In May, the business closure rate edged up by 0.1 percentage points to 4.8%, following a 0.1 percentage point decline in the previous month. The business opening rate remained steady at 4.8%, unchanged since February. In May, the business closure rate was 0.2 percentage points higher than its 2015-to-2019 historical average, while the opening rate was 0.1 percentage points higher than its historical average, according to a Statistics Canada report.
In May, the number of active businesses declined marginally by less than 0.1% (-141 businesses) as the number of closures was slightly higher than that of openings. In the same month, real gross domestic product edged down by 0.1%, while payroll employment increased by +0.1% and the total number of insolvencies (bankruptcies and proposals) in Canada rose by 2.3% compared with the previous month, said the federal agency.
“The increase in business closures in May was widespread across sectors and largely driven by four sectors. The construction (+462 business closures compared with April; 19.3% contribution to the overall increase in business closures) and professional, scientific and technical services (+328; 13.7% contribution) sectors led the increase, followed by the accommodation and food services (+310; 13.0% contribution) and health care and social assistance (+266; 11.1% contribution) sectors,” explained Statistics Canada.
“Although the overall business opening rate remained steady in May, the number of openings showed a mixed pattern across sectors. Most sectors experienced modest increases in openings, while a few saw notable declines. The increase was led by the other services (except public administration) (+97 business openings compared with April), administrative and support, waste management and remediation services (+71) and construction (+70) sectors. However, the increase in openings was offset by declines in three sectors: transportation and warehousing (-199 business openings compared with April), health care and social assistance (-152) and professional, scientific and technical services (-21).
“Similarly, the number of active businesses showed a mixed pattern across sectors, with declines in some and increases in others. The decline in active businesses was primarily driven by the retail trade (-206 active businesses compared with April); transportation and warehousing (-190), and wholesale trade (-129) sectors. The increase in active businesses was led by the health care and social assistance (+161 active businesses compared with April) and accommodation and food services (+107) sectors, followed by the other services (except public administration) (+70), and administrative and support, waste management and remediation services (+67) sectors.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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