The number of active businesses (-0.3%; -2,529) dropped for the second consecutive month in August, according to a report released Monday by Statistics Canada.
The decline in the number of active businesses was mainly driven by the increase in the business closure rate from 4.6% in July to 4.9% in August. The business opening rate (4.4%) slightly declined, driven by the 0.1 percentage point decrease of the reopening rate whereas the entry held steady at 1.8%, explained the federal agency.
Tim Mossholder
“The decline in the number of active businesses in August 2022 was widespread across all provinces and territories. The decrease was mainly driven by Ontario (-0.3%; -994) and Quebec (-0.5%; -916), followed by Alberta (-0.2%; -265),” it said.
“In August 2022, the number of active businesses decreased in every industry apart from real estate and rental and leasing (+0.3%; +108) and professional, scientific and technical services (+0.1%; +73). Other services (except public administration) (-0.7%; -506) showed the largest decline, followed by retail trade (-0.4%; -346) and transportation and warehousing (-0.5%; -266).
“The increase in the closure rate in August 2022 was widespread across most industries. Accommodation and food services (+0.3 percentage points; +207), retail trade (+0.2 percentage points; +183) and construction (+0.1 percentage points; +170) drove the increase in the business closure rate. Apart from professional, scientific and technical services (4.9% closure rate versus 5.1% historical average) and finance and insurance, and management of companies and enterprises (4.7% versus 5.1%), the closure rate was higher than its historical average in all services-producing industries. Transportation and warehousing (+1.1 percentage points) and accommodation and food services (+0.8 percentage points) posted the highest gap between the closure rate and its historical average.
“In August 2022, the opening rate contracted or remained unchanged in every industry. Health care and social assistance (-0.5 percentage points; -488) followed by professional, scientific and technical services (-0.3 percentage points; -349) and other services (except public administration) (-0.5 percentage points; -340) drove the decline of the business opening rate. The opening rate was below its historical average in all industries except for transportation and warehousing (6.3% versus 6.2%) and real estate and rental and leasing (5.6% versus 5.4%).”
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)
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