Most Canadian small business owners would rather remain small than keep growing their businesses, according to a report by CIBC World Markets.

“It turns out that most Canadian small business owners have no interest in turning their cottage industry operation into a multi-national conglomerate,” says Benjamin Tal, a senior economist with CIBC World Markets and author of its Small Business in Canada report. “The majority of small business owners consider themselves ‘lifestylers’ that use their businesses to generate income while balancing other commitments or lifestyle choices.”

This reality, according to Tal, needs to be factored into government thinking. “Traditional policy objectives have been aimed at helping small businesses grow. The fact is, nearly 60% of small business owners in Canada are content to stay small, a factor largely ignored by policy makers.”

This percentage is likely to increase as the number of small enterprises run by older Canadians continues to grow. ‘Seniorpreneurs’ now comprise a record high 25% of the self-employed in Canada. This number has jumped 35% since 2001 and is by far the fastest growing segment in the small business sector. Seniorpreneurs currently constitute more than 30% of the total workforce over the age of 55.

In 2005, small business activity grew by 3.7% (annualized) outpacing the national economy as a whole.

CIBC World Markets says the economic out-performance of small business in recent years reflects the fact that small firms were less damaged by the rise in the Canadian dollar when compared to large companies.

One in four small firms in Canada are in sectors directly impacted by a strong dollar. Entrepreneurs in Ontario are the most sensitive to movements in the dollar, while Newfoundland & Labrador business owners are the least impacted.

Since the early 1990s, self-employment among older women outpaced growth among older men, with the gap widening significantly in recent years. Regionally, the fastest increase in business creation among the greying entrepreneurs was in Western Canada, with British Columbia leading the way, closely followed by Alberta.

The West led in overall small business growth while Atlantic Canada and Ontario lagged behind. By city, the fastest pace of small business formation between 2003 and 2005 was in Vancouver, followed by St. John’s, Victoria and Calgary.

Recent months have seen a noticeable decline in the number of self-employed, with a 3% decrease since the beginning of the year. This is a positive development since the strong labour market performance of recent years has allowed those forced into self-employment (due to lack of alternatives) to find more suitable paid-employment jobs. It also means the existing pool of self-employed is of a higher ‘quality’ since, a larger proportion of the self-employed are in business by choice rather than necessity.

The CIBC World Markets Small Business in Canada report is available at http://research.cibcwm.com/economic_public/download/09112006_sbtt.pdf.