Why Supporting Diverse and Underrepresented Entrepreneurs Strengthens Canada's Economy
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Introduction
When people talk about business growth, the focus is often on revenue, scale, and market share.
What is discussed less often is who has access to build and sustain a business in the first place.
In Canada, entrepreneurship is not evenly distributed across populations. Differences in access to capital, networks, and support systems shape who is able to start, grow, and maintain a business.[1][2]
This is not only a question of equity. It is a question of economic performance.[6]
The Current Landscape of Entrepreneurship in Canada
Canada's business community is diverse, but not fully representative of its population.[3][4]
Women entrepreneurs
Women own approximately 18% of businesses in Canada, with more than 99% of these classified as small and medium-sized enterprises (SMEs).[1]
Women-owned and women-led businesses are more likely to operate in smaller-scale sectors and report greater barriers to financing, including receiving smaller average amounts of financing than men-owned businesses.[1][7]
Immigrant entrepreneurs
Immigrants demonstrate strong and often higher rates of entrepreneurial activity in certain segments, particularly self-employment and incorporated businesses.[2]
Research from Statistics Canada and the Business Development Bank of Canada shows that newcomers have higher rates of entrepreneurial activity than people born in Canada, and that economic-class immigrants are more likely to own firms in knowledge-based industries.[2][8]
Immigrant-owned businesses play a significant role in job creation and local economic activity. They make a significant contribution to net job creation, particularly among newer and growing firms.[2]
Racialized and minority entrepreneurs
Racialized individuals represent a growing share of entrepreneurs but remain underrepresented in business ownership relative to population size.[3]
As of the fourth quarter of 2023, businesses majority-owned by racialized individuals represented 19.4% of private sector businesses, while racialized groups make up roughly one in four people in Canada.[3]
These businesses are more likely to be small, more often self-funded, and concentrated in a narrower range of sectors than non-racialized businesses.[3]
Black entrepreneurs
Black business owners represented 2.1% of all business owners in Canada in 2018,[4] rising to 2.4% of all businesses by 2020, reflecting growth over time rather than a single-year range.[5]
Black Canadians make up about 4.3% of the total population, highlighting a persistent representation gap between population share and business ownership.[4]
Black-owned businesses face documented disparities in access to financing and business support programs, including smaller firm size, weaker financial performance, and lower rates of access to certain types of institutional support compared with other businesses.[4][5]
Across these groups, a consistent pattern emerges: entrepreneurial energy and intent exist in abundance. The gap lies in access and sustainability, not in ambition or capability.
Why This Matters for the Economy
Supporting diverse entrepreneurs is often framed as a social or community issue. It is also a measurable economic opportunity with direct implications for national productivity, employment, and resilience.[6]
1. Increased economic participation
When more people are able to start and sustain businesses:
Workforce participation expands as more individuals move into self-employment and business ownership.
More individuals transition from employment to job creation, hiring others as their firms grow.
Economic activity becomes more distributed across communities rather than concentrated in a small set of firms and regions.
According to Innovation, Science and Economic Development Canada, small businesses account for 98.2% of all employer businesses in Canada. Small and medium-sized enterprises combined account for roughly 99.7% of all employer businesses, underscoring how broad and inclusive participation among small firms is central to overall economic performance.[6]
2. Innovation and market expansion
Diverse entrepreneurs often:
Serve underserved and emerging markets.
Introduce culturally relevant products and services.
Identify gaps that established businesses may overlook.
Statistics Canada finds that immigrant entrepreneurs are more likely to own firms in certain knowledge-based industries, and that immigrant-owned firms contribute strongly to net job creation and innovation.[2]
BDC's recent analysis similarly emphasizes that immigrant entrepreneurs are an important driver of new business creation and economic dynamism in Canada, with immigrants showing higher rates of entrepreneurial activity than non-immigrants.[8]
3. Local and community impact
Entrepreneurship has a direct effect on communities through:
Job creation and local employment.
Local spending and reinvestment in neighbourhoods.
Community-based economic development and service provision.
When more diverse businesses succeed, these benefits extend into communities that are often under-resourced and underserved by mainstream business infrastructure.[4][5]
4. Long-term economic resilience
An economy that draws on a narrow segment of entrepreneurs is more vulnerable to disruption. Broader participation leads to more diverse revenue streams across sectors, greater adaptability during economic shifts, and stronger overall resilience at the national level.[6][2]
What Gets in the Way
The gap between entrepreneurial potential and business outcomes is not explained by a lack of ambition or capability. It is shaped by a combination of structural barriers that affect underrepresented entrepreneurs more acutely.[1][2]
Access to capital
Many underrepresented entrepreneurs navigate:
Lower approval rates for traditional financing and more frequent denials.
Smaller average loan sizes when approved.
Greater reliance on personal savings and informal funding sources.
In one 2020 analysis data suggests, among Black-owned businesses, close to 1% of federal Business Innovation and Growth Support (BIGS) funding reached Black-owned businesses in 2020, despite Black-owned firms representing a larger share of all businesses.[5]
For women entrepreneurs, research shows that the average amount of financing for men-owned businesses is about 150% higher than that for women-owned businesses, meaning women typically receive substantially smaller financing amounts even when they access credit.[1]
Access to networks
Business growth is often relationship-driven. Underrepresented entrepreneurs may face limited access to:
Industry networks and professional associations.
Mentorship and sponsorship relationships.
Partnership and procurement opportunities.
Reports on women and racialized business ownership note that these network gaps contribute to reduced visibility, fewer referrals, and fewer opportunities to secure contracts and growth-oriented resources.[1][3]
Access to operational support
Many entrepreneurs are building without:
Clear internal systems and processes.
Strategic operational guidance.
Tools aligned with how their business actually functions.
This leads to businesses that launch with strong energy but struggle to scale sustainably over time, particularly among smaller and under-capitalized firms.[1]
Why Support Needs to Go Beyond Funding
Funding is essential, but it is not sufficient on its own. Businesses also need the operational infrastructure and relationships that allow them to use capital effectively over time.[1]
1. Usable systems
Processes and tools that are practical, accessible, and aligned with how the business operates day to day, increasing efficiency and reducing burnout as firms grow.[1]
2. Implementation support
Guidance that helps entrepreneurs move from ideas and plans to concrete execution, not advisory support alone, particularly for owners navigating complex regulatory, financial, or procurement environments for the first time.[7]
3. Capacity-building
Developing internal strength and competency across finance, operations, governance, and strategy, so businesses can operate, adapt, and grow independently over time.[1]
4. Access pathways
Connections to:
Government and corporate procurement systems.
Strategic partnerships and networks.
Broader markets and growth opportunities.
These pathways are especially important for racialized, immigrant, women, and Black entrepreneurs who have historically been excluded from mainstream business networks.[3][1]
The Broader Impact of a More Inclusive Business Economy
When barriers are reduced and access improves:
More businesses are created and sustained over the long term.
Economic benefits are distributed more widely across communities.
Innovation reflects a broader range of lived experiences and market needs.
Local economies become more stable and self-sustaining.
Evidence from federal and national research partners shows that underrepresented entrepreneurs already contribute significantly to job creation, innovation, and community resilience, and that closing existing gaps would unlock additional economic potential.[2][4][1]
This is not about redistributing opportunity. It is about unlocking potential that already exists but is not yet fully supported.
Frequently Asked Questions
Why focus on underrepresented entrepreneurs?
Because data shows they face measurable barriers in access to capital, networks, and support, which directly impact business creation, growth, and long-term sustainability.[1][4][5]
Do diverse businesses contribute differently to the economy?
They contribute in ways that expand markets, increase innovation, and strengthen local economies, particularly in communities that have historically been underserved by mainstream business infrastructure.[2][8]
Is this only relevant for small businesses?
No. While many underrepresented entrepreneurs start small, the long-term impact includes scaling businesses, meaningful job creation, and broader economic contribution at the regional and national level.[6][2]
Final Thought
Entrepreneurship is one of the most direct ways people participate in and shape the economy.
When access to entrepreneurship is uneven, so is participation in economic growth.[2][1]
Supporting diverse and underrepresented entrepreneurs is not about focusing on specific groups in isolation. It is about building an economy that is more complete, more innovative, and more reflective of the full range of people within it.[3][8]
ABOUT VERONICA FORD CONSULTING, (VFC)
Why We Do This Work
At Veronica Ford Consulting (VFC), our work is grounded in a broader perspective: strong businesses do not exist in isolation. They shape the systems around them, and their success contributes to community stability and economic resilience.
When more entrepreneurs are able to build sustainable, well-structured businesses:
Communities gain stability and expanded opportunity.
Economic participation becomes more widely accessible.
The businesses that support communities are themselves well-supported.
This is not just about serving individual clients. It is about contributing to an economy where more people are able to build, sustain, and grow what they create.
If you're building something meaningful and need a partner to help move it forward, let's talk.
Visit www.veronicafordconsulting.com to learn more about how VFC supports purpose-driven entrepreneurs and organizations through hands-on operational support, strategic guidance, and capacity-building.
This article is shared for general informational and educational purposes only and reflects the author’s perspective, interpretation, and research available at the time of writing. While care has been taken to provide thoughtful and well-researched content, information may change over time. Readers are encouraged to conduct their own research and consult a qualified professional regarding their particular circumstances before making decisions. Any decisions made based on this content remain the responsibility of the reader.
Works Cited
Sources are numbered to correspond with superscript references throughout the article. Format follows MLA 9th edition.
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1. Women Entrepreneurship Knowledge Hub (WEKH). State of Women's Entrepreneurship in Canada 2023. WEKH, Mar. 2023, wekh.ca/research/the-state-of-womens-entrepreneurship-in-canada-2023.v
2. Statistics Canada. "Immigrant Entrepreneurs in Canada: Highlights from Recent Studies." Statistics Canada Economic Insights, catalogue no. 36-28-0001, 22 Sept. 2021, www150.statcan.gc.ca/n1/pub/36-28-0001/2021009/article/00001-eng.htm.v
3. Statistics Canada. "The Expectations and Economic Outlook Among Businesses Majority-Owned by Racialized Individuals, Fourth Quarter of 2023." Statistics Canada, catalogue no. 11-621-m, no. 2023019, 21 Dec. 2023, www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2023019-eng.htm.v
4. Statistics Canada. "Black Business Owners in Canada." Analytical Studies Branch Research Paper Series, catalogue no. 11f0019m, no. 2023001, 22 Feb. 2023, www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2023001-eng.htm.v
5. Statistics Canada. "Black-Owned Businesses in Canada, 2020." Statistics Canada, catalogue no. 11-627-m, no. 2023052, 5 Oct. 2023, www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2023052-eng.htm.v
6. Innovation, Science and Economic Development Canada (ISED). Key Small Business Statistics 2024. Government of Canada, 2024, ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2024.v
7. Innovation, Science and Economic Development Canada (ISED). Women Entrepreneurship Strategy: Progress Report 2023. Government of Canada, 2023, ised-isde.canada.ca/site/ised/en/programs-and-initiatives/women-entrepreneurship-strategy/women-entrepreneurship-strategy-progress-report-2023.v
8. Business Development Bank of Canada (BDC). "Immigrant Entrepreneurship Is Taking Centre Stage in Canada." BDC, 27 May 2024, www.bdc.ca/en/articles-tools/blog/immigrant-entrepreneurship-taking-centre-stage-canada.v
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