data on firms were taken from Statistics Canada's Business Register. The Business Register comprises a list of all active businesses in Canada that have a corporate income tax (T2) account or are an employer or have a GST account with an annual gross business income of over $30,000. This paper excludes establishments that do not maintain an employee payroll even though these establishments may have a workforce of contracted workers, family members or business owners. This was done because the Business Register does not ascribe a size (in terms of employee numbers) to these establishments. This action also means that the self-employed who do not have any employees are excluded from this study.

Size of firm

Firms are divided into size categories according to the number of persons they employ. The number of employees is estimated from data on payroll remittances and the estimated number of employees is reported in terms of "full-time equivalents." This is the approximate number of employees if each employee worked a full-year. For instance, 10 full-time equivalents could represent 20 employees who each worked for half a year, or any similar combination. The Business Register makes this calculation by dividing the amount of the total payroll by the average pay of the employees.  

Industry sector

Firms are divided into industry sectors according to their activities. The sectors are based on the 2007 version of the North American Industry Classification System (NAICS).

In this paper, some of the sectors portrayed are created by combining other sectors:

Primary – comprises "Agriculture, Forestry, Fishing and Hunting (NAICS code 11)" and "Mining, Quarrying and Oil and Gas Extraction (NAICS code 21)."

Construction (NAICS code 23).

Manufacturing (NAICS code 31 to 33).

Distributive Services – comprises "Utilities (NAICS code 22)," "Wholesale Trade (NAICS code 41)," "Retail Trade (NAICS code 44 to 45)," "Transportation and Warehousing (NAICS code 48 to 49)," and "Information and Cultural Industries (NAICS code 51)."  

Producer Services – comprises "Finance and Insurance (NAICS code 52)," "Real Estate and Rental and Leasing (NAICS code 53)," "Professional, Scientific and Technical Services (NAICS code 54)," "Management of Companies and Enterprises (NAICS code 55)" and "Administrative and Support, Waste Management and Remediation Services (NAICS code 56)."

Social and Personal Services – comprises "Educational Services (NAICS code 61)," "Health Care and Social Assistance (NAICS code 62)," "Arts, Entertainment and Recreation (NAICS code 71)," "Accommodation and Food Services (NAICS code 72)," "Other Services (except Public Administration) (NAICS code 81)" and "Public Administration (NAICS code 91)."

Box 2  The geography

The geographical concept of Rural and Small Town Canada is defined as labour market areas which are outside the commuting zones of larger urban centres with core populations of 10,000 or more. Rural and Small Town Canada Analysis bulletins address issues of interest to rural Canada such as employment trends, education levels, health status, Internet usage and number of firms by type, among others.

As discussed in Puderer (2009) and du Plessis et al. (2001), there are numerous possible operational definitions of urban and rural areas, of which the one used in this paper is only one.

Larger urban centres

Comprise both census metropolitan areas (CMAs) and census agglomerations (CAs)

A census metropolitan area (CMA) has an urban core with a population of at least 50,000 and a total population of 100,000 and over.

A census agglomeration (CA) has a population of 10,000 to 99,999.
Both CMAs and CAs include all neighbouring municipalities where 50% or more of the workforce commutes to the urban core.

Rural and small town ( RST ) areas

Comprise towns or municipalities outside CMAs and CAs. These RST areas are disaggregated into four census metropolitan area and census agglomeration influenced zones (MIZ) based on the size of commuting flows of the labour force to any CMA or CA. The Strong MIZ category comprises areas where 30% or more of the labour force commute to a larger urban centre. The Moderate MIZ category comprises areas where between 5% and 30% of the labour force commute to a larger urban centre. The Weak MIZ category comprises areas with a commuting flow of more than 0% and less than 5%. The No MIZ category comprises those areas where no individuals commute to a CMA/CA. For further information on MIZ see McNiven et al. (2000).

It should be noted that because the RST areas in the three Territories are classified solely as "Non-CMA/CA Territories," with no disaggregation into MIZs, businesses located in Yukon, Northwest Territories and Nunavut are excluded from this study.

The strength of commuting flows between rural areas and urban centres serve as a proxy for the degree of economic and social linkages a rural area has with a larger urban centre.

Box 3  Resource-extraction versus a service centre: A tale of two communities

Among all the different types of communities found within Weak MIZ in Canada, there are essentially two extremes in terms of business establishments and employment opportunities.  There is the 'traditional' rural community with a single major firm, usually exploiting a raw material, upon which the community relies for the bulk of its employment.  At the other extreme, there is the rural community that acts as a regional service centre and which contains a diverse mix of business establishments.  These regional service centres exploit their distance from urban centres by attracting rural residents who will be prepared to travel some distance to make use of the services that are offered but for whom the nearest urban centre is simply too far away.

A traditional community in a Weak Metropolitan Influenced Zone: Dubreuilville , Ontario

Dubreuilville is a community located in Northern Ontario that recorded a population of just below 800 in the 2006 Census of Population.  As the name of the community might suggest, the majority (630) of the inhabitants of Dubreuilville recorded French as their mother tongue. Among the 625 that were 15 years of age or older, 10 had a university degree, certificate or diploma. The unemployment rate stood at 8.9% at the time of the 2006 Census of Population.

While Dubreuilville had 27 firms with payroll employees in 2007, there was only one that had 200 or more employees.  This firm was in the wood product manufacturing industry sector (NAICS code 321). There were two firms that had between 50 and 199 employees, one in the forestry and logging industry sector (NAICS code 113) and one in the truck transportation industry sector (NAICS code 484). All the rest of the firms had less than 50 employees with the majority (17) being firms with 1 to 4 employees. The extent of the specialization of this community can be judged from the employment by industry type. Dubreuilville recorded 450 individuals aged 15 and over in the labour force.  Of these 450, 25 were employed in retail and wholesale trade and 40 employed in business services. Nearby towns for shopping are about one hour away (Wawa or White River).

A regional service centre in a Weak Metropolitan Influenzed Zone: Woodstock, New Brunswick

The New Brunswick community of Woodstock recorded a population of a little over 5,000 in the 2006 Census of Population.  Among the 4,140 that were 15 years of age or older, 655 had a university degree, certificate or diploma while a further 125 had a certificate or diploma below the bachelor level.  The unemployment rate stood at 7% at the time of the 2006 Census of Population.

Woodstock had 323 firms with payroll employees in 2007.  There was one large firm with over 200 employees (in the hospitals industry sector (NAICS code 622)), but a further 24 had between 50 and 199 employees and 128 had 5 to 49 employees.  There were 170 firms with 1 to 4 employees.  The firms represented a diversity of industry sectors, including primary sector activity, manufacturing and retail and wholesale trade.  Service sector activity was particularly well represented. Among the 24 firms with 50 to 199 employees, two were in the management of companies and enterprises sector (NAICS code 551), one in waste management and remediation services (NAICS code 562) and four were in the food services and drinking places sector (NAICS code 722).

The diversity of firms is reflected in Woodstock's employment statistics.  Of the 2,565 in the labour force aged 15 and over recorded in the 2006 Census of Population, 310 were in manufacturing industries, 455 in retail and wholesale trade, 445 in business services and 510 in other services.  A further 505 were in health care and social services and educational services.