Business closings overtake openings for first time since May, 2020
Statistics Canada reports that 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).