Canada is proving that a massive population boom doesn’t always mean a booming economy. Statistics Canada (Stat Can) data shows the number of active businesses slipped lower in November. A lot more businesses have been shuttering their doors recently, and fewer entrepreneurs are interested in replacing them.
Canadian Businesses Peaked Back In January 2023
Canadians are pulling back on the number of businesses they operate in the country. Active businesses fell to 932k, falling 0.1% (-1k) from the previous month. It was the third consecutive monthly decline.
Canadian Active Businesses Peaked In January 2023
The number of active businesses operating in Canada.
Source: Statistics Canada; Better Dwelling.
This appears to be a more recent issue taking its toll. Annual growth in November was 0.3% higher than the same month a year prior. Not exactly impressive considering population growth is multiples of that rate, but growth nonetheless.
It isn’t until the number peaks in January 2023 that businesses begin to shutter faster than new ones pop up.
Fewer People Are Starting Businesses As More Shutter
Businesses are closing and no one wants to replace them. The net balance saw 4k more businesses close than open in November. It was the largest contraction since March 2023, and the biggest November on record. An issue that is likely to get worse with only five of the past twelve months seeing more businesses open than close.
The uptick in business closures without replacement is yet another worrying datapoint for Canada’s economy. Last week, the country also released data indicating domestic and foreign investors are seeing fewer opportunities. This has led to a withdrawal of foreign capital, as well as more domestic investors sending capital abroad.
