Monthly estimates of business openings and closures, May 2021
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Released: 2021-08-30
There were slightly fewer active businesses (-0.1%; -1,208) in May compared with a month earlier, marking the first time since May 2020 that the number of closures outpaced openings.
The number of business openings decreased by 11.5%, the largest percentage decrease since December 2018 and the second consecutive month with negative growth (Chart 1). The number of business closures declined by 2.9%, following a 2.5% increase in April.
The decline in the number of business openings in May was largely driven by fewer entrants (-16.4%). The number of entrants in May was below the 2015-to-2019 average for the first time since August 2020.
Reopenings also declined in May (-8.2%) and in April (-13.7%) and were lower than the 2015-to-2019 average for the first time since February 2020. This may have been due to the continuing third wave of the pandemic this May, when public health restrictions were tightened or introduced in several jurisdictions.
Nova Scotia (+17.7%; +144) was the only province with more business closures in May than in April. There were fewer business openings in every province and territory except Yukon, where openings increased slightly.
The number of active businesses in May was similar to the previous month in most provinces. Nova Scotia (-3.0%; -605) reported the largest variation in active businesses. After 11 consecutive months of positive growth, the number of active businesses decreased 0.9% (-36) in Prince Edward Island.
Fewest business openings in the tourism and accommodation and food services sectors on record
The number of business openings in the tourism (-48.2%; -1,622) and accommodation and food services (-29.1%; -720) sectors continued to decline in May, falling to their lowest level since the date series began in January 2015. The decline in business openings was widespread across all industries in May, driven by the broad-based decrease in reopenings and entries.
The change in the number of business closures varied across industries. For the first time since August 2020, accommodation and food services (-9.1%; -251) posted fewer business closures than the previous month. In contrast, business closures in arts, entertainment and recreation rose 6.3% (+44) following two months of negative growth.
The number of active businesses in the tourism sector declined for the second straight month, falling 0.9% (-625) in May, and remained 8.2% below its pre-pandemic level. The number of active businesses in the construction sector (-0.6%; -674) fell for the first time since May 2020. It was also the highest decrease among all industries.
For the first time since the spring of 2020, retail trade (-0.2%; -131) and arts, entertainment and recreation (-0.8%; -114) also had fewer active businesses than a month earlier. The number of active businesses declined for the second consecutive month in accommodation and food services (-0.6%; -339) and other services (-0.9%; -617).
Chart 1
Monthly business openings and closures in the business sector, Canada, January 2019 to May 2021, seasonally adjusted series
Chart 2
Monthly business reopenings and entries in the business sector, Canada, January 2019 to May 2021, seasonally adjusted series
Note to readers
Every new month of data leads to a revision of the previously released data due to factors such as the seasonal adjustment process and a new version of the Generic Survey Universe File (vintage of the Business Register). As such, the estimates may vary from a previous 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 that had employment in the previous month, but no employment in the current month. Continuing businesses are those that have 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 (that is, 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. For these businesses, in the monthly estimates of openings and closings, they will be counted once at the national/provincial level. 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. For such businesses, in the monthly estimates of openings and closings, they can be counted more than once 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
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