Monthly estimates of business openings and closures, August 2021
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Released: 2021-11-29
In August 2021, the number of business closures outpaced business openings for the first time since May 2020. By consequence, the number of active businesses decreased by 0.6% (-5,197). Nevertheless, the number of active businesses was above its February 2020 level for the fourth consecutive month.
The number of business closures rose by 24.0% in August, following a 16.0% decline in July to return close to its pre-pandemic level. After two consecutive months of increase following the lifting of several public health restrictions, the number of business openings dropped by 2.7% in August, entirely driven by a lower number of reopenings (-4.8%). This suggests that most businesses that reopened did so between June and July, when the majority of the restrictions were eased.
In August, the number of active businesses dropped in every province and territory, except Quebec (+0.1%; +203) and Nunavut (+4.3%; +14). The decline in the overall number of active businesses was largely driven by Ontario (-0.7%; -2,367).
There were fewer active businesses in the professional, scientific and technical services sector in August than the previous month for the first time since June 2020. The decline of 536 (-0.4%) in that sector was the largest across all sectors, followed by transportation and warehousing (-0.8%; -430) and other services (except public administration) (-0.5%; -360).
The number of active businesses contracted by 0.5% (-200) in the manufacturing sector in August. With the exception of the 0.2% decline in November 2020, this was the first time that the manufacturing sector posted a negative growth in the number of active businesses since May 2020.
Border restrictions were lifted for non-essential American travelers in August, and the number of active businesses in the tourism sector (+0.3%; +237) increased for the third consecutive month. The increase in the tourism sector was mainly driven by the accommodation and food services sector, which rose by 0.3% (+205).
Chart 1
Change in the number of active businesses in the business sector, January 2019 to August 2021, seasonally adjusted data
Chart 2
Percentage change in active businesses between July and August 2021, by industry, seasonally adjusted data
Note to readers
Every new month of data leads to a revision of the previously released data because of factors such as the seasonal adjustment process and a new version of the Generic Survey Universe File (vintage of the Business Register). As such, estimates may vary from previous releases.
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 had 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). By 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 and provincial level. For example, a retailer in Windsor, Ontario will be counted as an active business in the Ontario estimates and also 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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