Measuring the Contribution of the Unincorporated Sector in the Canadian Economy, 1997 to 2002

Abstract

This paper sheds light on the contribution of unincorporated enterprises to the Canadian economy in terms of gross domestic product (GDP) from 1997 to 2002. The study separates the aggregate business GDP, including its components, into the unincorporated and incorporated sectors. After describing the key legal and organizational differences between the unincorporated and incorporated sectors, including tax regime, limited liability, and number of entities, employment and capital intensity, it looks at the contribution of the two sectors across various industries. It provides estimates for 25 S-level industries and W-level detail for some of the more important industries of the unincorporated sector. In deriving the estimates, the study used the same data sources as those used in Statistics Canada’s Input-Output Accounts. Results of the study suggest that the unincorporated sector contributed $82.2 billion in 2002 representing 10.1% of total business sector GDP, a slight decrease from 11.3% in 1997.