Business and entrepreneurship are at the heart of economic activity. While some firms and entrepreneurs become enduring economic success stories that may even span multiple generations, many others also animate the continuous cycle of entries, growth and exits. All this is part of what enables our economic resilience, capacity to innovate and overall progress as a nation. Therefore, tracking business and entrepreneurial activity allows us to get a fairly good assessment of Canada’s overall economic health.
CFIB’s Enterprise Pulse aims to provide this tracking through a comprehensive yet accessible picture of the business and entrepreneurial life cycle in Canada, its provinces and its industries. It presents an overview of the continuum of economic activity, from the one-person businesses (self-employed with no employees) to active businesses with employees and the churn within this category (business entries and exits), to the insolvency numbers.
The Enterprise Pulse consists of a quarterly report covering the latest update from the publicly available data, and of an interactive dashboard allowing readers to drill down using tailored visualizations. Scroll down to discover these tools.
Q2 2024
Entrepreneurship in Canada is improving, but still not fully back to pre-pandemic strength
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Highlights
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Self-employed (Q2 2024): Still recovering from the pandemic
Canada’s self-employed have been affected in a major way by the pandemic. From the peak of over 2 million self-employed registered in Q4 2019, the number dropped by about 130,000, or 5%, during the pandemic. It has hovered around 1.9 million since 2021 and it only started trending upwards in the past three quarters. The current (Q2 2024) number of self-employed is similar to what Canada has seen in Q3 2017. However, in Q3 2017, Canada had 529 self employed for every 10,000 people, while currently it has only 479 self-employed for 10,000 people.
Self-employed, quarterly data, Canada
Note: Self-employed data presented quarterly from Q1 2015 to Q2 2024. It includes both incorporated and unincorporated self-employed without employees.
Source: Statistics Canada. Custom tabulation for CFIB.
Self-employed per 10,000 people, quarterly data, Canada
Note: Self-employed data presented quarterly from Q1 2015 to Q2 2024. It includes both incorporated and unincorporated self-employed without employees.
Sources: Statistics Canada. Custom tabulation for CFIB.
Table 17-10-0009-01, population estimates.
Businesses with employees (Q1 2024): Growth is concentrated in three sectors
The number of active businesses with employees has increased in Q1, which is welcome news. However, the current number represents only a 4% increase compared to Q4 2019.
Overall, the number of businesses with employees in Q1 2024 rose by 5,935 on a year-over-year basis. This increase was driven by gains in health and education (1,755), construction (1,196) and hospitality (1,179). On the other hand, some sectors lost businesses over the past year, including wholesale (-971), manufacturing (-373) and transportation (-198). The entire primary sector (agriculture, oil, gas and mining) recorded a drop in the yearly change (-194).
Net change during the past 12 months in the number of businesses with employees, quarterly data
Note: Business with employees data presented as a change between Q1 2023 and Q1 2024.
Source: Statistics Canada.
When population is taken into account, the latest (Q1 2024) number of 230 businesses with employees per 10,000 of population is below the level registered before the pandemic of 240. In fact, the trend of businesses with employees per 10,000 of population has been on a downwards slope in the past 10 years. After the abysmal level of 211 reached in 2020, the number has increased until Q2 2022 when it was back up to the pre-pandemic reading of 240. However, the trend has been following a gradual steeper-than-before 2019 downwards slope. This may be due in part to the rapid population growth since 2022 and in part to the tough economic climate which has seen less business creation.
Businesses with employees per 10,000 people, quarterly data, Canada
Note: Business with employees data presented quarterly from Q1 2015 to Q1 2024.
Sources: Statistics Canada.
Table 17-10-0009-01, population estimates.
Businesses entries and exits (Q3 2023): Net negative for a third quarter in a row
For the third consecutive quarter, the business landscape has been marked by exits surpassing new entries. Although a similar trend was observed in the latter half of 2019 and intensified during the pandemic, the current period, apart from 2020, stands out as particularly challenging for businesses. Since Q2 2020, Canada experienced eight quarters of healthy net business creation. However, the last two quarters of 2022 saw a significant slowdown in net entries, followed by a negative net change since Q1 2023.
Net change, quarterly data, Canada
Note: Net change = [Business entries] - [Business exits]. Net change data presented quarterly from Q1 2015 to Q3 2023.
Source: Statistics Canada.
Businesses insolvencies (Q2 2024): Bankruptcies and proposals remain high
Business insolvencies have surged to alarming levels, now standing at 1,541, which is a staggering 70% increase compared to Q4 2019. During the peak of government support programs, mid-2020 to Q4 2021, insolvencies had dropped to the lowest levels registered hovering about 60% to 80% of the pre-pandemic level. However, since then, there has been a steady rise in insolvencies, with the most significant spike occurring between Q3 2023 and Q1 2024 when the number of insolvencies nearly doubled, jumping from 1,129 to 2,003.
Business insolvencies, quarterly data, Canada
Note: Business insolvencies data presented quarterly from Q1 2015 to Q2 2024.
Source: ISED Canada.
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