This series of five blog posts is focused on self-employment in agriculture and food-related sectors in Ontario from 2001 to 2014. The data has been collected from OMAFRA’s Analyst (EMSI) database. The blog posts are excerpts from longer reports written by Ray Bollman and available from REAPontario upon request.
Part 1: Self-Employment Overview
- Self-employment in agriculture and food-related sector has fluctuated around 100,000 workers over the period 2001 to 2014. Self-employment was evenly split between agriculture and food-related sectors.
- On-farm self-employment in Ontario was relatively less intensive than the Canadian level from 2001 to 2014 (i.e. the percent of Ontario’s workforce who were on-farm self-employed was less than the percent at the Canada level). Slight relative gains were noted during the first decade of the 2000s because although the share of Ontario’s self-employed who worked on farms decreased from 5.7% in 2001 to 4.4% in 2014, the share at the Canada-level declined faster, which generated the observation of a net positive change in “intensity,” relative to the Canadian pattern.
Self-employment means running a business as a sole proprietorship or as an independent contractor or as a partner in such a business. Statistics Canada defines self-employment as:
“Working owners of an incorporated business, farm or professional practice, or working owners of an unincorporated business, farm or professional practice. The latter group also includes self-employed workers who do not own a business (such as babysitters and newspaper carriers). Self-employed workers are further subdivided by those with or without paid help. Also included among the self-employed are unpaid family workers. They are persons who work without pay on a farm or in a business or professional practice owned and operated by another family member living in the same dwelling. They represented less than 1% of the self-employed in 2014.”
[Statistics Canada, Guide to the Labour Force Survey: 2015. (Ottawa: Statistics Canada, Catalogue no. 71-543) (http://www.statcan.gc.ca/pub/71-543-g/71-543-g2013001-eng.htm).]
Self-employment is often considered as an indicator of entrepreneurship. However, not all self-employed individuals innovate or intend to innovate, nor do they grow or intend to grow their business. Thus, not all self-employed are “entrepreneurs” [Bollman, Ray D. and Alessandro Alasia, “A profile of self-employment in rural and small town Canada: Is there an impending retirement of self-employed business operators?” Rural and Small Town Canada Analysis Bulletin 9, 1 (Ottawa: Statistics Canada, Catalogue no. 21-006-XIE, 2012) (http://www5.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=21-006-X&CHROPG=1&lang=eng).]
The objective of this report is to present the trends in the number of self-employed in agriculture and in food-related sectors in Ontario. We focus on some broad indicators of “opportunities” for new self-employment prospects – both for immigrants and for Canadian residents – in agriculture and in food-related sectors.
agriculture we include
- farms (NAICS 111-112) plus
- support activities for farms (1150) and for
food-related sectors, we include
- food manufacturing (311);
- beverage and tobacco product manufacturing (312);
- agricultural, construction and mining machinery manufacturing (3331);
- farm product merchant wholesalers (411);
- food, beverage and tobacco merchant wholesalers (433);
- farm, lawn and garden machinery and equipment merchant wholesalers (4171);
- agricultural supplies merchant wholesalers (4183);
- food and beverage stores (445); and
- food services, restaurants and drinking places (722).
Overall, the level of self-employment in agriculture and food-related sector has fluctuated around 100,000 workers in the 2001 to 2014 period (Figure 1). Interestingly, this has been evenly split between agriculture (on farms and in support services to farms) and food-related sectors.
A quick review of the levels and trends in each of the component sectors will be helpful for understanding the general flatness of the employment levels in Figure 1 and the components of the slightly-higher overall levels in 2007. Note that the overall estimated level in 2007 was 16,000 higher than in 2004, and by 2014 the level had declined by 12,000.
Self-employment on farms (NAICS 111-112)
During the period from 2001 to 2014, self-employment on farms in Ontario fluctuated from a low of 43,000 in 2003 and 2004 to a high of 52,000 in 2011 (Figure 2).
The OMAFRA EMSI database enables us to compare the level of self-employment at two points in time and to calculate an indicator of competitiveness for the rate of change in the number of self-employed. The calculation is based on a shift-share analysis which compares the actual change in the number of Ontario self-employed (for a given sector) to the expected change in Ontario self-employed (which is calculated from the national rate of growth of all self-employment and the sector-specific national rate of growth of self-employment in the given sector). If the level of self-employment grew more in Ontario in the given sector than the expected level, based on national patterns, then the sector is deemed “competitive” in Ontario (relative to the national patterns).
When we compare the level of self-employment on farms in 2001 and 2014, we see that the expected change (based on national patterns) was a decline of 9,100 but the actual change in Ontario was a decline of 3,800. According to the measure, then, self-employment on farms in Ontario was “competitive” by 5,300 self-employment individuals (Table 1). (There was an 18% national decline but only an 8% decline in Ontario. Thus the change in Ontario was 10 percentage points higher.) In this sense, on-farm self-employment was competitive in Ontario.
We also considered the level of competitiveness in three sub-periods within the 2001 to 2014 period: 2001 to 2006, 2006 to 2011 and 2011 to 2014. In these three periods, the competitiveness level of the change in on-farm self-employment was:
- positive (4,400) from 2001 to 2006;
- positive (2,500) from 2006 to 2011; and
- slightly negative (-900) from 2011 to 2014.
Thus, on-farm self-employment in Ontario was generally competitive relative to national patterns (because Ontario did not decline as fast) during the first decade of the 2000s. In recent years, however, the Ontario pattern has been closer to the rate of decline at the national level.
Ontario’s workforce is relatively less intensive in on-farm self-employment compared to Canada as a whole. As measured by a location quotient, the intensity of on-farm self-employment in Ontario was 0.66, compared to the national level (=1.0). Due to the slower decline in Ontario during the decade of the 2000s, the location quotient increased from 0.60 in 2001 to 0.69 in 2011 before a slight decline to 0.66 in 2014. By this measure, Ontario’s workforce in on-farm self-employment is relatively less intensive than the Canadian level – but slight gains were noted during the first decade of the 2000s.
NOTE ON DATA: The data on self-employed for detailed NAICS is available from only a few sources: the 2001 and the 2006 long-form census, the 2011 NHS, and the Labour Force Survey. The latter can be tabulated for 4-digit NAICS but the data show considerable year-to-year variability for any estimated number less than 5,000 and higher year-to-year variability for any estimated number less than 2,000. Thus, the data supplied in this blog series are estimates.
Ray D Bollman, Economist – Rural Canada