Contrary to popular belief, being a small business owner doesn't automatically translate to being wealthy. According to the Canadian Federation of Independent Business (CFIB), most small business owners are classified within the middle class.
The CFIB cites data from Statistics Canada that suggests two-thirds of Canadian small business owners earn less than $73,000 per year, and employers earn less than $40,000 outnumber those earning more than $250,000 by four to one.
There is a motivation behind quoting these numbers: the CFIB is lobbying for the Government to reinstate the small business tax reduction that was eliminated in March's federal budget.
"The notion that most small business owners are rich, or part of the 'one per cent', is pure fiction," says CFIB President Dan Kelly. "The simple truth is Canada's small business owners are overwhelmingly middle class. They are your mechanic, accountant, hair dresser and landscaper, just trying to earn a living doing something they love."
The profile also shows that small business owners are much more likely to work longer hours than employees. More than 40% of small business owners work 50-plus hours a week. Only 6% of employees are in the same category.
"Part of the reason small business owners don't take home huge salaries or dividends is because they reinvest any profits back into their business and their employees through training programs, salary increases, new hires, or equipment purchases," adds Ted Mallett, CFIB Chief Economist. "Having a low small business tax rate helps them to do just that. It helps them grow and keep Canada's economic engine running."
The profile was generated from the latest data from Statistics Canada's National Household Survey, the Survey of Labour and Income Dynamics and other sources.
CFIB is Canada's largest association of small- and medium-sized businesses with 109,000 members across every sector and region.