Statistics Canada
www.statcan.gc.ca
Common menu bar links
Survey of Suppliers of Business Financing
Archived Content
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
The total debt outstanding held by Canadian businesses increased for the fourth consecutive year in 2007, and again larger borrowers were mostly responsible for the rise.
Commercial suppliers of financing, including banks, credit unions, finance companies and insurance companies, reported that their Canadian business clients owed them approximately $494.5 billion, up 11.4% over 2006.
Outstanding debt among the largest businesses, those with authorization levels of $5 million or more, amounted to $302.5 billion, a 19.6% increase.
Conversely, outstanding debt of borrowers with authorization levels less than $1 million, generally the smaller companies, was $92.7 billion, down 2.7%.
The remaining companies, those with authorizations between $1 million and $4.9 million, had outstanding debt of $99.3 billion, up 3.7%.
Just under 2 million business loans were outstanding as of December 31, 2007, down 36,000 or 1.8% from 2006. Loans to the smallest borrowers accounted for virtually all of this change. Outstanding loans in the other two categories increased only marginally.
Foreign banks increase lending and gain market share
Domestic banks continued to be the major supplier of debt financing to Canadian businesses, accounting for 53.2% of the business borrowing market. In 2007, their outstanding debt financing amounted to $262.9 billion, up 13.8% over 2006.
Table 1
Suppliers of business financing
The "other banks" category, comprised primarily of foreign banks, posted the largest growth of all suppliers in 2007, as their outstanding debt rose 38.8% to $79.8 billion. This represented 16.1% of the business borrowing market in 2007.
Note to readersStatistics Canada conducts the Survey of Suppliers of Business Financing in partnership with Industry Canada and the Department of Finance, as part of a larger program of research into financing for small and medium-sized enterprises. Since most suppliers of financing do not track the employment size of their business clients, they were asked to group their clients by authorization size, the maximum amount they were allowed to borrow. Authorization size is used in this survey as a proxy for business size for lack of employment size indicators. The survey was based on a census of enterprises in selected finance and leasing industries, including government business enterprises, with assets of $5 million or more. Excluded from the survey were government programs, private not-for-profit organizations and foreign and informal suppliers such as business "angels" and family members. |
Combined, these two groups reported $342.7 billion in debt financing outstanding. This accounted for more than two-thirds of the Canadian business borrowing market in 2007.
Provinces: Double-digit growth in outstanding debt in British Columbia, Alberta and Ontario
Outstanding business debt in the two most western provinces continued to increase in 2007. Commercial suppliers in Alberta showed the largest percentage growth in debt outstanding, with a 15.3% gain over 2006. Those in British Columbia recorded an 11.6% increase.
The only other province in which outstanding business debt increased faster than the national average of 11.4% was Ontario (+14.0%).
Commercial suppliers in Prince Edward Island reported an 18.5% reduction in business debt in 2007, the largest decline.
Table 2
Outstanding business debt, by province and territory
Highest market share held by real estate, rental and leasing sector
Outstanding debt in the real estate, rental and leasing sector amounted to nearly $66.1 billion. In 2007, this accounted for 13.4% of total outstanding debt in the country, the highest market share, up from 11.7% in 2006.
Table 3
Outstanding business debt, by industry
Market share rose in several other sectors, but at a slower pace.
Outstanding debt in the finance and insurance sector amounted to $48.7 billion, which accounted for 9.8% of the total, up from 8.1%.
The construction sector represented 8.4% of total outstanding debt, up from 7.2%. Market share edged up in the information and culture sector, and in the utilities sector.
Smaller firms continuing to lease
Total lease amounts outstanding in 2007 increased 14.5% to $25.3 billion. Unlike the debt financing sector, outstanding leases of smaller firms amounted to $16.4 billion, up 9.3%.
While still relatively small, outstanding lease amounts in the agriculture sector more than doubled (+118.1%) to $1.3 billion. Outstanding leases in the retail sector also nearly doubled to $1.9 billion.
The highest overall leases outstanding in 2007 continued to be in the construction and transportation and warehousing sectors, with values of $4.0 and $5.1 billion respectively.
Consult our website for summary data tables for 2007. A complete set of data tables is available from Industry Canada's website (http://sme-fdi.ic.gc.ca).
Definitions, data sources and methods: survey number 2514.
For more information, or to enquire about the concepts, methods or data quality of this release, please contact Sam Neofotistos (613-951-4875; sam.neofotistos@statcan.gc.ca) or Jason Leonard (613-951-5593; jason.leonard@statcan.gc.ca), Industrial Organization and Finance Division.
