The business opening rate in Canada dropped from 4.6 per cent in January to 4.4 per cent in February, 0.3 percentage points below its 2015-to-2019 historical average. Following three consecutive months of decline, in April the business closure rate increased by 0.2 percentage points to settle at 4.5 per cent, slightly below its historical average of 4.6 per cent. As closures were higher than openings, the number of active businesses dropped by 0.2 per cent (-1,452), reported Statistics Canada on Monday.
Kaique Rocha
“The decline in the business opening rate in February was mainly driven by the reopening rate, which dropped from 2.9 per cent in January to 2.7 per cent in February. The entry rate held steady at 1.7 per cent for the fourth consecutive month. Both the reopening (-0.2 percentage points) and the entry (-0.1 percentage points) rates were below their respective historical averages. In fact, both the reopening and the entry rates have been relatively stable since August 2021, generally varying around 0.1 percentage points of their historical averages,” said the federal agency.
“In February 2023, the business opening rate decreased in all industries. The decline was led by other services (except public administration) (-0.9 percentage points change in the opening rate; -665 change in business openings) and transportation and warehousing (-1.1 percentage points; -627), followed by professional, scientific and technical services (-0.4 percentage points; -500) and health care and social assistance (-0.5 percentage points; -455).
“In February, the increase in the business closure rate was widespread across industries. Transportation and warehousing (+1.1 percentage points change in closure rate; +497 change in business closures) and professional, scientific and technical services (+0.3 percentage points; +312) drove the decline. Construction (+0.1 percentage points; +160) and arts, entertainment and recreation (+0.7 percentage points; +102) were other industries with over 100 more business closures compared with January 2023.”
StatsCan said the exit rate generally settled at a higher level in 2022 compared with previous years. Indeed, between January and August, the average exit rate was 1.9 per cent.
“This is 0.1 percentage points above the average exit rate for 2020 despite the COVID-19 pandemic, and 0.4 percentage points higher than the average exit rate for 2021. Furthermore, in July 2022 (2.0%), the exit rate posted its highest level since May 2020 (2.1 per cent),” said the report.
“Industries where exit rates increased the most from their historical averages were transportation and warehousing (2.3 per cent exit rate vs. 1.5 per cent historical average), real estate and rental and leasing (2.4 per cent vs. 1.9 per cent) and professional, scientific and technical services (2.0 per cent vs. 1.7 per cent). Forestry, fishing and hunting (1.3 per cent exit rate; 1.6 per cent historical average) was the industry where the exit rate decreased the most from its historical average. In all other industries, exit rates were within 0.2 percentage points of their historical averages.”
Mario Toneguzzi
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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