Number of Businesses

Business activity in Canada expanded in the years after the global financial crisis in 2008. New Canadian businesses continued to enter the market, aiming to contribute to the economy and capitalize on renewed growth. More recently, the economy was driven by strong performances in the housing market and construction sector in the early years of the current period. Broader economic indicators in corporate profit and domestic GDP generally renewed confidence for new and existing business owners to form or expand, pre-pandemic. However, in early 2020, many businesses across Canada were forced to close or limit service to abide by social distancing orders. These were implemented to prevent further spread of COVID-19 (coronavirus). This prolonged closure, led many businesses to shut their establishments permanently due to the lack of income. As a result, despite substantial government assistance, businesses fell 0.7% over 2020. Inflation is causing the price of goods to rise, hurting business profit and consumers propensity to spend. As a result prolonged period of high interest rate and high inflation, growth in the number of businesses has been limited. Overall, the number of businesses is forecast to increase at an annualized rate of 1.4% over the five years to 2025 as the Canadian economy recovers and eventually expands.