OTTAWA — Black-owned businesses in Canada tend to be smaller and perform less well financially than businesses owned by white people or by other racialized groups, Statistics Canada said.
In a new report analyzing data from several sources up to 2018, the agency found that the proportion of Black business owners among all business owners has been increasing over time.
However, the numbers show that Black-owned businesses may be struggling more on average, with lower profit margins.
Research has shown that Black business owners face a variety of challenges, in particular access to capital, and that the Black business community is under-represented when it comes to research and data.
A 2021 report by the Canadian Black Chamber of Commerce in partnership with the Business Development Bank of Canada found that Black business owners were often not comfortable applying for funding, or unable to find funding that would fit their business. Some respondents described encountering racial or gender discrimination when they dealt with banks.
Also in 2021, a survey commissioned by the African Canadian Senate Group and Senator Colin Deacon found that more than three-quarters of Black entrepreneurs say their race makes it harder for them to succeed. They faced significant barriers to funding, financing, capital or sales, the report found, and many had low trust in banks while many were also lacking access to support and advice.
In 2019, 77 per cent of the Black entrepreneurs interviewed for the Chamber report generated less than $100,000 in revenue. More than half had less than $50,000 in revenue.
Black business owners make lower incomes on average than business owners who are white or from other racialized groups, the Statistics Canada report found.
The senate survey found that 44 per cent of Black entrepreneurs couldn't pay themselves from their business.
Black-owned businesses are more likely to be unincorporated as well, the agency said.
More than half of Black business owners in Canada in 2018 were immigrants, according to Statistics Canada. The Chamber report notes that immigrants also face barriers when it comes to opening and operating businesses, including access to capital. Yet immigrants are also more likely to be self-employed out of necessity, the report said, with many newcomers to Canada finding themselves excluded from the labour market.
This report by The Canadian Press was first published Feb. 23, 2023.
The Canadian Press
