Calgary a ‘hotbed’ for small business-Bank study puts city in top spot in Canada

Calgary is Canada’s small business leader, says the Bank of Montreal. In a study released Wednesday, the bank suggested that strong population growth and a booming oilpatch helped Calgary retain its title of top spot for small business among 25 major cities.

Lisa Schmidt
Calgary Herald

"It deserves its number one spot because it has had very strong growth in small business," said Michael Gregory, the bank’s assistant chief economist and one of the study’s authors.

Using data from Statistics Canada, the study found that for every 1,000 residents, Calgary had 38 small businesses in 2002, the most of any major city in Canada.

Since 1998, the number of small businesses — defined as having less than 50 employees — rose more than 13 per cent in the city.

Across the country, the small business sector grew about three per cent.

The bank estimates that small firms account for about 95 per cent of the country’s one million payrolls, suggesting the economic health of the sector is critical to the Canadian economy.

Calgary continues to be a "hotbed" for small business, supported by a population spurt and strong provincial economy, Gregory said.

"When you have that fast- growing population, there’s an awful lot of small business that are created to service that population.

"Think of pizza parlours, convenience stores, barber shops — that kind of stuff," he said.

The demand for new housing also fuels the construction sector, which has a high percentage of smaller firms.

A major factor is the industrial mix of the province, which is dominated by the oil and gas sector, Gregory noted.

That industry relies heavily on the professional, scientific and technical services sector, which has a disproportionate number of small firms, he said.

"That helps propel Calgary to number one spot in terms of capita, and the growth rates as well," said Gregory.

In contrast, the more capital-intensive manufacturing sector has a much lower proportion of smaller businesses, which push southern Ontario areas to the bottom of the list, he added.

Calgary’s reputation as a city of entrepreneurs is well known and well founded, say observers.

Dan Kelly, vice-president Western Canada for the Canadian Federation of Independent Business, said the province also boasts a competitive advantage when it comes to taxation levels.

"Certainly, it’s one of the jurisdictions in Canada where taxes affecting businesses are at their lowest level," he said.

"That’s not to say there aren’t some worrisome trends," he said. "There have been a few things that are sort of warning clouds on the horizon, that if left unchecked might start to erode the business population."

Provincial and municipal governments have moved recently to increase business taxes and property taxes, he noted. Last year, the province delayed its plan to reduce corporate income taxes.

Vance Gough, an adviser for the entrepreneurship degree program at Bissett School of Business at Mount Royal College, said Calgary residents seem to have a different mindset when it comes to business.

"It’s just the culture of the city — to be an entrepreneur is not seen as a negative, but is seen as a positive thing," he said.

Another factor is a workforce with a high level of education, he said.

"These people seem to have a tendency to feel more confident in themselves," Gough said. "More confidence . . . is pushing individuals to take those risks."

That was the case with Paula Dalgarno and Chandra Morgan, who started up their own home cleaning firm last year.

They have built up their client list to the point where they are considering adding more employees, and have already hired Robin Jensen to handle their accounting and marketing.

"That’s where we’re at right now," said Dalgarno, of DalMorgan Cleaning.

It was a struggle getting starting, she admits, especially when it came to dealing with banks, but they were encouraged by public attitude, which seems to value small business owners.

"I think a lot of people welcome small businesses in Calgary," said Dalgarno.

Among smaller cities, Alberta communities were strong finishers overall, with Grande Prairie, Lloydminster and Grand Centre in the top 10 in the per capita category.

Lloydminster, Grande Prairie and Medicine Hat ranked among the fastest-growing business centres.

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