March 16, 2022

Jobs and job growth in Alberta by business size

It is well-established that most businesses in Alberta and across Canada are small. Companies with fewer than five employees make up a full 87% of all businesses operating in the province, and the figures are almost identical nation-wide.

However, just because the vast majority of businesses are small operations does not mean that they necessarily are large overall employers in Alberta, nor that they drive job growth in the province.

In this Quick Read, we look at employment by business size in Alberta to see how many Albertans are employed by small versus large companies; which have been responsible for most job growth in the province; and which have been hit hardest by the pandemic.

Alberta’s business structure

As in the rest of Canada, Alberta businesses skew heavily to small owner-operated companies and those with only a handful of employees. At the end of 2021, there were a little over 527,000 businesses in Alberta:

  • A full 87% had fewer than five employees;
  • About 9% had between five and 19 employees;
  • About 3% had between 20 and 99 workers; and
  • Only 0.6% had more than 100 employees.

At the highest end, there were 334 operations in Alberta with 500 or more employees—just 0.06% of all the businesses operating in the province.

All these figures are roughly in line with the Canadian average, but compared to countries like the US, Canada has proportionately more small businesses and considerably fewer large ones. Past BCA research has pointed to this fact as one of the reasons why Canadian productivity levels lag those in the US; large companies are typically more productive than small ones.

Employment by Enterprise Size

Although large companies make up only a tiny fraction of the businesses operating in Alberta, they employ a significant proportion of the provincial workforce. In 2020—the most recent year for which data are available—large companies employed about 835,000 Albertans, nearly 47% of the entire workforce. And three of every five employed Albertans works for a company with at least 100 employees.

By comparison, while 87% of businesses in Alberta are small (0-4 employees), they employ less than 8% of Albertans.

Job Growth by Company Size

Not only do large companies dominate employment in Alberta, they have, over the years, accounted for a growing share of jobs in the province.

This might seem surprising at first, given the large number of layoff and downsizing announcements in Alberta over the last five years. However, while layoffs tend to be large, discrete, and newsworthy events, hiring tends to be more gradual, incremental, and far less likely to capture media attention.

Data on employment by enterprise size only go back to 2001. However, the numbers show a clear trend. In 2001, about 42% of Albertans worked for a company with 500 or more employees. By 2020, that figure had risen to nearly 47%.

Put another way, about 594,000 jobs were created in Alberta from 2001 to 2020. Of those, 55% (326,000) were in large companies and another 15% (92,000) were in businesses with 100-499 companies.

Meanwhile, the share of Albertans working for small companies is shrinking. In 2001, about 8.4% of Albertans worked for a business where they were one of less than five employees, dropping to 7.7% by 2020.

Even slightly larger companies are seeing their share of total employment fall. In 2001, about 24% of Albertans worked for a company with fewer than 20 employees, falling to 21% by 2020.

It’s important to note that just because the proportion of Albertans working for smaller companies is falling does not mean that the province’s small businesses are not growing. If a company with just three employees adds two new workers, they will graduate to a higher classification and will disappear from the list of companies with just 0-4 employees. This fact will inherently dampen growth figures for small businesses. Nevertheless, it is still clear that large companies are driving job gains in Alberta.

COVID Impacts

One final question worth exploring is the impact of the pandemic on companies of different sizes. While 2021 data on the subject have not yet been released, numbers from 2020 suggest that both smaller and larger businesses were better able to weather the storm than those in between.

From 2019 to 2020, the smallest businesses in Alberta (0-4 employees) lost approximately 4.6% of their workforce. For their part, about 9% of Albertans who worked for large companies (500+ workers) lost their jobs. However, for those in the middle (20-499 employees), losses were in the range of 14-15%. This likely represents the disproportionate impact of the pandemic on restaurants and bars which tend to employ in the lower range (20-99 workers), as well as tourism and hospitality businesses which likely employ in the higher range.

Mike Holden, Vice President of Policy & Chief Economist

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