Carlos Teixeira
Department of Geography, University of Toronto
St. George and Scarborough, Ontario, Canada
cteixeira@idirect.com

Building an ethnic economy in Toronto, Canada (Abstract)

This paper examines the behavior, strategies, and barriers faced by owners of Portuguese businesses in the Toronto Census Metropolitan Area (CMA), Canada. Attention will be focussed on the utilization of community ("ethnic") resources (e.g., family, friends, and community support/ties), and how these resources contribute to the formation, maintenance, and success of Portuguese-owned businesses. Data for the study was obtained from a questionnaire survey that was administered to a sample of 54 Portuguese entrepreneurs in Toronto. Data collected from the questionnaire survey indicate that Portuguese entrepreneurs rely to a large degree on their own community resources – networks of kinship/friendship and community ties – in establishing and running their businesses in Toronto. In this respect, the evidence suggests that Portuguese entrepreneurs are supported by a strong "ethnic" networking which contributes to the success of their ethnic businesses and, ultimately, of the Portuguese "ethnic economy" in Toronto.

Key Words: Portuguese / ethnic entrepreneurship / community resources / ethnic economy / Toronto.

La construcción de una económía étnica en Toronto, Canadá (Resumen)

Este artículo analiza el comportamiento, las estrategias y las barreras puestas por los empresarios portugueses en el Area Censal Metropolitana de Toronto, Canadá.  Nuestra atención se centra en la utilización de los recursos comunitarios ("étnicos", como por ejemplo, las redes familiares y los soportes comunitarios), y la manera en que esos recursos contribuyen a la formación, mantenimiento y éxito de los negocios de propiedad portuguesa.  Los datos para este estudio fueron obtenidos por medio de un cuestionario entregado a 54 empresarios de Toronto.  Los datos recogidos en dichos cuestionarios indican que los empresarios portugueses están vinculdos en un elevado grado a los recursos de su comunidad -redes de confianza y amistad así como vínculos con las comunidades- para establecer y continuar sus negocios en Toronto.  A este respecto, las evidencias sugieren que los empresarios portugueses están sosenidos por una fuerte red etnica que contribuye al éxito de sus negocios étnicos, y en consecuencia, al éxito de una economía étnica portuguesa en Toronto.

Palabras clave: portugueses/ empresa étnica/ recursos comunitarios/ economía étnica/ Toronto

Canada is a country experiencing rapid transformation. In the second half of the twentieth century, Canadian society became a culturally and racially heterogeneous, and its immigrant groups have been major factors in the social differentiation of large Canadian cities (Bourne 1999; Ley 1999). Since World War II, Canadian metropolitan areas have been impacted by important societal trends – economic restructuring; changes in age structure and living arrangements; and immigration – that left their impact upon the social geography of these cities. Today, the Toronto Census Metropolitan Area (CMA) is not only the primary "port of entry" for immigrants arriving in Canada but, as Canada’s largest and most ethnically diverse metropolis, has become a microcosm of the world (Murdie and Teixeira 2000; Frisken et al. 2000).

Immigration has altered Toronto’s social and economic space. In the years following World War II, Toronto became a mosaic of ethnic neighbourhoods – a city of "homelands" – as waves of new immigrants established enclaves with their own "ethnic economies" in which they attempted to reproduce many of the features and traditions that they left behind in their countries of origin. Some groups - such as the Jews, Chinese, Italians and Portuguese - who arrived prior to the 1960s, settled initially in Toronto’s inner city where they built distinctive, culturally compact and institutionally complete ethnic neighbourhoods. In contrast, post-1960 immigrants and refugees - from the Caribbean, Latin America and Africa - have largely bypassed the traditional immigrant reception areas in favor of immediate settlement in Toronto’s "older" suburbs (e.g., Etobicoke, North York and York). For most of these groups there were no pre-existing enclaves to assist their integration into Canadian society. The residential geography of these groups is more diffuse and complex than the settlement patterns of immigrant groups who arrived in Toronto before the 1960s (Ray 1998).

Canadian immigration policy has long acknowledged the importance of immigration as an engine of economic growth. This is particularly the case with small business development, which has been especially strong in Toronto (Hiebert 2000, 1994). The increased "internationalization" of Canada’s population – by 1996, 11% of Canada’s population, and 32% of Toronto’s, were members of visible minority groups - is one of the major trends that have shaped Canada’s cities in recent decades (Kettle 1998; Isajiw 1999). During the period from 1945 until the early 1970s, the leading source countries for Canadian immigrants came from Britain and other European countries; initially Western Europe, and then Southern Europe – particularly Italy, Greece, and Portugal. However, the source countries for immigrants to Canada continued to changed over the decades, and today the leading source countries are Asian. For example, in 1996 Hong Kong, India, China, Taiwan, Philippines, Pakistan and Sri Lanka were among the ten leading countries of origin for immigrants to Canada (Murdie and Teixeira 2000). These immigrants - coming from different parts of the world and arriving under different circumstances; with different economic experiences and unique human capital - make a positive contribution to the Canadian economy through participation in both paid and self-employment. In this context, Toronto’s economy has been undergoing dramatic changes for at least the past two decades. In Toronto, immigrants have become the new "job-makers" through investment and business formation, and they participate in the entrepreneurial sector at a greater rate than those of French or British origin (Rees 1998). Toronto’s diverse immigrant groups are thus a significant economic asset for the city as well for the country as a whole.

While there is evidence that many Canadian companies are not taking full advantage of the opportunities these groups offer in terms of access to the new global marketplace, their enormous potential is undeniable (Taylor 1995; Rees 1998). However, the Canadian literature dealing with the role and impact of ethnic and immigrant groups in Canada’s economy is scant. Few attempts have been made by geographers to study the structure and development of ethnic business among immigrant groups. The purpose of this study is to examine the behavior, strategies, and barriers faced by owners of Portuguese businesses in the Toronto CMA, where most of the Portuguese in Canada are concentrated. Attention will be focussed on the utilization of group resources (e.g., family, friends, and community resources), and how these resources contribute to the formation, maintenance, and success of Portuguese-owned businesses. The main thesis of the paper is that Portuguese entrepreneurs in the Toronto CMA are closely involved in networks of kinship/friendship and community ties, which are instrumental in establishing and running their business.

Theoretical framework

It is widely recognized that the economic contribution of immigrants and their ethnic enterprises are critical elements in the current restructuring of Western economies as well as in the structuring and development at the community level (Waldinger, Aldrich and Ward 1990; Barret, Jones and McEvoy 1996; Light and Gold 2000). However, while some scholars recognize the benefits of immigrant enterprise play – as a bridge promoting upward social mobility of immigrant and ethnic groups – others maintain that it too often projects an image of "exploitation", by restricting immigrants to economically marginal positions (Waldinger 1996; Walton-Roberts and Hiebert 1997; Lo et al. 2000).

Many of these studies addresses the questions of why certain ethnic and immigrant groups concentrate in entrepreneurship; what factors facilitate the phenomenon; and why do some ethnic and immigrant groups do better in business than others? These questions have stimulated considerable theorizing and debate, particularly in the USA ( Light 1972; Bonacih and Modell 1980; Waldinger 1986; Sanders and Nee 1987; Bonacih 1993; Portes 1995; Light and Gold 2000) and Europe (Mars and Ward 1984; Barret, Jones and McEvoy 1996; Rath and Kloosterman 2000; Rath 2000) where most of the research in this field has taken place.

However, this scholarly research has in general: (a) generated little consensus about the determinants and implications of ethnic enterprise; (b) attempted to account for the underrepresentation of visible minorities in ethnic enterpreneurship without giving appropriate attention to the racial discrimination; (c) lacked comparative studies between ethnic groups; (d) largely neglected the role and impact of immigrant women in the ethnic business sector; and (e) remained, for the most part exploratory (Waldinger, Aldrich and Ward 1990; Buttler 1991; Barret, Jones and McEvoy 1996; Ligth and Gold 2000; Rath and Kloosterman 2000).

A number of competing explanations (structural vs. cultural factors) have been brought forward to explain differences in business involvement and success among ethnic and immigrant groups. One explanation is the "blocked mobility thesis" (also known as the "disadvantage theory") which points to racial discrimination and cultural barriers as structural forces that block ethnic minorities advancement in mainstream economic markets, channeling them into entrepreneurship as their primary avenue for economic prosperity (Bonacich and Modell 1980; Reitz 1990; Li 1997). Another explanation is the "cultural thesis" which suggests that ethnic and immigrant groups enter into business because of particular characteristics that promote their success in this sector (Light 1972; Waldinger 1986; Light and Roseinstein 1995).

Waldinger, Aldrich and Ward (1990) addresses the deficiencies in both earlier theories by combining them into a unified model: the "Interactive Model of Ethnic Business Development". With reference to differing levels of participation in entrepreneurship among ethnic groups, the authors conclude that no single characteristic determines differing levels of entrepreneurship. Rather, there exists a complex interaction between the two dimensions – opportunity structures and group characteristics. Thus, the "Interactive Model" represents a synthesis of the three main approaches to the study of ethnic entrepreneurial success: (a) "group characteristics" or predisposing factors and resource mobilization that immigrants bring to their businesses; (b) "opportunity structures", including market conditions and access to ownership; and (c) "ethnic strategies" which emphasize the study of the interaction between "group characteristics" and "opportunity structures".

In Canada, scholarly research on ethnic and immigrant groups has focussed mainly on the process of ethnic assimilation and adjustment to Canadian life, or on the historical development of community organizations and immigrant institutions in the new society (Breton et al. 1990; Isajiw 1999). In contrast, relatively few studies have been made of immigrants’ diverse economic experiences and impact upon Canada’s economy. Also, their experiences have not been utilized in the construction of theoretical models. What literature exists on ethnic entrepreneurship in Canada (e.g., Jones and McEvoy 1992; Marger and Hoffman 1992; Hiebert 1993; Helly and Ledoyen 1994; Razin and Langlois 1996; Juteau and Paré 1997; Teixeira 1998; Qadeer 1998; Wang 1999; Lo et al. 2000) suggests that: (a) not all immigrant groups have attained the same degree of involvement and success in small business; (b) immigrant women and visible minorities tend to be underrepresented in small business; (c) entrepreneurs from some immigrant groups are more likely than those from other groups to specialize in particular sectors or niches of the Canadian economy; (d) immigrant businesses in general are small in scale - often family-owned/operated firms - and are community and ethnically oriented with respect to their clients.

The limited number of Canadian studies – lacking both theoretical and empirical work – prevents a full understanding of why certain immigrant groups concentrate in entrepreneurship, what factors facilitate this phenomenon, and why do some immigrant groups do better in business than others. In particular, little is known about the reasons for visible minorities to be underrepresented in Canada’s business population. At this stage more needs to be learned about the role of ethnicity and race in the Canadian economy. An understanding of the role played by ethnicity and race in Canadian small business is essential to any broader study of immigrant interaction with, and/or integration into, Canadian society.

The Portuguese in Canada

From Cod Fishers to Urban Islanders

Portuguese emigration has been a constant of the life of the Portuguese people, with the Portuguese diaspora today numbering more than four million people (Rocha-Trindade 2000). Economic reasons are frequently cited as the most important "forces" leading Portuguese to leave their country. In the last four decades Europe (particularly France, Germany and Switzerland) was the primary destination for Portuguese emigrants from the mainland. Meanwhile, the "islanders" – whether from the Azores or Madeira – chose different continents for emigration. The Azoreans went to U.S.A and Canada; while Madeirans chose South Africa and Venezuela. Today, the majority of Portuguese living in Canada, as well as in the Toronto area, came from the Azores or are descendants from Azorean families.

Portuguese historical contacts with Canada date back to the fifteenth and sixteenth centuries when Portuguese navigators mapped Canada’s Atlantic coast, and Portuguese fisherman harvested the plentiful fish stocks off Newfoundland’s shores. While Portuguese fisherman and navigators did not settle the land, their presence is preserved today in place names and along the Atlantic coast of Canada: Bacalhaos (Baccalieu island), C. Rei (Cape Ray); Frey Luis (Cape Freels), Ilha Roxa (Red Island), Fogo (Fogo Island), S. Maria (Cape St. Mary’s) and Terra Nova (Newfoundland) – all testimony of the Portuguese presence in the northwestern Atlantic (Teixeira and Da Rosa 2000). This century, with the appearance of the "White Fleet" in the waters of the Grand Banks - off the coast of Newfoundland - Portuguese renewed their presence in this part of Canada and left their mark/legacy in the cultural history of Newfoundland (Collins 2000).

Modern Portuguese immigration to Canada began in the early 1950s. The early Portuguese settlers arrived during the 1950s, when Canada was promoting this immigration in order to meet its need for agricultural and railway construction workers. Sponsorship and family reunification accounted for the acceleration of the process during the 1960s and 1970s. The military coup of April 25, 1974, and the later entrance of Portugal into the European Community – where prospects of a higher standards of living has been evident in the last decades – have played an important role in the tendency of the Portuguese population to remain in Portugal today. This explains, in part, the drastic decreases in Portuguese immigration (particularly from the Azores islands) to Canada.

According to the 1996 Canadian Census, the Portuguese group was numerically one of the most important ethnic groups in Canada (335,110) as well as in the Province of Ontario (231,805) where most Portuguese live today (Tables 1 and 2). Within Ontario, in the Toronto Census Metropolitan Area – we find 161,685 people who declared their ethnic origins "Portuguese". Portuguese was also one of the most frequently reported "non-official" language/mother tongue in the Toronto Census Metropolitan Area (107,800) (Single Responses). The Portuguese language ranked third after Chinese (286,460) and Italian (202,440). Data from "key" leaders of the Portuguese community, including Portuguese authorities in Canada, place the number of Portuguese Canadians (first, second, third generations) today at between 400,000 and 550,000. Of these, approximately two thirds are immigrants from the Azores and/or descendants from Azoreans who arrived in Canada in the last fifty years. However, despite the fact that the Portuguese form an important segment of Canada’s heterogeneous population, the number of empirical studies dealing with this group is limited (see, Teixeira and Lavigne 1998).
 

Toronto: "Port of Entry" and City of "Homelands"

Most Portuguese communities in Canada came into being only at the end of the 1950s. Throughout the years Toronto and Montreal became the most important destinations for Portuguese immigrants. In the case of Toronto, "Kensington Market" - a colorful and important immigrant reception area - became the major "port of entry" for the new Portuguese immigrants arriving in the city. It was within this immigrant reception area that the "First Portuguese Canadian Club", and the first Portuguese - owned businesses in Toronto came into being.

In the beginning, most Portuguese in Toronto were renters and roomers. However, the availability of inexpensive housing in the area was a "pull" factor leading Portuguese to acquire housing in the area. The ultimate dream for Portuguese in Canada was to buy a house as soon as possible in order to accommodate their families. Homeownership became a priority, almost an obsession, and levels of homeownership increased considerably during the years to come (Murdie and Teixeira 2000). Today, the majority of them own their dwelling. In fact, with the Italians, the Portuguese group shows the highest levels of homeownership in Toronto (Carey 1999; Teixeira 2000). For most Portuguese homeownership was a priority; the physical manifestation of a "dream" of economic security for themselves and their families in their new country. The Portuguese, after the Jews, are the most segregated group in Toronto (Dakan 1998). By 1996, most Portuguese in Toronto lived in a relatively tight cluster – "core" (Little Portugal) (Figure 1b). In this area the Portuguese built an institutionally-complete ethnic enclave, comprising most of the community’s social, cultural and religious institutions. Inside this area we also find the two most important Portuguese commercial strips – Dundas and College streets (Figure 1b) - where most of the Portuguese businesses are located.

Today, the Portuguese are a community on the move, and in transition! In recent years, two areas of new Portuguese settlement have emerged: (a) an expansion along the "immigrant corridor" where Portuguese are replacing Italians; and (b) the move to the suburbs, especially to the City of Mississauga (a western suburb of Toronto) (figure 2). This important residential mobility of the community reflects not only Portuguese immigrants’ aspirations to live in better conditions (e.g., to buy a single family dwelling, with a basement and backyard…), but it may also be seen as the result of successful marketing campaigns launched by Portuguese real estate agents (Teixeira 1998). Despite the residential mobility of the community, it appears that this movement has not yet noticeably affected the vitality of the Toronto Portuguese community’s ethnic institutions/services and businesses.

In general, most Portuguese are very satisfied with Canada as a place to live. Even if the wish to return to Portugal for retirement remains a constant "dream" in the lives of the first generation, in fact only a few of them go back "home" (Portugal) to stay. The extended family living in Canada has become for them a major deterrent against their retirement in Portugal and now their ultimate goal is to "die" in Canada – their adopted land!
 

Methodology

Data for the study was obtained in two phases. First, information was obtained through informal interviews with "key" informants (e.g., pioneers of the Portuguese immigration to Canada, journalists, bank managers…), including entrepreneurs and leaders of business and professional organizations of the Portuguese community in Toronto. The wealth of qualitative information that was collected from Portuguese key informants through this exploratory approach/research method was very helpful in acquiring in-depth information about Portuguese participation in entrepreneurship as well as on the numerous challenges they face in today’s competitive business market.

In the second phase, data for the study were obtained primarily from a questionnaire survey that was administered in the summer of 1998 to a sample of self-employed Portuguese entrepreneurs. The study area was the Toronto Census Metropolitan Area (CMA) - the most important destination for Portuguese immigrants and where the majority of Portuguese entrepreneurs operate their businesses (figures 1a and 2). The selection of the sample involved several steps. First, the Portuguese entrepreneurs were identified from an initial list of all members of the "Federation of Portuguese Canadian Business & Professionals". Second, a supplementary list was built from the Portuguese telephone directory (Guia Comercial Português – 1998) which lists almost all Portuguese owned-businesses in the Greater Toronto Area. A total of 302 questionnaires were sent out by mail to Portuguese entrepreneurs. Of this number 54 Portuguese completed the questionnaire.

The majority of the Portuguese entrepreneurs (88.9%) were first generation (born in Portugal). This group of respondents form a homogeneous cultural group that is typical of a relatively recent immigrant group. All respondents were of the same ethnic background, and declared Portuguese as their "mother tongue" (first language they learned as a child and still understand today). Half (51.9%) of these Portuguese arrived in Canada during the period 1954-1969, and the majority (86.0%) emigrated for economic reasons and/or came to join the family. Thus, "sponsorship"/"family reunification" characterizes the type of immigration of respondents. In terms of education, 27.8% of Portuguese did not attend school in Canada, but 29.6% completed high school or university. With respect to the type of businesses Portuguese own – they are still largely confined to the retail sector (38.9%), followed by finance, insurance and real estate (22.2%) and by medical/legal and other professional services (14.8%). Based on my observations as a member of the Portuguese community in Toronto, it seems that the Portuguese ethnic economy has undergone important changes in the last two decades – from a "food"-oriented type of business (e.g., restaurants, grocery, fruit, meat and fish stores), which predominates in the period before 1975, to more "specialized" professional types of businesses today.
 

Survey results

Business establishment – entry methods, location patterns and co-ethnic labour

In the Canadian context, it has been suggested that immigrant groups are attracted to self-employment given the likelihood of greater economic returns that would come from employment (Lo et al. 2000). When asked for the most important reasons for starting their business, 31.5% of Portuguese entrepreneurs mentioned "control of their own destiny" - to be his/her "own boss". Another 22.2% of the respondents mentioned "economic independence" to go into business. However, only 11.1% of the respondents stated "lack of jobs"/unemployment as major "push" factors to start their businesses. Overall, Portuguese were not "pushed’ (forced) into-self-employment by negative job market circumstances. Instead, for most of this group of entrepreneurs, becoming an entrepreneur in Canadian soil was the fulfillment of a "dream" through which economic and social mobility can be attained. Some observed:

"During recessions, immigrants are the first to be laid off and the last ones to be called back… I wanted to have control of my future."

"I didn’t like the idea of spending my life in a plant working as an assembler or machine operator…have a better control of my economic life."

"A dream of doing better economically… As a women it was important to be able to be in business while working after my own children. My own business gave me this opportunity."

Results also indicate that, in general, Portuguese entrepreneurs did not encounter major problems/barriers when establishing their current business. Only 31.5% of the Portuguese interviewed indicated having encountered some barriers such as (a) language problems (lack, or poor knowledge, of English); (b) lack of information about business practices; and (c) problems getting clients. In contrast to the experience and type of barriers that members of visible minorities face in Canada when starting/operating their businesses - (e.g, getting financing and facing discrimination by suppliers and financial institutions) (see Henry 1993, 1994) - Portuguese entrepreneurs did not mention discrimination by the host society as a major problem in establishing their business in Toronto. Thus, the issue of "ethnicity" was not a major barrier for Portuguese entrepreneurs. It seems that Toronto, a city known as one of the most multicultural cities in the world, offers a favorable environment for ethnic ownership.

The expansion of the Portuguese community in the last two/three decades along the "immigrant corridor" and the move to the suburbs (e.g., Mississauga, Brampton, Oakville…), paralleled the steady growth of Portuguese-owned businesses. However, today still the majority of the Portuguese businesses in Toronto are located within a well-defined area known as "Little Portugal". In this particular area of the City of Toronto, the Portuguese built an institutionally-complete community, with a highly visible concentration of businesses – an "ethnic economy" – that primarily serves a Portuguese clientele. As Figure 1b suggests, most of the Portuguese businesses (26 out 54) are located in "Little Portugal". When respondents were asked why did they locate their business where they did, it is not surprising that half of the respondents (53.7%) indicated that proximity to the Portuguese community was the most important reason for selecting their present business location (table 3). Also important was the close location of their businesses/accessibility to public transportation and parking facilities (22.2%), while another 22.2% indicated being a community oriented type of business.
 
 

In general, Portuguese entrepreneurs located their business having in mind the residential patterns/geographical concentration of the Portuguese community and ultimately of their clients. As some entrepreneurs observed:
 

"Our main language is Portuguese, therefore, we are established where the Portuguese community is mostly concentrated."

"It was important to locate in the heart of the Portuguese community [Toronto] and easily accessible to retail customers."

"For a new type of business, I believe it is easier to build and establish a client base in one’s existing ethnic [Portuguese] community."

In recent years, some Portuguese entrepreneurs ventured to locate their businesses outside the "core" of the Portuguese community. For example, a Toronto Portuguese real estate agent, whose clientele was mainly Portuguese, tried to follow the residential mobility of the community along the "immigrant corridor". He explained the reasons behind his move:
 

"Location. Obviously my main market was the Portuguese and the Italian communities. The Portuguese clientele had a preference for buying houses previously owned by Italians [North of Bloor St.]. Since my main homebuyers were Portuguese, my preoccupation was to follow the community and to place my centre of activity accessible to both communities. It was a good start…".

At this stage we can speculate that this characteristic of the Portuguese entrepreneurs to concentrate their businesses in a geographically segregated co-ethnic market is also common to other Southern European groups; particularly the Italians and, to a lesser degree, the Greeks in Toronto (Teixeira 1998). The question as to whether or not Portuguese entrepreneurs would have been – or, in future, will be – able to survive outside the boundaries of the Portuguese community in Toronto remains unanswered.

A defining characteristic of immigrant businesses is their size - generally small in scale – and often family-owned and operated. The majority of the Portuguese-owned businesses (83.3%) are small with respect to the number of people that they employ. They range from "one-person" operations (7.4%) and "family-oriented" (2 to 5 employees) (53.7%) to "medium-sized" firms (6 to 15 employees) (22.2%). However, there are signs that the size of Portuguese businesses increased in the last two decades. Approximately 17% of the entrepreneurs indicated having more than 15 employees working for them. It is important to note that among those entrepreneurs, two indicated having more than 40 people, and another one indicated 180 people; the majority being from the same ethnic background – Portuguese. With respect to the ethnic background of employees, Portuguese entrepreneurs in general employ family members (70.4%) as well as employees from the same ethnic background (87%). Results from this study seem to concur with previous studies in USA and Europe that show that family and co-ethnic labour have traditionally played a very important role in the operation of small ethnic businesses (Waldinger, Aldrich and Ward 1990; Barret, Jones and McEvoy 1996, Light and Gold 2000). Within this context, the ethnicity of employees seem to be a major criteria in the Portuguese entrepreneurs’ decision of who to employ.

The North American literature has shown that reliance on ethnic networks of contacts – kin and friendship – facilitates recruitment of "ethnic" employees (Walton-Roberts and Hiebert 1997: Lo et al. 2000). This seems to be the case with respect to Portuguese entrepreneurs in Toronto. Results show that the majority (84%) relied extensively on "informal channels"; particularly relatives and Portuguese friends (table 4). The use/impact of these "ethnic" channels of information can also lead to the hiring of employees from the same region and/or island of Portugal (see, Teixeira 1998). Portuguese entrepreneurs also rely heavily on "ethnic" sources of information - particularly Portuguese telephone directories (82.6%) and the "ethnic" media (76.1%) - to advertise their businesses. In general, few Portuguese entrepreneurs ventured out their own cultural group/community to get advice on who to hire, and how/where to advertise their businesses.
 
 

In order to explore how advantageous it is for entrepreneurs to hire co-ethnic labour, respondents were asked: how important they felt were employees of the same ethnic background in running as well as in the success of their businesses. In general, Portuguese entrepreneurs displayed a very positive opinion with respect to the importance of having Portuguese employees. Approximately 64% cited Portuguese employees as being "very important" for their businesses. When asked for the major advantages of having employees of the same ethnic background, evidence from table 5 shows that the knowledge of the Portuguese language (85.7%) followed by their client base/Portuguese (40.5%).
 
 

It is a major advantage for Portuguese entrepreneurs to have employees from the same culture and ethnic background, who speak the same language and who can be trusted by their clients. To this, we should add the employees knowledge of the clients’ "cultural" needs and preferences in terms of services and products. For example, on the question of knowledge of the Portuguese language, entrepreneurs noted:

"Language familiarity…my client base is Portuguese. In my field you must understand the Portuguese culture to really be successful in the market."

"It is important to communicate with our clients in our language… It gives them a sense of trust and confidence."

"My business is 90% in the Portuguese community. Having Portuguese people as employees makes our clients very comfortable and happy."

Thus by hiring "insiders" of the group - employees from the same ethnic background and who speak the same language – Portuguese entrepreneurs tried to create a culturally oriented business environment where customers feel at "home!"

Community resources, support networks and the market

This section will examine the community ("ethnic") resources available to Portuguese entrepreneurs, which enable them to act as facilitators and intermediaries in the establishment and operation of their current business.

The existence of strong networks of contacts/kinship among members of the group, are important forces which influenced Portuguese settlement patterns upon arrival – selection of the city/neighourhood as well as finding housing and jobs. Another important characteristic of the Portuguese in Canada, and particularly in Toronto, is their tendency to form highly visible ethnic neighbourhoods and economies. Within this context, the following related question related to the importance of "ethnic" community channels was formulated: "How important are ‘ethnic’ community channels for information and support for Portuguese entrepreneurs in establishing and running their businesses?". We hypothesize that Portuguese entrepreneurs in Toronto rely extensively in dense social networks – kinship/friendship and community ties – which are instrumental for this group of entrepreneurs in the operation of their businesses.

Respondents were presented with a list of possible sources of information which they may or may not have used in starting and operating their current business. Table 6 reveals that Portuguese used a wide variety of sources - ranging from market sources, such as the media and professional organizations, to more specialized community-oriented sources, such as friends and relatives - to obtain information and/or advice about starting and operating their businesses. Approximately 43% of all Portuguese entrepreneurs mentioned ethnic friends and relatives as the most important sources used; non-Portuguese friends were second in importance (13%), followed by the Portuguese media and non-Portuguese organizations at 7.4%.
 
 

Overall, results from 6able 6 indicate that Portuguese entrepreneurs rely extensively on their own community ("ethnic") resources. In fact, 63% of all the sources used by Portuguese entrepreneurs were sources from the same ethnic background. Within this context, Portuguese friends and relatives occupy a central role as important sources in providing information and/or advice about how to start and operate ethnic businesses. These findings lend support to the main thesis that Portuguese entrepreneurs involvement in the network of kinship/friendship and community ties are integral to their business success.

Ethnic sources of information, and particularly Portuguese friends and relatives are key channels to Portuguese entrepreneurs in aspects related to the establishment/operation of their businesses (table 7). Ethnic sources play an important role in recommending clients (56.5%), providing information about the ethnic market (47.8%) or the site to locate the businesses (32.6%). Portuguese entrepreneurs realize how important and effective networks of contact, particularly Portuguese friends and relatives, have been to the operation and success of their businesses. These findings - heavy reliance by Portuguese entrepreneurs on community ("ethnic") resources - echoes earlier research in U.S.A as well as in Europe (Boissevain et al. 1990; Waldinger and Aldrich 1990; Light and Gold 2000).
 
 

The literature has shown that the Portuguese in Toronto continue to exhibit a high degree of group cohesiveness, culture identification, language retention and residential segregation (see, Teixeira 2000, 1998). When entrepreneurs were asked about their degree of participation/membership in Portuguese organizations, not surprisingly the majority (85.2%) declared being "somewhat" or "highly" involved in the social-cultural of the Portuguese community. Also, approximately half of Portuguese entrepreneurs indicated being a member and/or participating actively in the life of their community’s business-professional organizations and socio-cultural associations. In general, the respondents realize the importance and the "benefits" they get from participating in Portuguese organizations. The majority (87%) of Portuguese entrepreneurs underlined the importance of their participation/membership in the "life" of community organizations. Some observed:

"That’s a way of meeting prospect clients and make new friends."

"Contacts/referrals are very important in our business. The organization [Federation of Portuguese Canadian Business & Professionals"] is a good tool to provide this contacts."

"Taking part on [socio-cultural] events or getting involved with these organizations make us known in the Portuguese community."

"[Portuguese organizations] are a network of vital information and contacts with different people, in different types of businesses, and regional cultures [mainland Portugal and the islands]."

Evidence from this study also shows that Portuguese entrepreneurs depend heavily on an ethnic clientele for their market. The majority of the entrepreneurs (71.7%) indicated that more than 50% of their clients were Portuguese. When asked about the high levels of Portuguese clients, approximately 58% of the Portuguese entrepreneurs cited their businesses being "community oriented" as the most important reason for a high proportion (more than 50%) of Portuguese clients. Within this context, it is understandable that it is in the interest of Portuguese entrepreneurs to maintain their "visibility" by maintaining a close contact with the Portuguese community in general, and particularly through their involvement in socio-cultural and religious institutions as well as Portuguese professional organizations.

How successful are Portuguese entrepreneurs and what are their plans for the future? Portuguese entrepreneurs’ self-evaluation indicates that the majority (81.4%) cited being "very successful" or "moderately successful". Among the most important reasons contributing to their business’ success were a good reputation in the community and reliance on the Portuguese market (59.3%) and the location of their businesses (50%) – in and/or around the Portuguese community (table 8). With regard to the future survival of their businesses, Portuguese entrepreneurs showed some preoccupation and uncertainty about it. Only 15 entrepreneurs (27.8%) indicated that their businesses were growing, while another 15 (27.8%) Portuguese mentioned that business is worst than in the past, with no prospects for increasing business in the near future. For some Portuguese entrepreneurs, their pessimism concerning the future of their business was evident. Among the reasons offered to explain this pessimism were: a) the steadily decrease of the Portuguese immigration to Canada in the last 15 years; b) the increasingly integration of the first generation Portuguese into mainstream Canadian society; c) the "generation gap" that exists today in the Portuguese community, with the new generations (born in Canada) relying less on Portuguese services and products; and d) the competitiveness of the ethnic business market, paralleled by the lack of "new" generations of Portuguese entrepreneurs to enter in ethnic businesses.
 

It is not surprising to note that 25 (46.3%) of Portuguese had already made the decision that, once they retire, they will not pass their businesses on their children. Another 33.3% replied "don’t know"; leaving it up to their children to make the decision to go into businesses. Portuguese entrepreneurs are unanimous in recognizing the rewards they receive from ethnic entrepreneurship, but they also recognize the long hours and hard-working that they have to put into their businesses in order to be successful. Within this context, some of the respondents are of the opinion that it is much better for their children to go to the university, get a good education and continue a career elsewhere, outside the ethnic business. Some entrepreneurs indicated they feel that they made a lot of "sacrifices" as immigrants to put their businesses together, and now they strongly believe that their children have more opportunities in terms of both education and jobs. Also, Portuguese entrepreneurs realize that in the near future they should look outside the Portuguese community for the clientele needed to sustain their businesses. For them, overeliance on an ethnic market – as has been the case with the Portuguese entrepreneurs in Toronto – may reduce their profitability and growth in the near future.

In sum, empirical evidence from the study indicates that the Portuguese follow a –community-oriented pattern in establishing and running their businesses. By being highly involved in co-ethnic networks of kinship, friendship and community ties, Portuguese entrepreneurs were able to build, in a relatively short period of time, a highly visible "Little Portugal" in the core of the City of Toronto. If Toronto is known today as a city of "homelands" and "ethnic economies", part of it is due to the dynamic and entrepreneurial Portuguese community who settled in the city only five decades ago!
 

Conclusion

Canada’s ethnocultural groups represent a significant national asset. Within this context, Toronto is Canada’s major "port of entry" for new immigrants, and is today the largest and most ethnically diverse city in this country. The Portuguese group is part of this complex and rich cultural mosaic, and their impact is visible in the physical landscape of Toronto’s "Little Portugal". Here the Portuguese language, culture and businesses have transformed the social geography of the city.

The main objective of this study has been to investigate the extent to which Portuguese entrepreneurs in Toronto relied on "community" resources, and how these resources contributed to the business establishment, maintenance, and success of Portuguese-owned business. With respect to the establishment of the ethnic businesses, results show that in general Portuguese entrepreneurs did not face major barriers/obstacles in starting their businesses, neither were they "pushed" into self-employment because of discrimination faced in the job market and/or because of lack of jobs. Indeed, while language barriers were pointed out as the major obstacle faced, nonetheless becoming an entrepreneur for the majority of them became the realization of a "dream", through which economic and social mobility can be attained.

Since the Portuguese group is one of the most concentrated groups in Toronto, it is not surprising that proximity to the Portuguese community became a priority for this group of entrepreneurs. Findings also indicate that Portuguese businesses are small in size and family-oriented. They also rely extensively on family members and Portuguese employees to run the business. Knowledge of the Portuguese language, familiarity with Portuguese clients’ needs and preferences, and the co-ethnic relationship of "trust" they establish with the Portuguese clients, were all recognized by Portuguese entrepreneurs as major advantages of having employees from the same ethnic background.

With respect to community resources, findings indicate that Portuguese entrepreneurs rely to a large degree on their own community ("ethnic") resources – networks of kinship/friendship and community ties – in establishing and running their businesses. Portuguese entrepreneurs networking is confined largely to their ethnic group/community. Almost two thirds (63%) of all sources used by the entrepreneurs were sources from the same ethnic background (e.g., Portuguese friends, relatives, Portuguese media and Portuguese organizations/institutions). These findings of a strong "ethnic" network that supports Portuguese businesses is also common to other immigrant groups in Toronto (e.g., South Asians, Chinese and Jewish immigrant groups) (Lo et al. 2000; Qadeer 1999; Teixeira 1998; Hiebert 1993).

Due to the lack of studies on ethnic entrepreneurship in Canada, many of the intricacies of ethnic business remain unclear. More comparative studies are needed with respect to immigrant groups - visible and non-visible minority groups - to understand: a) why some groups are more prone to go into business (and be more successful) than others; b) group differences with respect to their reliance on community "ethnic" resources; and c) why some groups are more confined than others to their community than to the mainstream? Given Canada’s policy and tradition of multiculturalism, as well as the significant impact of ethnic businesses within the Canadian economy, more research needs to be done into the forms and functions of ethnic entrepreneurship as defining characteristics of our immigrant communities.
 

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© Copyright: Carlos Teixeira, 2001
© Copyright: Scripta Nova, 2001

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