Understanding the BDC's Latest Research on Self-Employment

The Business Development Bank of Canada (BDC), Canada's premier bank for entrepreneurs, released a pivotal study on February 11, 2026, titled The Entrepreneurial Spark of Canada's Self-Employed. This research publication delves into the resurgence of self-employment across the country, highlighting its potential to drive substantial economic growth. Drawing from a comprehensive survey, the report outlines how solo operators transitioning to hiring their first employee could catalyze the creation of up to 213,000 new micro-businesses annually.

Self-employment, defined as individuals working for themselves without paid employees, has long been a cornerstone of Canada's entrepreneurial landscape. The BDC study positions it as a 'hidden engine of growth,' particularly amid recent labor market shifts. With Canada's economy facing productivity challenges and an aging cadre of business owners eyeing retirement, this rebound offers timely optimism.

Recent Trends in Canadian Self-Employment

Self-employment numbers dipped sharply during the COVID-19 pandemic as many shifted to stable wage jobs amid a tight labor market. However, since 2023, the trend has reversed, with approximately 70,000 Canadians entering self-employment in 2024 alone, bringing the total to two million solo workers. This resurgence is fueled by factors such as rising unemployment, return-to-office mandates, and a desire for flexibility in work arrangements.

Statistics Canada data corroborates this, showing self-employment buffering labor market volatility. Yet, the share remains below historical peaks, signaling room for expansion. The BDC report notes that nearly four in 10 self-employed individuals plan to hire or invest within the next year, underscoring a pivotal moment for transition to employer status.

Key Findings from the BDC Survey Methodology

The study is grounded in an online survey conducted by Sago, involving 851 self-employed workers (no paid help) and 654 micro-business owners or decision-makers (fewer than five employees). Fieldwork spanned November 19 to December 4, 2024, and January 7 to 16, 2025. While non-probabilistic, the sample yields insights comparable to a ±2.5 to ±3.8 percentage point margin of error in probability terms.

• 73% of self-employed rely solely on personal funds for financing, versus 55% of micro-businesses.
• Only 39% have a commercial bank account, compared to 52% for micro-businesses.
• 11% plan to hire their first employee in the next year, peaking at 20% for businesses aged 1-2 years.

These disparities highlight the chasm between solo operations and scalable enterprises.

Profiles of Self-Employed Canadians: Stable, Agile, and Ambitious

The BDC categorizes self-employed workers into three archetypes based on growth orientation:

• Stable (35%): Content with current scale, no immediate expansion plans.
• Agile (27%): Opportunistic, ready to seize market chances.
• Ambitious (38%): Eager to hire or invest, driving potential growth.

Hiring intent is highest in early years, dropping after five years, emphasizing the 'first hire' as a critical inflection point. Common barriers include client acquisition, cash flow management, administrative burdens, and work-life balance.

Projected Economic Impact: A $24 Billion GDP Lift

At scale, if a significant portion of ambitious self-employed hire their first employee, Canada could witness 213,000 annual transitions to micro-businesses. Half of new micro-businesses stem from such former solos. BDC's modeling estimates this adding 0.8% to GDP—equivalent to $24 billion in one year—offsetting closures and bolstering the SME base, which generates half of Canada's GDP.

This projection aligns with broader productivity needs, as small businesses eye consolidation and diversification amid uncertainty. Pierre Cléroux, BDC's Vice-President of Research and Chief Economist, states: “Canada’s self-employed are a hidden engine of growth. With the right support, a one-person business can hire, scale into a small- or medium-sized enterprise (SME) and become part of the next generation of ownership transitions.”

Financing and Growth Barriers Facing Solo Entrepreneurs

Access to capital remains a stumbling block. Self-employed workers lag micro-businesses in commercial banking and external funding, relying heavily on personal savings. This limits scaling, perpetuating a cycle of instability. Administrative tasks and time management further hinder progress, particularly for those balancing multiple roles.

In the higher education context, adjunct professors and researchers often mirror these solo operators through gig teaching or freelance consulting. While Canada treats adjuncts better than the U.S.—with higher pay and benefits—the gig economy's instability persists, pushing PhD holders toward self-employment for flexibility.Explore higher ed career advice for transitioning professionals.

Implications for Higher Education Professionals and Researchers

Higher education graduates in Canada show elevated self-employment propensity. A FreshBooks report indicates 38% with post-graduate degrees plan self-employment soon, versus 25% without college education. Statistics Canada research reveals university grads enter self-employment mid-career, leveraging expertise in consulting, online education, or research services.

The BDC study's GDP boost could indirectly enhance university funding and research grants via stronger provincial economies. Self-employed academics might form micro-firms for industry partnerships, aligning with trends where entrepreneurship education boosts post-grad self-employment rates.View higher ed jobs in Canada.

BDC Recommendations: Supporting the First Hire Transition

Targeted interventions at the 'first hire' stage could raise new-business survival by 20 percentage points in three to five years. BDC advocates financing, coaching, and AI tools for productivity. Governments and banks should prioritize accessible credit and simplified admin for solos.

• Develop first-hire financing programs.
• Offer mentorship for client acquisition and cash flow.
• Promote digital tools to ease admin burdens.

Cléroux emphasizes: “Turning self-employment into entrepreneurship is critical. Every new employer strengthens Canada’s economic fabric.”

For more on academic entrepreneurship, check Rate My Professor insights or Canadian academic opportunities.

Stakeholder Perspectives and Broader Economic Context

Entrepreneurs view self-employment as a launchpad amid $300 billion in retiring business revenue over five years. Policy makers see it addressing productivity slumps, with SMEs key to GDP half-generation. Critics note declining employer self-employment historically, urging reforms.

Future Outlook: Scaling Self-Employment for Sustainable Growth

Looking ahead, the BDC envisions self-employment fueling SME renewal, job creation, and productivity gains. With supportive policies, the $24 billion GDP injection could recur, positioning Canada competitively. For higher ed, this means more entrepreneurial alumni driving innovation in research commercialization.

Professionals eyeing self-employment can leverage skills via academic CV tips or explore faculty jobs.

Photo by Denise Jans on Unsplash

Actionable Insights for Aspiring Employer-Entrepreneurs

To capitalize on this rebound:

1. Assess your growth readiness: Are you ambitious or stable?
2. Secure financing early: Explore BDC programs.
3. Build networks for clients and mentors.
4. Adopt AI for efficiency.

Universities can enhance entrepreneurship curricula, bridging academia to business. Visit university jobs for related roles.