A recent Statistics Canada study highlights the growth and challenges of Black-owned businesses in Canada. Despite an increase in Black entrepreneurship, these businesses represent a small fraction of the country’s overall business landscape and face significant hurdles compared to their counterparts.

The study reveals that as of 2023, there were approximately 66,880 Black-owned businesses in Canada. This figure represents about 2.1 percent of the more than 3.1 million total businesses in the country. By contrast, 4.3 percent of Canadians identify as Black.

A significant majority of Black-owned businesses are led by men, with self-employment rates among Black Canadians increasing from 1.8 percent in the early 2000s to 3.5 percent by 2021. This growth rate is higher for Black men compared to Black women, whose self-employment rate rose from 1.3 percent to 2.2 percent over the same period.

However, Black-owned businesses are generally smaller and less profitable than others. Over 95 percent of unincorporated Black-owned businesses have fewer than one employee, and more than 91 percent of incorporated Black businesses employ fewer than five people. This is nearly half the rate of larger firms compared to white-owned businesses.

In terms of earnings, Black men business owners earned an average of $56,100 in 2022, significantly less than their peers from other racialized groups and $43,300 less than white male business owners. Black women entrepreneurs earned the same as other racialized groups but $16,000 less than white women. Additionally, Black-owned businesses have lower profit margins, averaging 8.5 percent compared to 14.9 percent for white-owned businesses.

The study suggests that systemic challenges may contribute to these disparities. Carlton-James Osakwe, a business professor at Mount Royal University, notes that Black-owned businesses often face difficulties in securing bank loans and accessing favorable interest rates. Although the federal government created the Black Entrepreneurship Loan Fund in 2021 to address these issues, the need for funding remains a significant challenge.

Beyond traditional funding sources, Osakwe highlights the importance of “dealmakers”—successful entrepreneurs who invest in and support emerging businesses. However, these networks are predominantly white, limiting access for Black entrepreneurs.

Success stories like that of Lola Adeyemi, who launched “It’s Souper”, a soup company inspired by Nigerian flavors, illustrate the potential despite the obstacles. Adeyemi used her savings to start her business and secured a $72,000 grant to adapt to the pandemic’s demands. She underscores the importance of expanding networks beyond the Black community to overcome funding challenges.

Similarly, Sydonne Warren, a muralist and artist in Calgary, leveraged an unexpected partnership with Inner-City Brewing to grow her business. Her experience highlights the lack of role models and community support, which often forces Black entrepreneurs to navigate business challenges with less guidance. The study’s findings point to the need for increased support and resources for Black-owned businesses to address systemic barriers and enable them to thrive.