The number of Black-owned enterprises in Canada is growing, but still represent a tiny fraction of the country’s business landscape, and they tend to be smaller and less profitable than other businesses.
Those are some of the main takeaways from a recent Statistics Canada study that looked at the state of entrepreneurship among Black Canadians between 2001 and 2018.
The study amalgamated a series of different reports — including census data for 2001, 2006 and 2016; the 2011 National Household Survey and the 2018 Employer-Employee Dynamics Database — and analyzed them to see how the status for Black entrepreneurs has changed over the better part of two decades.
It found there were approximately 66,880 Black-owned businesses in Canada as of 2018; about 2.1 per cent of the more than 3.1 million businesses in total across the country.
According to the latest census data, 4.3 per cent of Canadians, or more than 1.5 million people, identify as Black.
Almost three-quarters of Black-owned businesses are owned by men, while the percentage of self-employment grew from 1.8 at the start of the study period to 3.5 per cent by 2018. That’s greater than the growth in self-employment among Black women, which went from 1.3 per cent to 2.2.
While Black-owned businesses are growing, the data suggests they are not meeting their full potential as they tend to be smaller and less profitable than other businesses.
More than 95 per cent of unincorporated Canadian businesses owned by Black people have fewer than one employee, and even among those that are large and complex enough to want to incorporate, more than 91 per cent have fewer than five.
“Black-owned businesses are almost half as likely as White-owned businesses to have five or more employees,” the study found.
They’re less lucrative, too. Among male business owners, Black men earned an average of $56,100. That’s $9,500 less than their counterparts from other racialized groups and $43,300 less than what average white male business owners earned in 2018. Black women business owners, meanwhile, earn the same as other racialized groups, but $16,000 less than white women.
Black-owned businesses tend to be less profitable, with profit margins averaging 8.5 per cent, versus 14.9 at white-owned firms. The study says that white-owned businesses tend to “have a better ability to profit from their activities and have more room to maneuver to cope with rising costs or competition,” but stops well short of suggesting any systemic disadvantages are solely to blame for that discrepancy.
Funding challenges
But Carlton-James Okaswe, a business professor at Mount Royal University, says the numbers clearly suggest there are systemic challenges holding Black-owned business from reaching their full potential.
“Black-owned enterprises … have a harder time getting bank loans … and even at what interest rates they might get,” he told CBC News. “That needs to be explored.”
Carlton-James Osakwe says data from Statistics Canada shows Black-owned businesses face funding challenges that other entrepreneurs don’t. (Anis Heydari/CBC)
In 2021, the federal government created the Black Entrepreneurship Loan Fund, a $265 million commitment to help entrepreneurs with loans of up to $250,000. Okaswe says programs like that and others are a step in the right direction, but he still hears from Black-owned businesses all the time who say their biggest challenge is funding.
Outside of conventional bank loans or government grants, a major funding source for small businesses is often what he calls “dealmakers” — entrepreneurs who grew businesses and now spend some of that capital to nurture the next generation.
“But these dealmakers tend to be Caucasians or white people in general, and so their networks will revolve around that,” he said. “It’s fair to say that the dealmaker network is something that Black people don’t have sufficient access to.”
Some solutions
Lola Adeyemi is one success story who managed to overcome those hurdles and build her dream business, but it wasn’t easy. After immigrating to Canada in 2005, she worked a variety of corporate jobs while longing to set out on her own in the food business. In 2018, she started It’s Souper, a soup company built on the flavours of her native Nigeria.
She launched her business from her own savings, but to scale up to the level where she can produce enough to get shelf space at major grocery chains, she needed money to survive. And the more she grew, the bigger those funding challenges got.
“The demands are pretty daunting and it starts immediately,” she said of the need for funding.
Two years after launching her business, she applied for and was awarded a $72,000 grant from law firm Cassels Brock, money she used to pivot to the new reality of selling in the pandemic: online. She later appeared on CBC’s Dragon’s Den seeking financing to help her manage her growth.
WATCH | It’s Souper appears on Dragon’s Den:
It’s Souper
1 year ago
Duration 7:50
Lola Adeyemi from Toronto, ON, pitches her line of Nigerian inspired soups and sauces.
While she is grateful for the mentorship, funding and help she’s received along the way, Adeyemi says a major stumbling block for Black entrepreneurs is that lack of a community above them — to help them rise up.
“It’s a huge problem because you’re not seeing others who have done it, so you don’t think it’s doable,” she said. “What I tell a lot of people in the Black community is to expand beyond the Black community because we’re not yet at the point where we are in places of influence enough to be able to have an impact.”
Entrepreneur Lola Adeyemi is shown in front of some of her It’s Souper products. She says she encourages all Black owned businesses to expand their networks in order to get ahead. (Greg Bruce/CBC)
It was nerve-wracking for Sydonne Warren to make a move like that, but it paid off for her small but growing business. An artist and muralist in Calgary, it was a chance encounter with an independent brewery in the city that led to a relationship that’s been helping both sides ever since. In 2020, the owners of Inner City Brewing contacted her about purchasing one of her designs to feature it on beer cans.
Next, they commissioned her to paint a mural in their space. So when she needed a space to host her “paint and sip” nights — where attendees can learn to paint, while sampling a few drinks — the bar was a natural fit.
Her experience is similar to many Black business owners, in that she didn’t start out with an obvious career path in mind, but she didn’t let that stop her.
“I didn’t know other business owners growing up so I’ve had to kind of do trial and error a lot to teach myself,” she said. “I think if we were probably more educated on how to run business and how to have a successful business, then I think we’d see the gap start to close.”
For more stories about the experiences of Black Canadians — from anti-Black racism to success stories within the Black community — check out Being Black in Canada, a CBC project Black Canadians can be proud of. You can read more stories here.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
