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Canada’s High-Growth Firms are the Greatest Contributors to Employment Growth

Canada’s High-Growth Firms are the Greatest Contributors to Employment Growth

Canadian economic development professionals now have fresh data on the disproportionately large contribution to net employment growth made by a limited number of high-growth firms, according to a new study.

The study by Innovation, Science and Economic Development Canada indicates that the high-growth firms that generated the most net employment growth were young, relatively small, and involved in a wide range sectors.

For the first time, Statistics Canada data that adopts the US Bureau of Labor Statistics definition of high-growth firms is being used.  The use of comparable data is important to policy makers and economic developers focused on identifying high-growth firms and crafting initiatives that will support their growth.  The study looks at net employment change in Canada from 2009 to 2012 by firm, age, size and sector (

What defines a high-growth firm?

  • Firms with 10+ employees in 2009 that grew employment by an average annualized rate of 20%+ between 2009 and 2012; and
  • Firms with fewer than 10 employees in 2009 that grew by 8 or more employees by 2012.

These high-growth firms represented 1.24% of all firms.

What contribution did they make?  The high-growth firms accounted for 63% of net employment growth from 2009 to 2012.

What were the sectors with the highest contributions to total net employment change?  The growth occurred surprisingly uniformly across most sectors.  Interestingly, information and communications technology was not among the most prominent.  Construction had the highest contribution to the total net employment change at 8%, followed by professional, scientific and technical services (7%); administrative and support, waste management and remediation services (7%); accommodation and food services (6%); retail trade (6%); and manufacturing (6%).