A Perspective on the Characteristics of SMEs in Atlantic Canada
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1 A Perspective on the Characteristics of SMEs in Atlantic Canada 10 th OECD Rural Development Conference, Memphis, TN May 20 th, Alvin Simms Jamie Ward Dept. of Geography, Harris Centre RANLab St. John s, NL Canada
2 Atlantic Provinces Newfoundland & Labrador New Brunswick Prince Edward Island Nova Scotia
3 Commuting Patterns Coincidence with Population Density Internal Regional Industry Supply Chain Linkages Limited potential for local economies of scale, especially in rural areas
4 SME Industry Characteristics Province Micro (1-9) Small (10-49) Medium (50-199) Large (200+) Row % % SME Total Count Newfoundland and Labrador 84.27% 13.33% 1.94% 0.47% % 99.53% Prince Edward Island 85.14% 12.64% 1.92% 0.30% % 99.70% Nova Scotia 85.98% 11.58% 2.04% 0.40% % 99.60% New Brunswick 84.89% 12.57% 2.10% 0.45% % 99.55% SME Producer Sector by Province Extract/Non-Extract Ratio Large Rural Adjacent Small Rural Adjacent Large Rural Non-adjacent Small Rural Non-adjacent Grand Total Newfoundland and Labrador Prince Edward Island N/A 2.55 Nova Scotia New Brunswick Atlantic Canada Extract/Non-Extract Ratios SME service e.g. industries in mining, oil & gas etc. are generally small intermediate inputs SME producers e.g. fishing, logging, are direct or higher level intermediate inputs to some level of processing
5 Atlantic Canada Within Region Type % Estimated Employment by SME Industry Atlantic Canada Top 10 Producer Est. Employment SMEs Large Rural Adjacent Small Rural Adjacent Large Rural Non-adjacent Small Rural Non-adjacent Region Total Construction 26.71% 16.09% 31.33% 18.75% 26.84% Salt Water Fishing CAN 7.03% 21.60% 16.24% 30.08% 15.64% Seafood Product Preparation and Packaging MEX 3.80% 15.45% 9.40% 20.41% 9.61% Other Vegetable and Melon Farming 4.44% 2.98% 2.64% 2.45% 3.26% Electrical Contractors and Other Wiring Installation Contractors 3.21% 1.09% 3.21% 1.66% 2.85% Contract Logging CAN 1.92% 3.24% 2.84% 3.35% 2.62% Sawmills (except Shingle and Shake Mills) MEX 2.37% 5.44% 1.99% 1.53% 2.18% All Other Miscellaneous Crop Farming and Aquaculture 2.34% 5.85% 0.93% 3.14% 2.02% Dairy Cattle and Milk Production 2.75% 0.98% 1.15% 1.66% 1.81% Non-Citrus Fruit and Tree Nut Farming CAN 3.20% 1.42% 0.80% 0.40% 1.61% New producer SME appearing, e.g. aerospace parts, but not enough to replace traditional industries More service SMEs than producers, e.g. private household, nursing care
6 Atlantic Canada Producer Average Income by Region Type and SME Size SME Size MICRO (1-9) SMALL (10-49) MEDIUM (50-199) Grand Total Large Rural Adjacent $31,440 $33,999 $34,899 $32,409 Large Rural Non-adjacent $32,855 $36,094 $39,692 $34,105 Small Rural Adjacent $29,639 $30,703 $34,882 $30,062 Small Rural Non-adjacent $28,674 $29,130 $28,970 $28,768 Grand Total $31,007 $33,688 $35,435 $31,911 Atlantic Canada Service Average Income by Region Type and SME Size SME Size MICRO (1-9) SMALL (10-49) MEDIUM (50-199) Grand Total Large Rural Adjacent $33,254 $31,265 $29,768 $32,627 Large Rural Non-adjacent $33,612 $32,356 $30,538 $33,183 Small Rural Adjacent $32,910 $26,088 $25,299 $31,880 Small Rural Non-adjacent $31,623 $30,052 $31,276 $31,374 Grand Total $32,918 $31,380 $30,191 $32,501
7 Challenges: Atlantic Canada % Population Change Region Type Total Population 0-15 Yrs Yrs Yrs Yrs Yrs 65+ Yrs Urban 5.24% 0.27% 2.46% 4.61% 0.15% 18.96% 14.27% Large Rural Adjacent 0.38% -7.12% -4.32% -7.61% -4.94% 16.21% 12.65% Small Rural Adjacent -5.48% % % % % 10.75% 4.45% Large Rural Non-adjacent -1.11% -8.44% -9.83% -9.25% -7.41% 16.86% 15.21% Small Rural Non-adjacent -5.99% % % % % 14.94% 11.57% During this period rural net loss was 17,000 people Population shifts to urban by youth leaves rural with a majority of older unskilled workers
8 Challenge: Seasonal Employment & Youth Retention Region Type AvgWeeksWorked % 1 to 13 weeks % 14 to 26 weeks % 27 to 39 weeks % 40 to 48 weeks % 49 to 52 weeks Urban % 8.93% 6.36% 12.27% 67.57% Large Rural Adjacent % 11.12% 7.68% 12.21% 63.33% Small Rural Adjacent % 19.93% 8.15% 13.51% 51.51% Large Rural Non-adjacent % 14.98% 7.96% 12.13% 58.00% Small Rural Non-adjacent % 30.73% 9.26% 8.98% 39.75% Summary! [1] Shift from producers to services( service employs 3.7 time more than producers) [2] The rise of construction as a dominant employer and a mobile workforce exposes rural economies to exogenous factors [3] Ageing workforce and high seasonality factors questions long term viability and sustainability of rural industries [4] Capitalization of traditional drivers of the rural economy may be a long term solution but trade-off is more volatility and higher service SME ratio [5] Traditional extraction industries are forced by provincial/federal policies to be predominately Micro (1-9) enterprises limited economies of scale
9 It s all about geography, densities and economies of scale Statistics Canada Data Sources CANSIM (National Monthly GDP) Business Register (June 2003-Dec 2013) Census of Canada (2001, 2006, and 2011 Profiles) 2011 NHS Profile Business Register (Dec 2011), Input Output Accounts (National Make and Use Tables, 2010) Local Adjustments Thank you!
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