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Statistics Canada study on Black-owned businesses suggests systemic challenges hold them back – CBC News

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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.


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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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