New immigrants becoming key entrepreneurs in Canada

The higher self-employment rate among immigrants is due in part to their inability to find a good job: StatsCan

Mario Toneguzzi: New immigrants becoming key entrepreneurs in CanadaA report by Statistics Canada says recent research suggests that during new immigrants’ first few years of adjustment in Canada, their business ownership rates are below those of Canadian-born entrepreneurs, but after four to 10 years in Canada, the situation has reversed.

The report, released on Thursday, said that in 2010, about 5.8 per cent of immigrants who had been in Canada for 10 to 30 years owned a private incorporated company (with employees) compared to 4.8 per cent of the Canadian-born.

“However, the firms immigrants own tend to be smaller than those owned by the Canadian-born. Furthermore, about 10.8 per cent of such longer-term immigrants were unincorporated self-employed compared to 7.5 per cent of the Canadian-born,” it said.

“There is some evidence indicating that the higher self-employment rate among immigrants is in part due to their inability to find a good job. Earlier research found that the majority of both immigrants and the Canadian-born were self-employed because they chose to be self-employed. However, the proportion who were self-employed because of a lack of job opportunities was higher among immigrants (33 per cent) and recent immigrants (40 per cent) than among the Canadian-born (20 per cent).”

The federal agency said there are four broad classes of immigrants usually considered in Canadian studies: economic class, business class, family class and refugees.

“The likelihood of being a business owner is highest among business class immigrants (at 25.1 per cent), as might be expected. However, since this is a small class, firms owned by business class immigrants accounted for only about 10 per cent of all immigrant-owned firms. Next to the business class, economic class principle applicants have the highest tendency to be business owners, at 14.9 per cent; this includes both incorporated and unincorporated self-employed. … The shares of refugees and family-class immigrants who are business owners – 14.4 per cent and 14.9 per cent, respectively – are comparable to the ownership rate among economic immigrants. A relatively high rate of unincorporated self-employment among refugees, who generally have the most difficulty in the labour market, may be due in part to the difficulty they experience trying to find a good job,” it said.

“Studies from Sweden, Norway, Germany and the U.S. find that immigrant businesses have a shorter survival time than businesses owned by the native-born. Recent Statistics Canada research suggests a different result for Canada. On average, immigrants remain owners of private incorporated companies for about as long as the Canadian-born. Roughly 80 per cent of immigrant owners of private companies are still owners two years after becoming firm owners, and 58 per cent are still owners after seven years. The numbers are similar for the Canadian-born. For recent immigrants, however, the survival time is somewhat shorter. Business survival times are affected by immigrant characteristics such as age, source region and industry.”

Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.

New immigrants becoming key entrepreneurs in Canada

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