What is the impact of women on the Canadian economy?
Posted: Tue Dec 10, 2024 6:59 am
On the occasion of International Women's Day, we wanted to highlight and celebrate the multiple and indispensable roles of women in the Canadian economy.
Although gender equality has not yet been achieved in the Canadian economy, significant progress has been made in recent decades. Women are increasingly contributing to productivity gains, consumption, investment and, ultimately, to improving the well-being of all Canadians.
Let's look at some facts and figures that illustrate the significant impact Canadian women have on the economy.
Women are a growing force in the workforce
Over the years, the participation of women in the Canadian workforce has continued to increase.
The activity rate of women aged 25 to 54, which was 52.3% in 1976, reached a record level of 85.7% in September 2023.
The gap between the employment rates of men and women has also continued to narrow. It reached its lowest level in the fall of 2023, when the employment rate for men aged 25 to 54 stood at 87.5% , compared to 81.7% for women, a slight difference of 5.8 percentage points.
Increasing women's employment rates has not only helped improve their financial independence and reduce their risk of poverty, it has also benefited the Canadian economy. Promoting the integration of underrepresented groups into the labour market provides businesses with a larger and more diverse workforce and helps reduce reliance on many costly social programs.
Women are responsible for 75-80 % of consumer spending self employed database through their purchasing power or influence (approximately $ 1.2 trillion in 2023).
They make most of the important decisions regarding household expenses.
Women make up more than half of the population but wield much greater economic power.
Consumer spending drives the country’s economic growth. Yet, women are responsible for 75 to 80 percent of consumer spending through their purchasing power or influence (an estimated $ 1.2 trillion in 2023 ). In households, women are considered the decision-makers for nearly all spending on furnishings, vacations, and homes, as well as the majority of auto and consumer electronics purchases.
This influence on purchasing decisions is partly due to the fact that women continue to perform the majority of unpaid household tasks, regardless of whether they have children or are married. In Canada, it is estimated that women do 50% more housework than men. This unpaid work is valued at nearly $ 490 billion .
Women are paid less and do not move up the ladder as much as men
Unfortunately, while more women are working outside the home, they remain underrepresented on boards and in corporate leadership. In Canada, women represent only 20% of board members and 24% of senior executives .
Women also continue to earn less than men. For every dollar earned by men, women earn an average of 87 cents .
Although women are increasingly participating in the economy and completing college at higher rates than men , they still do not seem to have the same access to economic opportunities. This disadvantage has a direct impact on their financial security and well-being.
Canada needs more women entrepreneurs
Additionally, women of all backgrounds are underrepresented among entrepreneurs.
In 2023, 1.2% of women were entrepreneurs, while the Canadian population average was 2.3%. This means that Canada would need approximately 182,000 additional women entrepreneurs to bring the entrepreneurship rate up to the national average and another 185,000 to reach parity with their male counterparts. 1
In other words, the current number of female entrepreneurs would have to almost triple for the rate of female entrepreneurship to be equal to that of men in Canada.
The gap between male and female entrepreneurship rates in Canada
Gap between male and female entrepreneurship rates
Enlarge image
Canada also lags behind its southern neighbour in the number of businesses owned by women. Currently, less than 18% of private sector businesses in Canada are majority-owned by women. In the United States, an estimated 40% of businesses are owned by women.
Funding is also lagging. Even though women-led startups generate 10% more cumulative revenue over five years, they don’t get the same financial support. In fact, since 2016, women-led startups have received only 4.4 % of venture capital deals in the United States. These companies have raised only about 2 % of all capital invested. 2
A missed opportunity
The Canadian economy would benefit from more women entrepreneurs.
For example, revenues of women-owned businesses grew about four times faster than the national average in 2023 (6.4% vs. 1.7% ) . These businesses are also more innovative: 30.6% of women-owned businesses report implementing at least one type of innovation, compared to 27% of men-owned businesses. Women entrepreneurs also tend to focus more on diversity and inclusion .
It is no coincidence that the theme of this year's International Women's Day is "Investing in Women: Accelerating Progress."
Closing the gender gap doesn't just benefit women. It's smart economics. Ensuring women's full participation in the economy could add up to $ 150 billion to the Canadian economy .
Continuing progress on gender equality is one way to improve Canada's economic prosperity, particularly in the current context of declining productivity.
We all have a role to play in this. We need to support each other. We need to buy and recommend products and services from women-led businesses. We can offer support and mentorship to our female colleagues who are considering starting a business or seeking career advice. And collectively, we can push for greater gender equality in hiring, salaries, boardrooms and funding.
Although gender equality has not yet been achieved in the Canadian economy, significant progress has been made in recent decades. Women are increasingly contributing to productivity gains, consumption, investment and, ultimately, to improving the well-being of all Canadians.
Let's look at some facts and figures that illustrate the significant impact Canadian women have on the economy.
Women are a growing force in the workforce
Over the years, the participation of women in the Canadian workforce has continued to increase.
The activity rate of women aged 25 to 54, which was 52.3% in 1976, reached a record level of 85.7% in September 2023.
The gap between the employment rates of men and women has also continued to narrow. It reached its lowest level in the fall of 2023, when the employment rate for men aged 25 to 54 stood at 87.5% , compared to 81.7% for women, a slight difference of 5.8 percentage points.
Increasing women's employment rates has not only helped improve their financial independence and reduce their risk of poverty, it has also benefited the Canadian economy. Promoting the integration of underrepresented groups into the labour market provides businesses with a larger and more diverse workforce and helps reduce reliance on many costly social programs.
Women are responsible for 75-80 % of consumer spending self employed database through their purchasing power or influence (approximately $ 1.2 trillion in 2023).
They make most of the important decisions regarding household expenses.
Women make up more than half of the population but wield much greater economic power.
Consumer spending drives the country’s economic growth. Yet, women are responsible for 75 to 80 percent of consumer spending through their purchasing power or influence (an estimated $ 1.2 trillion in 2023 ). In households, women are considered the decision-makers for nearly all spending on furnishings, vacations, and homes, as well as the majority of auto and consumer electronics purchases.
This influence on purchasing decisions is partly due to the fact that women continue to perform the majority of unpaid household tasks, regardless of whether they have children or are married. In Canada, it is estimated that women do 50% more housework than men. This unpaid work is valued at nearly $ 490 billion .
Women are paid less and do not move up the ladder as much as men
Unfortunately, while more women are working outside the home, they remain underrepresented on boards and in corporate leadership. In Canada, women represent only 20% of board members and 24% of senior executives .
Women also continue to earn less than men. For every dollar earned by men, women earn an average of 87 cents .
Although women are increasingly participating in the economy and completing college at higher rates than men , they still do not seem to have the same access to economic opportunities. This disadvantage has a direct impact on their financial security and well-being.
Canada needs more women entrepreneurs
Additionally, women of all backgrounds are underrepresented among entrepreneurs.
In 2023, 1.2% of women were entrepreneurs, while the Canadian population average was 2.3%. This means that Canada would need approximately 182,000 additional women entrepreneurs to bring the entrepreneurship rate up to the national average and another 185,000 to reach parity with their male counterparts. 1
In other words, the current number of female entrepreneurs would have to almost triple for the rate of female entrepreneurship to be equal to that of men in Canada.
The gap between male and female entrepreneurship rates in Canada
Gap between male and female entrepreneurship rates
Enlarge image
Canada also lags behind its southern neighbour in the number of businesses owned by women. Currently, less than 18% of private sector businesses in Canada are majority-owned by women. In the United States, an estimated 40% of businesses are owned by women.
Funding is also lagging. Even though women-led startups generate 10% more cumulative revenue over five years, they don’t get the same financial support. In fact, since 2016, women-led startups have received only 4.4 % of venture capital deals in the United States. These companies have raised only about 2 % of all capital invested. 2
A missed opportunity
The Canadian economy would benefit from more women entrepreneurs.
For example, revenues of women-owned businesses grew about four times faster than the national average in 2023 (6.4% vs. 1.7% ) . These businesses are also more innovative: 30.6% of women-owned businesses report implementing at least one type of innovation, compared to 27% of men-owned businesses. Women entrepreneurs also tend to focus more on diversity and inclusion .
It is no coincidence that the theme of this year's International Women's Day is "Investing in Women: Accelerating Progress."
Closing the gender gap doesn't just benefit women. It's smart economics. Ensuring women's full participation in the economy could add up to $ 150 billion to the Canadian economy .
Continuing progress on gender equality is one way to improve Canada's economic prosperity, particularly in the current context of declining productivity.
We all have a role to play in this. We need to support each other. We need to buy and recommend products and services from women-led businesses. We can offer support and mentorship to our female colleagues who are considering starting a business or seeking career advice. And collectively, we can push for greater gender equality in hiring, salaries, boardrooms and funding.