The Canadian economy just got another warning—businesses are closing at one of the fastest rates on record. Statistics Canada (StatCan) data shows business closures surged in January. The sharp uptick in closures has left the country with the fewest businesses in over two years.
Canada Saw 1 In 20 Businesses Close Their Doors In January
Canadian business closures.
Source: StatCan; Better Dwelling.
The data reveals 46.9k businesses shuttered in January, up 4.5% (+2k) from last year. This marks the third-most closures since the start of the pandemic. The closure rate climbed to 5.0%, meaning 1 in 20 businesses shuttered in the month.
The agency notes closures were broad-based, but one industry took a severe hit—Transportation & Warehousing. The segment represented nearly a third (32.1%) of all closures, an odd data point considering the same industry drove the latest real GDP gains.
The business opening rate was unchanged at 4.9%, helping to offset net closures. Although it was close to the closure rate, don’t let that soften the impact. This still implies significant churn and lost productivity, which the total business count obfuscates.
Canada Has The Fewest Businesses Operating Since 2023
Canadian active businesses.
Source: StatCan; Better Dwelling.
Canada hasn’t seen its active business count grow much in the past couple of years, but even the modest gain was wiped out. There were only 936.2k active businesses in January, down 0.2% (-2.0k) from last year. This marks the lowest number in the country since December 2023, rolling back more than two years of growth in a single month.
The picture of Canada’s economic health is muddled these days. Concrete data points like business closures, insolvencies, and job vacancies are weakening. However, more abstract measures like real GDP that rely on inferred data and modelled deflators show growth continues to beat economists’ expectations.
How do any businesses stay open with the rental bubble and property taxes? This is typical of a bubble, and it gets a lot sadder before it gets better.
The “upzoning” hit whereever you live too? Nothing like a small business suddenly getting the tax bill of a 40 story tower because some 20 y/o incel in planning is a rube impressed by tall things.
Happened in the 90s when home prices were 3x income. Now that leverage is 7x, I have my doubts things can/will bounce back as fast as it once did.
Socialism/Communist states drive away businesses
Do you realize that what is happening is a result of an artificially supported economy and housing prices created by capitalism and NOT “Socialism/Communism”??? Read the room better…
Reminds me of Roncy in Toronto. Politicians perpetually shut down that street for repairs, eliminated parking, then shut it down to raise the curbs for bike traffic. Perpetual turnover because the rents aren’t commensurate with the traffic.
Agree that unfettered expansion of govt jobs is one DIRECT cause, but the BASE cause is rising entitlement/spoiled/financially ignorant and irresponsible last decades of those entering supposed adulthood….and the boomers that raised them to be that way….who thought all this profligate, unmonitored spending, both personally and by 3 levels of govt. was just fine!
‘Shirtsleeves to shirtsleeves in 3 generations’