Canada Just Saw 1 In 20 Businesses Close In A Month, Biggest Wave Since Pandemic

Canada’s reputation as an ideal environment may be more hype than reality these days. Statistics Canada (Stat Can) data shows businesses suffered a major setback in June. The country saw the largest wave of business closures since the depths of the 2020 pandemic, when lockdowns physically restricted businesses from activity. In just one month, Canada saw enough businesses shutter to reverse more than a year of progress. 

Canadian Businesses Are Closing Like A Pandemic Just Kicked Off

Canadian businesses are shuttering at a breakneck speed. Seasonally adjusted data shows 46,354 businesses closed in June, marking the largest wave in exactly 4 years. That’s right, the current environment is so rough that businesses are responding like 2020 pandemic lockdowns just kicked off.

The closure rate (share as a total) also set a similar pandemic record. The rate climbed 0.2 points to 5.0% in June, meaning 1 in 20 businesses closed their doors for good last month. If that sounds high, that’s because it is—the highest rate since June 2020. 

Even more disturbing is the fact this issue is now widespread. Stat Can observed closures across industries, noting it was a broad issue. They did note that construction and retail were slightly ahead of the pack. This highlights how weak households are these days, since both industries should have seen a large boost just by sheer population growth.

Canada Just Saw 1 In 20 Businesses Close In A Single Month

The opening vs closing rate of businesses across Canada. The rate is determined as a share of total active businesses at month end. 

Source: Statistics Canada. 

Canadian Business Opens Are Falling Sharply As Consumer Demand Weakens

At the same time, fewer Canadians are starting a new business. Monthly business openings fell 8.6% (-3,746) to 39,482 businesses in June. It was the slowest month for new businesses since March 2023, and one would assume the reason for closures is also holding back budding entrepreneurs. 

The opening rate, openings as a share of total active businesses, was also much weaker than usual. The rate fell 0.4 points to 4.2% in June, marking the weakest rate since August 2021. Once again, the weakness was observed across all industries, with construction and retail showing a slightly faster erosion.

Canadian Business Closure Wave Saw Over A Year of Gains Wiped Out Over 30 Days 

More business closures and fewer openings means a decline in total businesses in Canada. The net balance of openings and closures reduced active businesses by 1% (-9,037) to 929,173 in June. This is the lowest number of active businesses since April 2023, meaning a single month wiped out over a year of gains for the Canadian economy. Ouch. 

Canadian businesses are closing at one of the fastest clips in history—a rate not seen since they were locked down by a pandemic, and physically restricted from doing business. That doesn’t bode well with the rising unemployment rate, elevated even higher for young adults. It also seems to conflict with the narrative of a strong economy that’s the envy of other G7 countries.

23 Comments

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  • Trader Jim 1 month ago

    That sounds like good news for unemployment. You know, since a handful of big companies need billions in tax dollars to operate and SMBs are just rich people committing tax fraud according to the gov. M

    • Raj 1 month ago

      The difference between the Canadian and US economy. Canada has expensive houses, and needed to give state backed mortgages for 55 years to developers borrowing at the gov rate.

      The U.S. small biz boom has just been adding wealth over the past few years, even when rates were inflated.

  • don smith 1 month ago

    Property prices drop. People feel poorer, stop buying and save cash. Less business, more unemployment, fewer customers again, particularly for expensive vehicles and property etc. Property prices drop more. Its a spiral downward, not unexpected. Might be just starting.

  • [email protected] 1 month ago

    Build your businesses in the USA. Ten times the population and ten times the opportunities to strike it rich.
    Canada is doomed.

  • Amatsi 1 month ago

    Canada us facing a recession.manipulation of thecpi and gdp to keep us slightly over 0 doesn’t mean that the economy is not in a recession, since our cpi rate called to measure massive house price inflation since 2015?
    So, what will happen now is the economy will continue to suffer till this govt is removed,and much if their policies cancelled. Canada strong economic outlook is mainly based on strong energy and resources prices, the opening g of the Taxation pipeline is generating 18B per year in revenue alone.
    If we could find a balance between resource production and green like Norway, we wouldbe set. Trudeau couldn’t find his way out of a paper bag and needs to be gone.

    • So K 1 month ago

      You are in for a massive surprise if you think a liberal government will be removed with a recession at hand. When the economy is going down the gutter, people vote for whoever promises to expand credit and spending massively to kick the can further down the road. Conservatives cut and kill spending, reduce immigration and add to further job losses and no one likes that in a recession.

      Yes, Trudeau sucks, but if the conservatives want a chance to replace him, they better come to the table bearing lots of gifts.

      And remember that cliche…”It is always the economy, stupid.”

      • Dee Bee 1 month ago

        Yeah… So K, I don’t think all Canadians are that stupid. Everyone knows that a Conservative Gov’t is needed now more than ever, and that there will still be an uphill battle even after they get into power. Nonetheless, its the right thing to do. It will be like giving medicine to a child. They don’t want it because it tastes bad, but it’s good for them. We have had a period of too much Liberalism in the federal government. Time for a change. Change is good! Everyone knows that. Let’s Go!

  • Stu 1 month ago

    Particularly if you’re a retail business with reduced footfall operating close to breakeven, if you haven’t been able to pay off your CEBA pandemic loan before it started charging interest that might tip you over the edge into shuttering.

    People talk about government stimulus of the economy in Canada but this is a pretty clear case of stimulus going into reverse.

  • Cardinal Fang 1 month ago

    No adults in Ottawa…..

  • Doomcouver 1 month ago

    Just more evidence that expensive housing has sucked most of the productive capacity out of the Canadian economy. Why invest in a factory or opening a retail store when you can shove all your money into 10 micro-condos? This isn’t sustainable and massive asset deflation is the inevitable result.

  • Ronald Puri 1 month ago

    As long as Justin Trudeau is in Ottawa there is hope. He is EXTREMELY intelligent and will turn Canada around.
    Canada MUST remain strong and MUST increase temp foreign workers and international students.

  • Brubble 1 month ago

    Let them eat cake!

    • Steve 1 month ago

      Seems to me someone said that a couple of hundred years ago and literally lost her head over it. Will we see history repeating again soon?

  • So K 1 month ago

    If the government wants to keep saving the real estate industry at any cost, then let them make tuition, food, education and transportation completely free of cost. 100% tax credit for all of these expenditures.

    We can then gladly spend our entire wage servicing mortgages and rent. There is your solution to the housing crisis. Everyone is happy.

  • Gordon Wilson 1 month ago

    We are over taxed, Also many up to their necks in debt.
    People cant spend as they used to on Resturants 2x what they were, taxes and 20 % tips lol . Frivilous things like concerts 300.00 for 2 hours of music and 20.00 beer. Its reached the point of doom. Better to stay home amd drink 30 00 wine than 100 bucks plus tx & tip your up to 130.00 for that same 30.00 wine. We have no more tfust in Government either they are all liars and crooks.

  • Craig 1 month ago

    Rent and Food and Utilities should be 100% tax deductible. Anything workers have left over… which isn’t much, nowadays, for the average Canadian… can be taxed.

  • A matsig 1 month ago

    Lets be clerar, there are 3 very strong reasons not to be in business in Canada:
    1. high cost of rent, staff, payroll, insurance, etc.
    2. high cost of taxes, particularly municipal, and federal taxes and compliance
    3. consumers who have everything tied up in their homes, and rely on credit for living expenses.
    Trudeau seems to think as long as he can keep housing prices high in the the 401 he can win seats there? The problem is at the 3rd least affordable city on earth, with an economy on life support (consider that the provincial and Federal govts have created virtually all of the jobs in the GTA since 2022 with tax dollars, and you have a hostile business environment.

  • Jody K 1 month ago

    People please understand this was done to us. The Government loans after the pandemic, were not meant to save us, they were to squash us. The following carbon tax was to put the nail in the coffin. They all lined there pockets good.
    The results will not be in their favor. They are about to find that out right about now.

  • JABC 1 month ago

    Please share to us the main factors that affect this behavior in businesses.

  • Frani 1 month ago

    Feds have held back paying out the carbon rebate for small businesses and even now they jave nit gotten a red cent. When they’re closed for good, no need to pay a business that no longer exists. Dirty pool, dirty tactics as thousands of people lose everything they’ve worked to build including homeowners. This regime is out of control overspending eliminated the middle class and millions of ppl to foodbanks. The economy is in the tanks and badly damaged. We need reform. And the small businesses need to start a class action lawsuit to recover money they were promised and never received.

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