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Monthly estimates of business openings and closures, January 2021

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Released: 2021-04-26

In January, despite extended public health restrictions in many provinces, the number of business closures decreased by 1.3% since the previous month. The number of business openings was down 6.9% and has been steadily declining since its 2020 peak in June. Despite this decrease in business openings, the number of active businesses continued to edge up slightly in January, but was 2.2% lower than one year earlier.

With the exception of Nova Scotia and Quebec, which recorded increases in business closures of 6.3% (+43) and 1.4% (+94), respectively, business closures have decreased across the provinces and territories since December 2020. In percentage terms, the largest declines in business closures were observed in the Prairies and in British Columbia. Notably, business closures in Saskatchewan were 26.3% lower than in January 2020, and, in British Columbia, they were down 21.4%. These provinces implemented less stringent public health restrictions in December 2020 than the central provinces.

Business closures increase in January 2021 in the industries most affected by public health restrictions

Decreases in the number of business closures were relatively widespread across industries, except in other services (except public administration) (+12.3%; +358) and in retail trade (+3.2%; +75), where increases in closures were observed. Minor increases of under 2.0% since December 2020 were observed in the arts, entertainment and recreation industry, and in the accommodation and food services industry. Greater closures in January 2021 relative to the previous month in these four industries may be attributable to extended public health restrictions, which tend to have a greater impact on these industries. In the tourism sector, the number of business closures decreased in January 2021 for the first time since August 2020. However, the number of business openings was down 9.1% (-351) from December 2020 to January 2021 in this sector, leading to a decline in active businesses of 0.8% (-534).

The number of active businesses in the industries most impacted by the pandemic remains lower than that observed in January 2020

While the number of business openings has decreased since December 2020, the number of active businesses in the Canadian business sector continued to increase. However, compared with one year earlier, there were nearly 20,000 fewer businesses in the Canadian business sector. In most industries, the number of active businesses was at least 3% lower than in January 2020. In particular, there were 9.5% fewer businesses in accommodation and food services and 7.1% fewer in arts, entertainment and recreation, industries that were hit hard by the pandemic. In contrast, there were 1.6% more businesses in professional, scientific and technical services, compared with one year earlier, and 0.7% more in transportation and warehousing. The professional, scientific and technical services industry was not impacted as heavily as the tourism sector in terms of business closures, and entrants in this industry made an important contribution in 2020.

Chart 1  Chart 1: Monthly business openings and closures in the business sector, Canada, January 2019 to January 2021, seasonally adjusted series
Monthly business openings and closures in the business sector, Canada, January 2019 to January 2021, seasonally adjusted series

Chart 2  Chart 2: Change in active businesses from January 2020 to January 2021, by selected industry, seasonally adjusted series
Change in active businesses from January 2020 to January 2021, by selected industry, seasonally adjusted series

  Note to readers

Every new month of data leads to a revision of the previously released data because of such factors as the seasonal adjustment process and the publication of a new version of the Generic Survey Universe File (or vintage of the Business Register). As a result, estimates may vary when compared with a previous data release.

Openings are defined as businesses with employment in the current month and no employment in the previous month, while closures are defined as businesses with employment in the previous month, but no employment in the current month. Continuing businesses are those with employees in both months, and the active population in any given month is the number of opening and continuing businesses in that month. Reopening businesses are defined as opening businesses that were also active in a previous month (i.e., they closed in a given month and had positive employment in a subsequent month). In contrast, entrants are opening businesses that were not active in a previous month.

A business is defined as an enterprise operating in a particular geography and industry.

The vast majority of businesses operate in one industry and one location or geography. These businesses will be counted once at the national and provincial level in the monthly estimates of openings and closures. For example, a retailer in Windsor, Ontario, will be counted as an active business in the Ontario estimates and once in the national estimates.

Some businesses can have multiple operations, and these can be in different industries and geographies. Such businesses can be counted more than once in the monthly estimates of openings and closures because they are active in multiple industries or geographies. For example, if a retailer has operations in both Alberta and Ontario, it will be counted as an active business in both provinces, but only once at the national level because it represents only one active firm. Similarly, a firm with retail and wholesale operations will be counted in both industries when individual industries are examined. However, when the business sector is examined, the firm counts only once because at that level it represents one firm active in the business sector.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Amélie Lafrance (343-572-3221; amelie.lafrance@canada.ca), Economic Analysis Division.

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