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Immigrant-owned businesses create more jobs in Canada: Study

A new study by Statistics Canada has revealed that the contributions of immigrant-owned businesses in creating jobs in Canada was ‘disproportionately higher’, when taken into consideration the total number of such firms studied. Between 2003 and 2013, businesses owned by immigrants accounted for 25 per cent of net jobs created by private incorporated firms.

To put this into perspective, we must know that immigrant-owned businesses constituted only 17 per cent of the firms studied. Immigrant-owned businesses created roughly 400,000 net new jobs in Canada during the 11-year period. This amounted to a higher per-firm net job creation average than Canadian-owned businesses.

The study distinguished private incorporated businesses owned by immigrants who entered Canada since 1980 from firms with Canadian-born owners. The study observed that immigrant-owned firms were more likely to than firms with Canadian-born owners to be job creators than job destroyers. Private incorporated companies owned by immigrants were 1.3 times as likely to be high-growth firms, according to the study. Their annual employment growth also exceeds 20 per cent than those owned by the Canadian-born.

Another notable fact the study observed was that majority of the immigrant-owned firms were less than four-years-old. “In any given year, young firms … were much more likely to increase employment than to shed employment,” says the study. While young firm accounted for 40.5 per cent of gross job creation, they accounted for only 17 per cent of the gross job losses. According to Statistics Canada, young firms are more dynamic as they have a higher growth rate than more established firms.

Immigration increased the job creation dynamism of the private incorporated company sector by generating a large number of entering and young companies, which led to immigrant-owned firms’ disproportionate contribution to job creation in the private incorporated company sector, says the study.

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