Almost half of Canadians will be self-employed by 2020: report

The Canadian labour market is shifting under our feet, the change driven by a generation of workers who are increasingly participating in the gig economy. In an era of Uber and Etsy, Canada is trending towards a more independent workforce, made up of freelancers, temporary workers, and the self-employed.

Statistics Canada data shows there were 2.18 million temporary workers in 2017, representing around 14 per cent of workers overall. It also reveals that temporary jobs are rising at a significantly higher rate that permanent ones. Financial Post reported that an analysis by Intuit Canada predicts that 45 per cent of Canadian workers will be self-employed by 2020.

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Taking on employment outside of a traditional full-time permanent job isn’t always by choice, but those who do choose it are opting for flexibility and independence. This mode of working comes with its own opportunities and challenges. It offers people the freedom to decide how and when they want to work, but comes at the cost of precarious income and job insecurity. On top of that, those who are self-employed are left to sort out their own tax obligations and cover their own insurance needs, like health and dental, employment insurance, and life insurance.

A growing base of on-demand workers also means that employers don’t need to take on as many staff members, a boon for small businesses and start-ups who might not have the cash flow required to keep people on payroll. A study commissioned by BMO Wealth Management found that it’s not just project-based work that is being geared towards temporary workers. Roles that are usually more long-term, like accounting or human resources, have become temporary gigs, too.

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This new landscape of freelance and temporary work leaves some workers vulnerable. With the growing number of self-employed workers, we are seeing attempts at solutions to precarious work, like the basic income pilot program in Ontario which came to an end in March of 2019. Additionally, groups like the Canadian Freelance Union are organizing to advocate on behalf of freelance workers who experience issues around job insecurity or problematic clients.

For many freelancers, being financially secure means consistently procuring new contracts or cobbling together a livable income through multiple odd jobs. Others treat it as a side hustle to boost their income from a full- or part-time job. Plenty of resources have sprung up to meet the needs of an expanding freelance community. Marketplace sites like Fiverr and Freelancer connect freelance workers with people who are hiring for services such as translation, graphic design, digital marketing, or web development.

Being paid on time is another concern for freelance workers, who might find themselves at the whim of the accounting processes of their clients. The use of a bookkeeping service like Freshbooks or Wave can help keep track of your finances, send out invoices and reminders, and accept multiple forms of payment. Some self-employed and freelance workers might even consider registering as a business, or setting up separate financial accounts for their income to better manage their finances — especially if they make taxable sales.

When it comes to tax time, freelancers are responsible for reporting any income from self-employment to the Canada Revenue Agency. To save a potential shock come April, you may want to regularly set aside a portion of your income to cover any income tax you may owe at year-end, as well as your Canada Pension Plan contribution (10.2 per cent of self-employment income for 2019).

Navigating the ins and outs of the gig economy can be a complex endeavour for employers and freelancers. While there is risk, both stand to gain from the changing nature of work, where independent workers are empowered to set their own terms — and can help meet the evolving needs of employers.

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