Roughly one in ten small businesses in Canada have disappeared since the pandemic, with closures now outpacing new start-ups nationwide, according to new federal data.
Blacklock's Reporter says figures from the Department of Industry show Canada counted 1,079,118 small businesses last year, down 121,453 from pre-pandemic levels — a decline of 10%.
The losses mirror findings by the Canadian Federation of Independent Business, which has warned the country is steadily losing entrepreneurs.
“We are bleeding businesses,” said CFIB chief economist Simon Gaudreault.
While entrepreneurs tend to be optimistic, he said confidence has eroded to the point many would no longer recommend starting a small business in Canada.
The federal numbers include all firms with fewer than 100 employees. Most were tiny operations, with 58% employing fewer than five people.
Despite the decline, small businesses remained the largest private-sector employers, providing jobs for 6,824,200 Canadians last year.
Gaudreault said the downward trend has been visible for years across multiple data sets.
CFIB research shows business entry and exit rates have been weakening long before COVID-19, but the pandemic accelerated the damage.
In its Sectoral Analysis: Business Entry And Exit Trends 2015-2025, the federation reported that exits began climbing in mid-2021 alongside a spike in insolvencies that peaked in early 2024.
Since then, net business creation has turned negative, with the gap between closures and start-ups widening each quarter.
Pandemic lockdowns, supply chain disruptions, inflation and tariffs all compounded the pressure on small operators, Gaudreault said.
Bankruptcy filings attract headlines, he added, but they capture only a fraction of the businesses quietly shutting their doors.
Family-run operations were hit hardest. A 2022 industry department study found a sharp drop in the share of small and medium-sized enterprises owned by couples or family members. Before the pandemic, 62% of such firms were family-owned; that fell to 48% afterward.
The report also found about 33% of small and medium-sized businesses were forced into temporary closures during the pandemic. The findings were drawn from surveys of 19,283 businesses with fewer than 500 employees and annual revenues starting in the five-figure range.
Ownership patterns matter to Ottawa, the department noted, as policymakers rely on such data when designing what it calls equitable economic policy.
