Most powerful driver of Canadian economic growth to benefit from improved data and better-informed policy
TORONTO, Sept. 10, 2019 /CNW/ - New research has confirmed that family-owned businesses have a significant impact on Canada's economy. From the corner coffee shop to the home builder and the local manufacturer, from the farmer and the fish processor to the commercial real estate developer – family enterprises generated almost half of Canada's private sector GDP and almost seven million jobs in 2017. However, improved data, informed public policies and better advisory services are needed to help these businesses reach their full economic potential, drive regional growth and lead Canada's economy to a more prosperous future.
The Family Enterprise Xchange Foundation (FEX-F) partnered with the Conference Board of Canada to study the economic weight, regional impact, industry presence and business performance of family-owned enterprises. Summarized in a white paper, Family Enterprise Matters: Harnessing the Most Powerful Driver of Economic Growth in Canada, the research provides the most comprehensive picture of family enterprises in Canada to date. It also reveals new data and insights showing how family enterprises are significant and influential contributors to industries such as agriculture, accommodations, food services, fisheries and retail, as well as in industrial and resource sectors, such as construction, mining, manufacturing and transportation.
"Rooted in communities across our diverse geography, successful family enterprises can sustain a multigenerational commitment to job creation and to the social cohesion that builds community and national prosperity," said Jim Burton, Chair, FEX-F. "In many Canadian communities, family enterprises are the biggest employers, particularly in small communities. Yet demographics, unintended consequences of tax policy, and a lack of trained advisors are threatening the continuity of family enterprise."
Family businesses seen as backbone of Canadian economy and account for almost half of private sector employment
Other facts cited in the research include:
- Family enterprises account for 63.1 per cent of all private sector firms in Canada
- Family enterprises generate 46.9 per cent of private sector employment
- Family-owned enterprises account for approximately 65 per cent of the output and 90 per cent of the jobs generated by small and medium-sized companies (which are frequently described as the backbone of the Canadian economy)
- Family-owned firms perform better on some important business metrics, such as longevity – 70.1 per cent of family-owned enterprises in operation in 2007 were still in operation in 2013, compared with just 65.2 per cent of other firms
"This first-of-its kind study in Canada highlights the crucial role family enterprises play in our economy as well as the need for more in-depth data to be collected," said Michael Bassett, Director, Research Impact and Content Strategy, The Conference Board of Canada. "The research clearly shows that family-owned businesses exhibit characteristics that are different than non-family-owned. Given demographic trends and the looming succession of many family enterprises, the data gaps in our understanding of this important part of the economy are worrying because policy makers are largely in the dark regarding an important driver of the Canadian economy."
Despite generating almost half of Canada's real GDP in the private sector, the full picture of the economic influence of family-owned enterprises is not clear. In Canada, significant data gaps remain in creating policies that maximize the value of family-owned enterprises to regional economies, strategic industrial sectors and community wellbeing.
"Family Enterprise Xchange Foundation believes passionately that Canada's economic future can be made stronger by empowering and inspiring family enterprises to greater heights so they can have an even more substantial impact on Canada – enriching our culture, reflecting our values and powering our economy," explained Burton. "Improved access to empirical evidence and advisory services will help these businesses reach their full economic potential, leading Canada into a more prosperous future."
About FEX Foundation
The Family Enterprise Xchange Foundation (FEX-F) promotes and supports the growth, continuity and global competitiveness of family-owned enterprises. The organization is dedicated to empowering enterprising families and their advisors. FEX-F provides business-owning families and their advisors with a unique blend of shared wisdom and experience, and the world's best, leading-edge thinking and knowledge.
About The Conference Board of Canada
The Conference Board of Canada equips leaders and decision-makers with the economic reports, research, data, networks, and events they need to solve our country's most pressing challenges. We are non-partisan, evidence-based, and stand at the intersection of research, policy, and business - where insights meet impact.
SOURCE Family Enterprise Xchange
For further information: Aby Bueno, Broad Reach Communications, [email protected], 416-858-3135