Business Openings and Closures For business openings and closures in Canada, 2024 data, as shown in Figure 18, indicated a positive but modest start to the year, likely due to a continuation of relatively stable business and geopolitical environments from 2023. After a slight net gain in Q1 in the number of business openings, Q2 and Q3 both had slight reversals from Q1, recording a net loss of 1,488 and 1,838 businesses, respectively. By Q4 2024, there was a small recovery, with a net gain of 1,385 businesses in Canada.
Figure 18: Net Business Openings in Canada by Quarter (2020–2024) Figure 18: Net Business Openings in Canada by Quarter (2020–2024)
20,000 40,000 60,000
-120,000 -100,000 -80,000 -60,000 -40,000 -20,000 0
Q1 '20
Q2 '20
Q3 '20
Q4 '20
Q1 '21
Q2 '21
Q3 '21
Q4 '21
Q1 '22
Q2 '22
Q3 '22
Q4 '22
Q1 '23
Q2 '23
Q3 '23
Q4 '23
Q1 '24
Q2 '24
Q3 '24
Q4 '24
As seen through an annual lens, 2024’s total net loss of 391 businesses presents an unfavourable business environment compared with 2023’s net gain of 4,580 businesses. This difference may indicate increased pressure on businesses due to prolonged periods of economic uncertainty, changing consumer behaviours and a reduction of public investment in small to medium-sized businesses. Additionally, it is important to consider that some of the business closures in 2024 were likely voluntary. Business owners might have chosen to shutter their current ventures to pursue more profitable opportunities or shift toward industries that are better insulated from U.S. Canada tariff uncertainty. Such voluntary closures, while contributing to the net loss figures, may ultimately lead to a more resilient and diversified business environment in the long term. The data that measure reopening businesses that were active in a previous month since 2015 indicate that a total of 344,573 businesses reopened in 2024. In 2023 and 2022, respectively, 330,967 and 325,378 businesses reopened. These figures show a modest increase year over year in business owners’ willingness to re-enter the market. The build-up of reopening businesses over these years could suggest that operators with prior experience are being particularly strategic in investing in tried-and-true business models, rather than in novel business enterprises. As we face 2025, legitimate apprehension regarding U.S. trade policies and Canadian government and market reaction to such policies could keep entrepreneurial activity relatively modest. At the same time, if new businesses focus on the domestic market, there are opportunities for these businesses or reopened businesses to compete with less competitive ventures for talent and capital.
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Davies Insolvency Now: Issue 12
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