Canadian Occupational Projection System (COPS)

NAICS 5411; 5412; 5416; 5418; 5419

This industry comprises establishments that provide highly specialized business services. It is composed of five segments: legal services (26% of production and 23% of employment in 2021); accounting, tax preparation, bookkeeping and payroll services (25% and 28%); management, scientific and technical consulting (25% and 22%); advertising and public relations (10% and 15%); and other professional, scientific and technical services such as photographic, translation and veterinary services (14% and 13%). Overall, the industry employed 718,100 workers in 2021, mostly concentrated in Ontario (43%), Quebec (22%), British Columbia (14%) and Alberta (12%). The workforce is characterized by a majority of women (60%), a high level of education, and a large proportion of self-employed (33%). Given the wide variety of activities, key occupations (4-digit NOC) include a mix of:

• Financial auditors and accountants (1111)
• Lawyers and Quebec notaries (4112)
• Professional occupations in business
• management consulting (1122)
• Accounting technicians and bookkeepers (1311)
• Legal administrative assistants (1242)
• Paralegal and related occupations (4211)
• Professional occupations in advertising,
• marketing and public relations (1123)
• Photographers (5221)
• Animal health technologists and veterinary technicians (NOC 3213)
• Business development officers and marketing researchers and consultants (4163)
• Translators, terminologists, interpreters (5121)
• Natural and applied science policy researchers, consultants and program officers (4161)
• Veterinarians (3114)
• Other business services managers (0125)
• Graphic designers and illustrators (5241)
• Advertising, marketing and public relations managers (0124)
• Financial managers (0111)
• Mathematicians, statisticians and actuaries (2161)
• Agricultural representatives, consultants and specialists (2123)
• Sheriffs and bailiffs (4421)
• Forestry professionals (2122)

The industry strongly relies on the performance of the domestic economy and is largely driven by business activities and government expenditures. Corporate profitability is also a key driver of growth as higher profits mean more discretionary income to spend on legal, consulting and advertising services, often perceived as non-essential activities. Although the industry is mostly oriented toward the domestic market, it is also sensitive to foreign economic conditions since the clientele comes from various businesses, some of which are heavily reliant on foreign demand. After being negatively impacted by the recession in 2009, the output slowly recovered in the following three years, before expanding at a solid pace from 2013 to 2019. During that period, the industry benefited from several factors, including additional growth in corporate profits; robust demand for legal, accounting, consulting and advertising services in response to the growing number of businesses that chose to outsource internal operations; a rising volume of mergers and acquisitions; and strong growth in digital advertising spending. The convergence of international accounting standards and the growing international footprint of Canadian financial institutions have also supported growth in exports of accounting services, while a weaker Canadian dollar (following the oil price shock of 2014-2015) has allowed domestic consultants and advertisers to be more competitive on foreign markets.

However, the industry’s output fell back in 2020, in line with the decline observed in domestic and global economic activity during the first year of the COVID-19 pandemic. All segments of the industry were severely impacted, with the exception of accounting services which are less sensitive to cyclical fluctuations in economic conditions. The output strongly rebounded in 2021, up by 8.4%, primarily driven by a substantial jump in corporate profits and by the accumulation of a pent-up demand for legal and consulting services. The resulting pace of growth in real GDP averaged 2.7% annually for the entire period 2012-2021, with gains in output evenly split between employment and productivity growth. Employment rose at an average pace of 1.4% per year, recording most of the increase from 2015 to 2021, while productivity grew by 1.3% annually, reflecting rapid advancements in cognitive technologies. Indeed, routine cognitive tasks have been increasingly automated and performed by technology, while non-routine cognitive tasks have been increasingly complemented and enhanced by technology. For example, tasks related to data entry, tax preparation, legal research and translation are being increasingly performed by online applications and specialized software, while artificial intelligence and machine learning are complementing high-skill jobs related to professional and consulting services.

Over the projection period, output growth in the industry is expected to moderate relative to the period 2012-2021, primarily reflecting the slowdown anticipated in overall economic activity in the short term. After growing by an additional 2.3% in 2022, the output is projected to increase at a slower pace in 2023-2024 as high inflation and rising interest rates are expected to restrain growth in final domestic demand and business activity, resulting in lower corporate profitability. Once inflation returns to its target rate of 2%, output growth in the industry should improve modestly, supported by some cyclical recovery in business activity. Over the longer term, growth in output is expected to be in line with overall economic activity. The industry will continue to benefit from the growing trend in business-to-business outsourcing in order to increase operation efficiency, particularly from manufacturing firms which are more likely to be exposed to fierce competition from low-cost countries. Demand for legal and accounting services is expected to be stimulated by the rising complexity of corporate regulations and auditing practices, the increased frequency of cyber attacks and fraudulent activities, and the growing number of mergers and acquisitions. Consulting firms are also becoming increasingly prevalent in fields such as human resources management, environmental solutions and technology implementation. They are expected to benefit from increased spending in a variety of infrastructure projects as well as from the federal government’s 2030 Emissions Reduction Plan. Demand for advertising services is expected to be stimulated by the use of big data in better understanding consumer behaviour, new advertising streams enhanced by mobile and video technologies, and the growing area of social media strategies. Artificial intelligence and machine learning can be leveraged by the different segments of the industry to solve increasingly complex business problems, potentially driving new lines of business.

There is also some potential to increase exports of professional services as demand for Canadian expertise is growing rapidly. While the relatively low value of the Canadian dollar is expected to maintain price-competitiveness, particularly with the United States, the mutual recognition of professional qualifications under the Comprehensive Economic and Trade Agreement (CETA) is expected to enable professional service providers to bid on service contracts within the European market. On the negative side, many firms are exposed to risks involving revenue volatility and client retention, as the loyalty of clients is often tied to particular employees. On average, the industry’s real GDP is projected to increase by 2.0% annually over the period 2022-2031. Despite slower output growth relative to the past ten years, employment growth is expected to accelerate marginally, averaging 1.7% per year, a result of weaker gains in productivity (+0.3% annually). The weaker pace of growth in productivity essentially reflects three years of negative or anemic growth at the beginning of the projection period. Starting in 2025, productivity growth is expected to resume and be more in line with its historical trend, which will also result in more moderate gains in employment for the rest of the projection period. That said, given the labour-intensive nature of the industry, highly educated individuals will continuously be needed for the rigorous analysis and face-to-face interactions.

Real GDP and Employment Growth Rates in Legal, Accounting, Consulting and Other Professional Services

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.