This piece is a guest contribution, published as part of the Dais’ commitment to being Canada’s platform for bold ideas and better leadership. The views expressed are those of the authors and do not necessarily reflect the positions of the Dais or its staff.

Guest authors

Graham Lowe
Karen Hughes
Frank Graves
Jim Stanford

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Assessing and Improving Job Quality Among Canada’s Self-Employed

By: Graham Lowe, Karen Hughes, Frank Graves, and Jim Stanford

Canada has reached a historic hinge point in its economic growth strategy. Reliance on exports to the U.S. market as the key driver of investment and development is no longer sufficient. Even if a negotiated resolution to President Donald Trump’s tariff attacks can be reached, the uncertainty and risk created by his actions will undermine confidence in Canada’s export industries for years to come.

While developing alternative export markets (in Europe and Asia) is now more important than ever, it is also clear that nurturing the domestic, non-traded side of Canada’s economy will play a key role in responding to Trump. This will include strengthening interprovincial trade links, building needed infrastructure, and addressing key domestic priorities like affordable housing.

In effect, we are seeing a historic pivot toward the domestic economy. After all, close to 80 percent of Canada’s GDP never crosses a border: it is produced and used right here at home. And in that pivot, supporting more and better self-employment can play a vital role. Most small businesses are oriented around serving domestic customers (both other businesses and final consumers). Reversing recent declines in self-employment, and supporting better quality of work for the self-employed, can thus serve as an important component of an overall made-in-Canada economic vision.

We have documented both the opportunities and the challenges associated with self-employment in Canada, through a unique research project: the Shaping the Future of Work in Canada Survey. This survey was first conducted in 2022 by EKOS Research Associates. A subsequent follow-up survey of 2642 randomly selected Canadian workers further documented the labour market’s adaptation to various shocks and challenges—including the pandemic, and subsequent inflation and high interest rates. Among other findings, our research shed new insight on the motivations, benefits, and barriers to good self-employment.

According to Statistics Canada’s Labour Force Survey, the incidence of self-employment has declined since the pandemic by about 1.5 percentage points, with roughly 13% of workers being self-employed today. Various factors may account for this drop, including the financial impact of the COVID-19 pandemic on small businesses. Moreover, this downward trend also likely reflects the traditional counter-cyclical relationship between self-employment and waged employment: whereby the self-employment rate tends to fall when conditions in the market for waged employment are strong (since well-paying waged jobs are more accessible).

Looking beyond that quantitative trend, however, it is important to learn more about the current experiences of self-employed individuals. Specifically, how do self-employed workers assess their job quality and opportunities to better utilize their capabilities?

Self-employment can’t be dismissed as ‘gig work’. Indeed, the key paradox of self-employment is it demonstrates clear job quality advantages, despite its slow decline as a career path. We have convincing evidence that self-employment provides clear benefits over many other types of work. What we can’t predict is how artificial intelligence and other new technologies will transform how we work. Yet, our survey data does help to identify future opportunities to ‘be your own boss’.

On most key job quality measures we surveyed, self-employed workers report more positive experiences and better outcomes than employees. These include critical job-quality ingredients of wellbeing, engagement, doing meaningful work, and satisfaction. This despite the wide range of jobs the self-employed perform – from medical offices, IT workers, personal care services, business consultants, accounting, to residential construction and trucking.

At a time of unprecedented change in Canadians’ outlook on the economy and work, public policy should prioritize finding ways to support and encourage more and better self-employment opportunities. These survey results, reinforced by more recent Statistics Canada data, confirm that the self-employed continue to face serious challenges of economic and personal sustainability, despite the documented benefits of self-employment for the personal happiness of the self-employed, and the success of the broader economy.

Assessments of Self-Employment, Job Quality and Health

Our Shaping the Future of Work follow-up survey (conducted in 2023) examined job quality from the self-employed, by asking them to rate their level of satisfaction using a five-category satisfied/dissatisfied scale. Each were asked to report their satisfaction regarding independence at work, how they go about doing their job, ability to do meaningful work, decision-making authority, the nature of their day-to-day work, being treated respectfully by coworkers, opportunities for creativity, their ability to balance work and family, trust, income, job security, their retirement plan, work engagement and job satisfaction. We also asked about their self-reported health. These job features contribute to workers’ overall well-being and job performance.

Of the self-employed we surveyed, a majority were male (59 percent), broadly consistent with the gender breakdown of self-employment in the Labour Force Survey (63 percent). Also consistent with previous research, we find that self-employed individuals are older than the average for the broader labour force. Over half the self-employed in our sample were over 50 years old—with one-quarter 65 years and up. This should be seen as a sign of things to come, as even more older workers choose to remain in the labour market. And it foreshadows the generational succession challenges faced by many small firms.

On most of our survey measures, self-employed workers report more positive experiences and better outcomes than three other groups of workers: full-time employees; part-time employees; and seasonal, term or contract employees.

For example, over 40 percent of those self-employed rate their physical health as very good or excellent, compared to just over 30 percent of workers in the three comparison groups. Their mental health assessment also is substantially higher, with 63 percent of self-employed individuals rating it as very good or excellent. The three comparison groups all score below 50 percent on this measure.

Figure 1 - Assessing and Improving Job Quality Among Canada’s Self-Employed

Figure 2 - Assessing and Improving Job Quality Among Canada’s Self-Employed

When we asked how often they looked forward to going to work – a good measure of work engagement – over 80 percent of self-employed people reported ‘often’ or ‘always.’ Other workers’ engagement was in the 60 to 70 percent range.

When survey respondents were asked their overall job satisfaction – a widely used measure of job quality – the results mirrored what we found for engagement. Again, over 80 percent of self-employed individuals were satisfied or very satisfied, in contrast with other workers, who were in the 60 to 70 percent range.

Figure 3 - Assessing and Improving Job Quality Among Canada’s Self-Employed

However, these levels of engagement and satisfaction only partially translate into overall life satisfaction, regardless of one’s position in the labour market. Just over 60 percent of self-employed people are very satisfied with their life as a whole right now, reporting in the 8 to 10 range on a 10-point scale. Yet this is considerably higher than the three comparison groups among whom only 42 to 44 percent rate their life satisfaction between 8 and 10.

Figure 4 - Assessing and Improving Job Quality Among Canada’s Self-Employed

What are the main advantages of self-employment? For many of these workers, it comes down to the non-economic rewards of work associated with being your own boss. This is clear from the high levels of satisfaction (between 84 and 91 percent) the self-employed have with their independence at work, how they can go about doing their jobs, their authority to make decisions and their ability to do meaningful work.

Satisfaction with the nature of their day-to-day work, opportunities for creativity, and work-family balance are also relatively high (72 to 78 percent). The self-employed are more likely to be well-educated knowledge workers, given their high educational attainment compared to full-or part-time employees (25 percent have a earned a degree above the bachelor’s level).

On the downside, the self-employed are far less satisfied than other workers with their job security and income (63 percent and 58 percent). And they are less satisfied than the three comparison groups with their workplace retirement plan. Most self-employed people, of course, have no access to workplace pensions other than CPP and their personal savings; this lack of confidence in retirement security is accentuated by the fact that self-employed workers, on average, are older and hence approaching retirement more imminently.

Figure 5 - Assessing and Improving Job Quality Among Canada’s Self-Employed

As far as investing in their skills, few self-employed individuals (11 percent) are likely to enrol in a job-relevant education program in the next one to two years. This compares with up to 22 percent of other workers.

Supporting diversity and success amongst the self-employed

Understanding diversity within the self-employed population and addressing specific challenges can help to optimize the benefits of self-employment for more people. This means consideration for professional status, household resources and barriers to inclusion.

For instance, our research finds that self-employed individuals in medium and high-income households report superior returns to work across the board (compared to all other workers), with higher intrinsic and extrinsic job satisfaction, life satisfaction and better mental health.

We see the same pattern for self-employed workers in low-income households with respect to intrinsic work outcomes, including satisfaction with their current job (73.5 percent vs. 62.7 percent for all other workers), independence (84.4 pecent vs. 76.9 percent), and self-reported mental health (57.1 percent vs. 38.0 percent).

An important challenge facing self-employed workers in low-income households is that while their intrinsic rewards are high, their extrinsic rewards lag. For instance, satisfaction with the ability to save for retirement shows a 40 percent gap for self-employed workers compared to all other workers. National and provincial governments could target incomes, pensions, and insurance benefits for the self-employed as investment priorities.

Many policy levers can help to promote self-employment as a viable career path. For example, enhancing the Self-Employment Benefit (SEB) program could provide more individuals financial assistance, counselling and technical advice to start their own business.

Conclusions

Our findings remind us that some workers flow between being self-employed and being a salaried employee over their working lives, and there are benefits to our economy and society when we recognize and support this dynamic.

Training and mentoring through inclusive entrepreneurship training can play a valuable role. Low-interest loans or grants, income stability and insurance programs, and retirement savings incentive programs may make self-employment attractive to more people. And the Canadian economy surely would benefit if business schools prepared more students to be successful entrepreneurs.

Self-employment in Canada has continued to be constrained by macroeconomic pressures, business uncertainty (made all the worse now by Donald Trump’s actions), and the difficult work-life balancing act of small business owners. Total self-employment grew 0.8% in 2024, compared to a 2.1% expansion in the number of waged employees. Self-employment is still 5% lower than it was in 2019 before the pandemic—whereas waged employment has grown by 11%. Despite the heralded growth of gig and platform jobs, the decline in self-employment has been most severe among the most precarious self-employed, the unincorporated: their numbers are 9% lower than 2019. Instability of incomes for self-employed people, and lack of access to most normal workplace benefits (including health insurance and supplemental pensions), further undermine the appeal of self-employment as a career choice. Innovative programs to improve the quality and security of self-employment (such as pooled or portable benefit plans, for example), could further enhance the viability of this important segment of Canada’s labour market.

Our evidence suggests a missed opportunity for Canada. Good self-employment can offer enriching careers for entrepreneurs, and important benefits for the whole economy. And it can play an important supporting role in Canada’s overarching effort to build a more self-reliant national economy in response to the threats emanating from south of the border. Clearly, Canada needs to do a better job of nurturing this important part of the labour market.

About the authors

Graham Lowe is president of the The Graham Lowe Group Inc. a workplace consulting firm, and a professor emeritus at the University of Alberta. Frank Graves is the president and founder of EKOS Research Associates Inc. Karen D. Hughes is a professor in the department of sociology and the Alex Hamilton Professor of Business at the University of Alberta. Jim Stanford is Economist and Director of the Centre for Future Work.

About the survey

The Shaping the Future of Work in Canada Follow Up Survey was conducted using EKOS Research Associates’ hybrid online/telephone research panel Probit. The field dates for the survey were April 25 and May 5, 2023. The margin of error associated with the total sample is +/- 1.3 percentage points, 19 times out of 20. The Survey offers extensive coverage of the Canadian population (i.e., Internet, phone, cell phone) and equal probability sampling. All respondents were recruited by telephone using random digit dialing and were confirmed by interviewers.

Data have been statistically weighted by age, gender and region based on the proportions of employed people from the 2016 census to ensure the sample’s composition reflected that of the actual population of Canada. The research methodology and questionnaire were approved by research ethics boards at the University of Alberta and Toronto Metropolitan University.