Economic Insights
Monthly Business Openings and Closures: Experimental Series for Canada, the Provinces and Territories, and Census Metropolitan Areas

Release date: August 5, 2020 Correction date:August 17, 2020

Correction Notice

The column labelled April 2019 in Table 2 for active businesses and opening businesses contained March 2019 numbers. This also affects the first row of Table 3, same groups, for Canada only. The tables have been updated using the April 2019 numbers.

This article in the Economic Insights series presents monthly estimates of the number of business openings and closures, continuing businesses, and active businesses from January 2015 to April 2020. The estimates for businesses with employees are available for Canada, the provinces and territories, and census metropolitan areas. Where possible, industry information based on two-digit North American Industry Classification Systems codes are also presented. A business closure is defined as a firm that had employment in the previous month, but no employment in the current month. The closure may be temporary or permanent. Since January 2015, an average of approximately 39,000 businesses have closed each month in the Canadian business sector. More than twice that number, 88,187, was observed in April 2020.

The onset of the COVID-19 pandemic in March 2020 led to restrictions on economic activity. These restrictions led to widespread business closures in affected areas, with retail trade, accommodation and food services industries being the most affected. The reopening of businesses will have important implications for the speed and breadth of the economic recovery from COVID-19.

These experimental estimates on monthly openings and closures supplement the annual and quarterly data that Statistics Canada produces on business entry and exit. While data on openings and closures are timelier, they are conceptually different from the data on entry and exit. Whereas a business can close and reopen within a year, a business can only exit or enter once. The concept of entry and exit aims to capture permanent rather than transitory changes. 

For example, to be classified as a closing business in March 2020, a business must have paid employment in February 2020 but no paid employment in March 2020. To be classified as an exit in the first quarter of 2020, the business must not have paid employment in any of the subsequent quarters in 2020, nor in any quarter of 2021. Similarly, to be classified as an opening business in March 2020, a business must have paid employment in March 2020 but no paid employment in February 2020. In contrast, to be an entrant in the first quarter of 2020, the business must have paid employment in that quarter and no paid employment in any of the quarters in the previous year.

The COVID-19 pandemic has highlighted the need for both types of information. There is a need to know how many businesses have been immediately impacted by the COVID-19 shutdown and to track how many are reopening. The new experimental data on openings and closures address this gap. However, there is also a need to know how many of these closures are permanent (and are therefore exits) and how many new entrants there are to replace those permanent closures, as this will inform the longer-term impact of the pandemic.  

The results show that the COVID-19 pandemic has led to a significant increase in business closures and a decrease in business openings. In April 2020, 88,187 business closures were observed, more than twice the level observed in April 2019. The increase in business closures was widespread across the provinces and territories, but was particularly high in Ontario and Quebec. The most affected industries were accommodation and food services, other services (excluding public administration) and retail trade, where business closures more than doubled relative to one year ago. Business openings declined in April, but not to the same degree as the increase in closures in the same month. There were 32,803 business openings in April 2020, a decrease of 18.3% compared to April 2019.

Defining and measuring short term business dynamics

Measuring short-term business dynamics requires a set of definitions for recognizing sub-annual changes in firm activity and a data source that provides numerical estimates based on those definitions.

The basic measures of short-term business dynamics are monthly counts of openings, closures, continuing and active businesses. 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 (Table 1). 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.


Table 1
Business dynamics measures
Table summary
This table displays the results of Business dynamics measures Last month (example: March 2020), This month (example: April 2020) and Timing of business dynamics (appearing as column headers).
Last month (example: March 2020) This month (example: April 2020) Timing of business dynamics
Opening No employees Has employees Opened in April 2020
Closing Has employees No employees Closed in April 2020
Continuing Has employees Has employees Continuing in April 2020
Active Note ...: not applicable Sum of opening and continuing Active in April 2020

The PD7 payroll deduction files from the Canada Revenue Agency and the Business Register are the data sources for the estimates. The PD7 files provide the number of employees for each employer in Canada. These administrative records are linked to enterprises and establishments in the Business Register to obtain industry and geographical informationNote .

Businesses can change geography and industry over time. To reduce the volatility in the estimates due to changes in industry or geographical indicators and to focus on genuine openings and closures associated with changes in economic activity, the industry and geographical classification of a business is held constant for a period of time. For example, for the 2015 estimates, the industry and geographical estimates will be held fixed from December 2014 to January 2016. 

While the vast majority of enterprises have operations in a single geographical area and in a single industry, large enterprise can have activities in multiple industries and multiple geographical areas. The activity of a large enterprise in a particular geography/industry can be an important contributor to that geography/industry even if it represents only a small part of that enterprise’s activities. To reflect the complex nature of these large enterprises and their impact across industries and geographies, they are allowed to contribute to the counts multiple times.

To illustrate, consider the following example at the national level. If a large retailer also has wholesaling establishments, then it would count as one active business in the Canadian retail industry, and one active business in the Canadian wholesale industry. If the enterprise closed its operations in wholesale, but not in retail, it would count as a closure in the wholesale trade industry and an active business in retail trade.

This concept also applies at the provincial level and below. If an enterprise has operations in two provinces, then it would contribute to counts in both of those provinces. Depending on whether the enterprise had establishments in multiple industries in those provinces, it could contribute more than one in a province.

While the treatment of complex enterprises described above has benefits, it also creates a challenge for aggregation because it essentially treats all geography-industry combinations as distinct groups, and tries to gauge how many businesses are active within each one. As a result, the sum of the disaggregated data will be greater than the published data for the higher level aggregation. The resulting estimates are, therefore, appropriate for examining business dynamics over time within and across industry-geography groups, but analysis that rests on measures designed to work within an aggregation scheme, such as contributions to growth or share analysis, needs to be undertaken with caution.

Recent patterns in monthly business openings and closures

Steep increase in business closures in the Canadian business sector in April 2020

Business closures occur for various reasons, such as a lack of cash flow or financing to sustain the business, and competition which can drive out weaker businesses. Since the beginning of the monthly openings and closings series in 2015, on average, about 39,000 businesses have closed in Canada on a monthly basis in the business sector. In April 2020, 88,187 businesses closed (Table 2), a level that has not been observed since the beginning of the series and more than double the level of closures observed in April 2019 (Chart 1). The large number of business closures in April 2020 reflect the impact of the COVID-19 pandemic, which forced many businesses to shut down their operations. Notably, closures have increased since November 2019, which may also be attributed to events earlier in 2020, including the steep decline in oil prices and the rail blockades. These earlier events may have also contributed to the elevated level of closures later in the year.

Business openings in the Canadian business sector also decreased since December 2019, which may have been due to a drop in business confidence surrounding news of the global pandemic, and thus a lower desire to start a new business.

Chart 1 Monthly business openings and closings in the business sector, Canada, January 2015 to April 2020, seasonally adjusted series

Data table for Chart 1 
Data table for chart 1
Table summary
This table displays the results of Data table for chart 1. The information is grouped by Date (appearing as row headers), Opening and Closing, calculated using number units of measure (appearing as column headers).
Date Opening Closing
number
2015
January 40,179 31,164
February 39,672 35,262
March 35,565 32,962
April 38,551 37,490
May 39,562 34,292
June 28,096 35,565
July 42,533 36,755
August 37,587 35,629
September 31,217 35,033
October 38,822 37,305
November 41,658 36,665
December 33,552 36,591
2016
January 39,866 34,413
February 37,501 45,369
March 37,736 38,025
April 39,947 37,055
May 37,876 36,783
June 29,805 34,374
July 43,587 41,952
August 38,119 38,375
September 35,028 36,583
October 38,976 38,729
November 43,913 39,914
December 38,934 37,517
2017
January 37,154 39,012
February 38,320 34,551
March 38,563 42,688
April 38,773 37,465
May 38,890 34,090
June 36,567 36,771
July 36,421 38,854
August 39,448 38,159
September 41,344 39,294
October 36,498 38,361
November 36,288 31,652
December 37,348 38,701
2018
January 36,991 38,917
February 38,909 37,063
March 41,359 40,018
April 38,373 37,532
May 36,561 39,224
June 41,089 37,958
July 37,829 36,735
August 38,868 43,205
September 40,933 39,235
October 39,498 38,548
November 50,216 49,297
December 38,672 39,545
2019
January 38,549 39,754
February 39,990 39,948
March 41,930 38,219
April 40,136 39,078
May 39,655 38,992
June 39,042 39,791
July 39,865 37,826
August 37,247 38,051
September 37,549 38,552
October 37,687 37,576
November 37,838 37,226
December 38,330 38,149
2020
January 37,607 39,008
February 35,397 39,104
March 33,002 59,869
April 32,803 88,187

Business closures more than triple in accommodation and food services compared to one year earlier

The number of business closures increased in April 2020 in all industries, and some industries had significantly more business closures than the average. The largest increases in business closures from April 2019 to April 2020 occurred in accommodation and food services (6,719 or 274.1%), followed by other services (6,814 or 264.3%) and retail trade (6,133 or 217.7%) (Chart 2). In contrast, finance and insurance and management of companies and mining, quarrying, oil and gas extraction had the lowest year-on-year growth rates in closures, which increased by 38.9 percent and 47.6 percent, respectively.

It is possible that the COVID-19 pandemic had a substantial negative impact on accommodation and food services, other services (which includes personal services and religious organizations) and retail trade as they are not considered “essential” industries, and were not permitted to operate. Moreover, in many instances, employees in these industries do not have the option to work from home. As mentioned, the finance and insurance and management of companies saw the lowest drop in business closures (on a year-over-year percentage growth basis), which may partly be explained by greater opportunities of employees in that industry to work from home during the pandemic.

Compared with April 2020, business openings decreased in all industries. However, the drop in business openings was not as substantial as the increase in business closures. For instance, in accommodation and food services, the number of business openings decreased by about 400 businesses (or 17.8%).

Chart 2 Monthly business closures, select industries based on highest year-over-year growth rate in April 2020, January 2015 to April 2020, seasonally adjusted series

Data table for Chart 2 
Data table for chart 2
Table summary
This table displays the results of Data table for chart 2 Accomodation and food services, Other services (except public administration) and Retail trade, calculated using number units of measure (appearing as column headers).
Accomodation and food services Other services (except public administration) Retail trade
number
2015
January 2,376 2,260 2,518
February 2,248 2,242 2,627
March 2,309 2,239 2,577
April 2,415 2,420 2,802
May 2,279 2,332 2,677
June 2,304 2,368 2,669
July 2,334 2,371 2,693
August 2,244 2,199 2,604
September 2,236 2,386 2,622
October 2,397 2,538 2,719
November 2,572 2,834 2,854
December 2,412 2,519 2,806
2016
January 2,243 2,205 2,570
February 2,365 2,726 2,813
March 2,395 2,565 2,901
April 2,332 2,407 2,650
May 2,362 2,388 2,615
June 2,251 2,441 2,769
July 2,417 2,650 2,833
August 2,254 2,435 2,728
September 2,335 2,533 2,686
October 2,322 2,458 2,767
November 2,397 2,640 2,900
December 2,244 2,396 2,666
2017
January 2,300 2,463 2,705
February 2,308 2,317 2,361
March 2,547 2,788 3,166
April 2,298 2,443 2,763
May 2,268 2,210 2,501
June 2,405 2,394 2,687
July 2,374 2,466 2,757
August 2,442 2,501 2,789
September 2,362 2,488 2,769
October 2,360 2,459 2,804
November 2,233 2,319 2,560
December 2,373 2,423 2,833
2018
January 2,369 2,335 2,872
February 2,298 2,444 2,678
March 2,361 2,475 2,730
April 2,314 2,414 2,736
May 2,386 2,526 3,018
June 2,492 2,591 2,820
July 2,220 2,257 2,609
August 2,540 2,580 3,108
September 2,450 2,600 2,810
October 2,422 2,453 2,752
November 2,387 2,491 2,781
December 2,567 2,686 2,791
2019
January 2,405 2,741 2,940
February 2,445 2,606 2,898
March 2,364 2,460 2,731
April 2,452 2,578 2,818
May 2,464 2,663 2,920
June 2,320 2,501 2,804
July 2,294 2,382 2,733
August 2,320 2,464 2,763
September 2,379 2,383 2,868
October 2,339 2,505 2,755
November 2,424 2,525 2,773
December 2,301 2,430 2,752
2020
January 2,416 2,515 2,695
February 2,498 2,823 2,785
March 5,530 5,003 5,149
April 9,171 9,392 8,951

Business closures were widespread across provinces and territories in April 2020

Compared with April 2019, many provinces and territories saw a doubling of business closures. The largest increases in percentage terms occurred in Ontario (149.7%) (Chart 3), Quebec (134.6%) and Nova Scotia (127.7%) (Table 3).

Not surprisingly, the industry patterns of business closures in April 2020 at the national level are generally reflected across the provinces and territories, albeit to varying degrees. Business closures in other services and in accommodation and food services quadrupled in Ontario and tripled in Quebec from April 2019 to April 2020. In contrast, closures in finance and insurance and management of companies increased by only 17 percent in British Columbia and by 18 percent in Alberta.

Business openings decreased in in all provinces and territories, except in the Northwest Territories (Table 3). On a year-over-year growth rate basis, the decline in business openings was fairly similar across the country, ranging from a decline of 1,326 (21.2%) business openings in Quebec and 3,981 (24.3%) in Ontario to 79 (1.2%) in British Columbia.

Chart 3 Monthly business closures in the four largest provinces, January 2015 to April 2020, seasonally adjusted series

Data table for Chart 3 
Data table for chart 3
Table summary
This table displays the results of Data table for chart 3. The information is grouped by Date (appearing as row headers), Quebec, Ontario, Alberta and British Columbia, calculated using number units of measure (appearing as column headers).
Date Quebec Ontario Alberta British Columbia
number
2015
January 6,032 9,916 4,503 4,928
February 5,859 13,185 6,398 5,604
March 5,702 12,178 5,585 5,384
April 6,600 14,168 6,264 6,040
May 5,710 13,258 5,928 5,882
June 6,194 13,591 6,041 5,960
July 6,385 13,903 6,310 5,998
August 5,980 13,437 5,881 5,745
September 6,106 13,296 6,084 5,892
October 6,624 13,965 6,367 6,035
November 6,265 13,532 6,431 5,905
December 6,047 13,989 6,160 6,098
2016
January 6,863 11,326 5,302 5,281
February 6,743 18,074 8,220 7,371
March 6,275 14,498 6,551 6,228
April 6,198 14,030 6,399 6,080
May 6,407 14,084 6,555 6,196
June 5,380 13,762 5,815 5,792
July 6,950 16,507 6,910 6,891
August 6,639 14,236 6,154 6,339
September 6,283 14,124 6,152 5,967
October 6,580 15,126 6,104 6,522
November 6,824 14,252 6,946 6,623
December 6,396 14,438 5,980 6,330
2017
January 5,875 14,918 6,000 6,556
February 5,696 12,992 5,820 5,583
March 7,027 16,884 6,836 7,034
April 6,382 14,615 5,866 6,288
May 6,078 13,484 5,453 5,843
June 6,341 14,806 5,584 6,376
July 6,162 16,066 6,013 6,595
August 6,220 14,541 6,017 6,274
September 7,210 15,180 5,889 6,562
October 6,291 15,023 6,037 6,298
November 4,910 11,265 5,791 5,057
December 6,817 15,023 6,044 6,334
2018
January 6,293 15,064 6,028 6,379
February 6,263 14,479 5,891 6,131
March 6,637 15,896 6,070 6,676
April 6,196 15,235 5,743 6,206
May 6,941 15,917 5,952 6,738
June 6,253 15,524 6,121 6,449
July 5,946 15,031 5,873 6,295
August 7,467 16,371 6,363 7,119
September 6,641 15,239 6,189 6,689
October 6,206 14,911 6,024 6,809
November 9,978 17,066 7,646 7,794
December 6,504 15,434 6,148 6,784
2019
January 6,492 15,703 6,090 6,692
February 6,830 15,669 6,035 7,010
March 5,487 15,784 5,958 6,687
April 6,374 15,804 6,040 6,793
May 6,494 15,945 6,083 6,875
June 6,743 16,158 6,071 7,113
July 6,433 15,569 5,805 6,520
August 6,382 14,238 5,795 6,169
September 6,474 14,980 5,879 6,778
October 6,306 14,572 5,766 6,369
November 6,541 13,140 5,891 5,936
December 6,034 14,976 5,815 6,736
2020
January 6,680 15,167 5,844 6,927
February 6,689 15,479 5,923 6,710
March 11,148 22,845 8,183 11,847
April 14,953 39,463 11,308 13,715

A sharp increase in business closures was also recorded in Canada’s three largest census metropolitan areas (CMAs) in April 2020 compared to one year earlier. The largest increase is observed in Toronto (13,771 or 154.6%), followed by Montréal (4,812 or 139.9%) and Vancouver (3,655 or 92.6%). Over the same period, business openings decreased at a similar rate across the three CMAs, ranging from 12.4 percent in Vancouver to 23.1 percent in Toronto.


Table 2
Openings, closures and active businesses by industry, April 2019 and April 2020, seasonally adjusted series
Table summary
This table displays the results of Openings Business openings, Business closures, Active businesses, April 2019, Apr-20, Change from April 2019 to April 2020 and Apr-19, calculated using number and percent units of measure (appearing as column headers).
Business openings Business closures Active businesses
April 2019 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020 Apr-19 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020 Apr-19 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020
number number number percent number number number percent number number number percent
Business sector 40,136 32,803 7,333 -18.3 39,078 88,187 49,109 125.7 798,379 711,472 -86,907 -10.9
Agriculture, forestry, fishing and hunting 311 253 -58 -18.6 282 441 159 56.3 4,768 4,274 -495 -10.4
Mining, quarrying, oil and gas extraction 279 235 -44 -15.8 282 416 134 47.6 6,057 5,416 -640 -10.6
Utilities 34 19 -15 -43.9 22 35 13 57.1 728 673 -55 -7.6
Construction 5,954 3,971 -1,982 -33.3 6,160 12,837 6,677 108.4 117,476 103,713 -13,763 -11.7
Manufacturing 1,116 914 -202 -18.1 1,157 3,178 2,021 174.7 42,582 38,903 -3,679 -8.6
Wholesale trade 1,074 858 -215 -20.0 1,141 2,672 1,531 134.2 39,521 35,807 -3,714 -9.4
Retail trade 2,715 2,266 -449 -16.5 2,818 8,951 6,133 217.7 86,279 75,503 -10,776 -12.5
Transportation and warehousing 3,103 2,586 -517 -16.7 3,107 5,511 2,405 77.4 51,165 45,412 -5,753 -11.2
Information and cultural industries 497 405 -92 -18.5 479 918 439 91.7 10,142 9,323 -819 -8.1
Real estate and rental and leasing 2,176 1,826 -350 -16.1 2,268 4,145 1,877 82.8 40,278 36,064 -4,214 -10.5
Professional, scientific and technical services 5,963 5,847 -117 -2.0 5,914 9,739 3,825 64.7 114,287 108,512 -5,775 -5.1
Administrative and support, waste management and remediation services 2,137 1,475 -662 -31.0 2,030 3,999 1,969 97.0 39,910 35,951 -3,959 -9.9
Finance and insurance and Management of companies and enterprises 1,420 1,277 -144 -10.1 1,458 2,025 567 38.9 27,830 26,261 -1,569 -5.6
Arts, entertainment and recreation 821 543 -278 -33.9 779 1,855 1,075 138.0 14,425 12,652 -1,773 -12.3
Accomodation and food services 2,350 1,933 -417 -17.8 2,452 9,171 6,719 274.1 62,567 51,796 -10,770 -17.2
Other services (except public administration) 2,611 2,105 -507 -19.4 2,578 9,392 6,814 264.3 72,829 61,776 -11,054 -15.2
Unclassified industries 7,355 5,016 -2,339 -31.8 7,009 13,503 6,494 92.7 74,013 65,311 -8,702 -11.8

Table 3
Openings, closures and active businesses by province and territory, April 2019 and April 2020, seasonally adjusted series
Table summary
This table displays the results of Openings Business openings, Business closures, Active businesses, Apr-19, Apr-20 and Change from April 2019 to April 2020, calculated using number and percent units of measure (appearing as column headers).
Business openings Business closures Active businesses
Apr-19 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020 Apr-19 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020 Apr-19 Apr-20 Change from April 2019 to April 2020 Change from April 2019 to April 2020
number number number percent number number number percent number number number percent
Canada 40,136 32,803 7,333 -18.3 39,078 88,187 49,109 125.7 798,379 711,472 -86,907 -10.9
Newfoundland and Labrador 640 414 -226 -35.3 600 1,190 590 98.2 11,834 10,467 -1,367 -11.6
Prince Edward Island 235 162 -74 -31.3 203 428 225 110.6 3,566 3,213 -353 -9.9
Nova Scotia 843 550 -293 -34.8 821 1,869 1,048 127.7 17,470 15,842 -1,628 -9.3
New Brunswick 724 449 -275 -38.0 684 1,519 835 121.9 14,807 13,392 -1,415 -9.6
Quebec 6,246 4,920 -1,326 -21.2 6,374 14,953 8,578 134.6 169,989 154,173 -15,816 -9.3
Ontario 16,394 12,413 -3,981 -24.3 15,804 39,463 23,659 149.7 307,171 270,178 -36,994 -12.0
Manitoba 1,133 993 -140 -12.3 1,160 2,086 926 79.8 24,272 22,706 -1,566 -6.5
Saskatchewan 1,209 884 -326 -26.9 1,131 2,185 1,054 93.1 22,283 19,936 -2,347 -10.5
Alberta 6,111 4,905 -1,206 -19.7 6,040 11,308 5,267 87.2 107,232 95,732 -11,501 -10.7
British Columbia 6,578 6,499 -79 -1.2 6,793 13,715 6,922 101.9 130,888 117,005 -13,883 -10.6
Yukon 66 61 -5 -7.2 68 123 55 80.7 1,202 1,121 -81 -6.8
Northwest Territories 33 36 3 7.8 37 61 25 67.0 903 852 -51 -5.6
Nunavut Note X: suppressed to meet the confidentiality requirements of the Statistics Act Note X: suppressed to meet the confidentiality requirements of the Statistics Act Note ...: not applicable Note ...: not applicable Note X: suppressed to meet the confidentiality requirements of the Statistics Act Note X: suppressed to meet the confidentiality requirements of the Statistics Act Note ...: not applicable Note ...: not applicable 285 280 -5 -1.7

Will the higher closures become more exits?

Analysis of firm dynamics often focuses on the entry and exit of businesses into and out of the market place. One challenge in doing this sort of analysis is how to distinguish a business that exits a market place when it ceased operations permanently from others that cease operations temporarily. In the business dynamics literature, a business is typically assumed to have exited the market place if it has ceased operations for at least one year. There are many reasons why a business may close for a relatively short period of time. Many businesses, such as snow removal and landscaping companies, are seasonal by their nature and, therefore, only operate for part of the year. Others may close for a short period to upgrade facilities or restructure their corporate structures and finances. Whatever the reason, some closures are not permanent, and therefore, should not be considered exits.

Although it is not necessarily true that every business closure results in an exit, it is true that every exiting business necessarily closes. Business exits and closures, for this reason, tend to be strongly related. This strong relationship can be helpful for predicting the number of exits beyond the last quarter for which business entry and exit data are available. Typically, closures and exits move together, falling when the economy expands and rising when it contracts. If the portion of businesses that close temporarily compared to total businesses remains relatively stable, then closures will continue to predict exits relatively well.

The strength of this relationship can be seen in Chart 4, in which quarterly closures in the business sector were used to predict how many businesses would exit in the same quarter.Note 

However, there is no guarantee that this relationship between closures and exits applies to the current situation. Indeed, the support measures to businesses under the Canada Emergency Response Plan to COVID-19 is expected to lower the number of expected exits. Using closures to predict exits through the COVID-19 pandemic likely overstates the impact of the current downturn compared to estimates generated during less extraordinary periods of economic expansion and contraction observed in Canada.

Chart 4 Actual and estimated firm exits for the Canadian business sector

Data table for Chart 4 
Data table for chart 4
Table summary
This table displays the results of Data table for chart 4 Actual exits and Estimated exits, calculated using number units of measure (appearing as column headers).
Actual exits Estimated exits
number
2015
Q1 26,258 25,362
Q2 25,815 25,725
Q3 25,243 25,131
Q4 25,385 25,356
2016
Q1 25,415 25,302
Q2 25,058 25,243
Q3 24,489 24,887
Q4 24,402 24,295
2017
Q1 24,865 24,117
Q2 25,037 25,030
Q3 25,534 25,356
Q4 25,776 25,478

Conclusion

This Economic Insights presents results from new data series of monthly business openings and closures, as well as continuing and active businesses. These series provide timely measures of business dynamics for Canada, the provinces and territories, metropolitan areas, and select industries.

The COVID-19 pandemic has led to a significant decline in economic activity that are reflected in the new series. The results show that business closures increased sharply in the Canadian business sector in April 2020, the most recent data point available. The increase was widespread across the provinces and territories, but were particularly high in Ontario and Quebec. The most affected industries were accommodation and food services, other services (excluding public administration) and retail trade, where business closures more than doubled relative to one year ago. Business openings fell in April but was proportionately small compared to the increase in closures in the same month.

While these new series provide more timely insights into changes in firm population due to entry and exit, there is an important distinction between an opening business and a new entrant, and a closing business and a permanent exit. As this is the first article in a set of Economic Insights to be published on this theme, future work will involve examining/incorporating other data sources to look more closely at the relationship between business openings and entrants and business closures and exits.


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