Canadian households may be even less confident about the future of the economy than we think. Statistics Canada (Stat Can) data shows active businesses were unchanged in July. In fact, despite a booming population, the country has seen no growth in the number of businesses that operate. With businesses continuing to close at a faster rate than those opening, the problem may intensify as the global economy weakens.
Canada Hasn’t Added Any Businesses In 2024
Canada’s business community continues to show virtually no progress. The country reported 936,904 seasonally adjusted active businesses in July, unchanged from a month before. It was a slight improvement from a drop of 0.2% (-2,000 businesses) in June. It’s a trend that’s become sticky recently.
“… the number of active businesses has not posted a positive growth rate since January,” notes Stat Can.
Technically they’re being generous. Seasonally adjusted active businesses have fallen 0.2% (-1,600 businesses) since January, and the current volume is similar to the number operating in November 2023. Not a crisis per se, but it emphasizes the weakness of households when record population growth is met with virtually no new businesses.
Canadian Business Closure Rate Still Outpaces New Openings
The monthly business opening and closure rate for Canadian businesses.
Source: Stat Can; Better Dwelling.
The rate of businesses opening remains lower than the rate of closures. Stat Can reported an opening rate of 4.45% in July, adding roughly 41,700 businesses in the month. In contrast, the closure rate was 4.45% for the month, with 42,300 businesses closing their doors over the same period. It was the third consecutive month the closure rate came in higher than the opening rate, and things don’t improve until those two flip.
Canada’s business environment isn’t great by itself, but highlights just how weak consumers feel right now. The country managed to add 504k people in the first half of the year, but virtually no growth in active businesses. That a lot of people that required no additional services. Either those population estimates have been significantly inflated or households are poorer than we think.
The 90s housing bubble redux. All income growth is absorbed by those overpriced homes, and expensive homes mean people can’t take risks.
Don’t forget that most of the “wealth” created in the country is tied directly to people’s homes. They’re fine not earning more if their home rises in value, which they then leverage into an investment property. It’s a sh!t show to say the least.
Monopoly effect at play here too. I debt the people, grant cheap credit so the mega companies can capture more people.
The gov WANTS more people working for fewer companies, which is why big companies probably pay less in taxes as a rate than your average mom & pop shop.
I find the assertion that the government wants a concentration of power in a few large businesses to be misguided. The idea that there are no new businesses in Canada because the government doesn’t want them is far from the truth.
The lack of new business formation is largely due to high rents, as landlords attempt to recover losses incurred during COVID. Their attempts to overcharge for spaces make it increasingly difficult for new businesses to get off the ground. Established businesses often pass these costs onto consumers, leading to inflated prices for goods and services. In their greed, many businesses shoot themselves in the foot by raising prices, which drives customers away and reduces overall sales.
When people face these higher prices, they tend to spend less, pushing businesses to the brink. A healthy economy thrives on competition and innovation, and we should be fostering an environment that allows new businesses to emerge and succeed, rather than allowing a few mega-corporations to dominate.
“The country managed to add 504k people in the first half of the year, but virtually no growth in active businesses”. Trudeau and Immigration Minister Marc Miller have no math skills. Not even a new PM will cure these financial blunders. A deep hole has already been dug, affecting decades of taxpayers.
Who pays for parliamentarians’ indexed pensions and a third of the workforce?
They just want newcomers to come here with their life savings to pay rent. Scam!
It’s extremely difficult to build a world brand in Canada; talented people aren’t necessarily risk takers as they are in the United States and we generally ‘play it safe’ by encouraging careers in health care and education; most of which exist within the purview of long term, stable employment with little opportunity for innovation or intellectual growth.
The Federal Government has promised VW $13.2 billion in subsidies if they build a plant in Ontario. Why don’t they just lower the taxes on businesses already established in Canada and let business grow organically? Currently, all the Federal Government is doing is taxing and regulating business to death. It’s so wrong headed that I’m at a loss to explain why this is happening, unless, of course, monkey business is involved.
Justin Trudeau is EXTREMELY intelligent and needs to increase immigration to support house prices. As a homeowner I trust him to protect my house price and make me money.
Yes!Households are definitely a lot poorer than you thought! Tax tax tax!!!
I wonder if they use the fraudulently registered business that exist only on paper as the measure. There is no way businesses remain flat. Just walk down the small business streets and look at the for lease signs.
The fraudulent businesses do count as businesses, but even if there were 10k of them it would barely move the numbers when it comes to net.