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What Is a Small to Medium-Sized Enterprise (SME) in Canada?

Small and medium-sized businesses have different definitions all over the world. In Canada, the following definitions apply:

  • Small business: A company with at least five paid employees, but fewer than 100 paid employees.
  • Medium-sized business: A company with at least 100 paid employees, but fewer than 500 paid employees.

It is estimated that approximately 98 percent of businesses in Canada are small, while approximately 1.5 percent are medium-sized. About 70 percent of the Canadian labour force works for small businesses, while about 20 percent work for medium-sized businesses.

The size distinctions are important; small and medium-sized businesses are treated slightly differently for tax purposes.

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