Family businesses deserve more attention

About $191.9 billion of family-owned GDP came from big businesses, the report says, firms such as Bombardier Inc. and Loblaw Cos. Ltd. (Cole Burston/Bloomberg)

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The Conference Board of Canada partnered with the Family Enterprise Xchange Foundation (FEX-F) to study the economic impact of family enterprises.

The research found that family businesses:

• Make up a significant proportion of employment in leading industries, including more than 80 per cent of employment in the agriculture sector;

• Account for 63 per cent of all private-sector firms in Canada;

• Generate almost 50 per cent of Canada’s real GDP in the private-sector ($574.6 billion per year);

• Employ 47 per cent of people in the private-sector (almost  seven million jobs);

• Represent 90 per cent of the jobs generated by SMEs (small and medium-sized companies), and

• Account for almost 65 per cent of the output of small and medium-sized companies.

Yet demographics, unintended consequences of tax policy, and a lack of trained advisors are threatening the continuity of family enterprise and its positive impact on our social and economic fabric, the study sponsors said.

The study makes no specific recommendations about government policies, such as taxation and inheritance.

“This first-of-its kind study in Canada highlights the crucial role family enterprises play in our economy as well as the need for more in-depth data to be collected,” said Michael Bassett, director of research impact and content strategy for the the Conference Board of Canada.

“The research clearly shows that family-owned businesses exhibit characteristics that are different than non-family-owned.

“Given demographic trends and the looming succession of many family enterprises, the data gaps in our understanding of this important part of the economy are worrying because policy makers are largely in the dark regarding an important driver of the Canadian economy,” the study’s sponsors said.

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