Canadian business openings overtook closures ahead of third wave of COVID

More new businesses opened in Canada in February than they closed, while the number of business openings and closings increased from the previous month as COVID restrictions eased in the country. countries after the second wave of the virus, newly released Statistics Canada the data shows.

Just over 48,000 new businesses opened in February 2021, an increase of 6.1% from the previous month. Much of this was due to businesses reopening after they closed, which accounted for 62.4% of the increase. It was the first time that the number of business openings in the country increased since June 2020. In February 2020, 40,607 businesses opened.

Nearly 42,000 businesses closed in February, up 10.4% from 37,960 in January. Closures have tended to increase since August 2020, but the survey notes that the latest figures are a return to historic levels. In February 2020, 39,302 businesses closed their doors.

Closures increased in every province and territory except the Yukon, where the numbers were relatively stable. Ontario reported 2,858 more closures in February, a 19% increase from the previous month, which was the highest among provinces and territories during the period. Some Ontario jurisdictions saw some restrictions lifted within this time frame, but major economic centers like Toronto and Peel were still subject to strict stay-at-home orders.

Despite an extended curfew in Quebec, it saw the smallest increase in closures with just 83 businesses closed, a slight increase of 1.2% from January.

With openings exceeding closings nationally, some provinces and territories saw the number of active businesses increase in February 2021 compared to February 2020, a month before the start of the pandemic. British Columbia and the Yukon had slightly more active businesses than before the pandemic, but the latest round of restrictions could reverse the recent bump in British Columbia, according to the survey.

Ontario and Newfoundland and Labrador, however, had almost 5% fewer active businesses in February 2021 than in February 2020. These two provinces were hit much harder than the nearest province, Alberta, which reported 2.1% fewer active businesses over the same period. .

Overall, the number of active businesses had grown at a rate of around 1% through February, according to the report, and the survey predicts a return to pre-pandemic levels by May 2021 if current trends continue.

Sectors like retail and foodservice continue to be among the hardest hit by the pandemic, but openings in these sectors also exceeded closures in February. Another recently released StatCan survey reported that 51.6 percent of businesses in those industries expected profits to decline over the next three months, compared to 37.1 percent of all businesses.

Data on business closures in February shows ‘the K-shaped recovery’, where some industries capable of adapting to the pandemic continue to do well, while others that rely on face-to-face transactions are suffering said Trevin Stratton, chief economist of the Canadian Chamber of Commerce.

Despite some worrying figures in some industries, the Canadian economy continues to grow slowly and steadily.

Real gross domestic product (GDP) rose 0.4% in February from an increase of 0.7% in January, the 10th consecutive month that GDP grew after massive declines in March and April 2020, according to another survey from StatCan released today. Despite slight growth, economic activity was still 2% lower than in February 2020.

According to the Bank of Canada’s Business Outlook Survey released in April, companies polled said they were now more confident, as evidenced by their intention to increase investment and hire more employees.

“Many companies consider that the impacts of the pandemic on their activities are behind them. Business prospects for domestic and foreign demand have improved from low levels a year ago as most businesses are no longer concerned about the uncertainty associated with the pandemic, ”the report said. Bank of Canada.

The central bank’s Business Outlook Survey indicator, a key survey question measure that assesses general business sentiment, hit its highest level since the second quarter of 2018 in the first quarter of this year. year.

Whether a business fits into the global outlook outlined by the Bank of Canada “depends a lot on where you are on the spectrum in terms of region, sector and size,” said Corrine Pohlmann, vice -President of the Canadian Federation of Independent Business.

“If you depend on a local market in Toronto, you probably don’t feel as optimistic as if you were a large company that tends to sell in the United States,” she said.

As the scheduled expiration of many business support programs in July is fast approaching, Pohlmann said she feared many small businesses might not be able to make ends meet in the months to come if nothing. is made to support them.

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