Oct 29, 2021
The number of business closures decreased by 16.7% in July, the highest percentage change since July 2020. Meanwhile, business openings declined slightly, by 2.1%. As a result, the number of active businesses grew by 0.1% in July.
The number of active businesses has been increasing since June 2020 and has been above its pre-pandemic level of February 2020 for three consecutive months, suggesting a sustained recovery following the easing of public health restrictions.
The decline in business openings (-2.1%) was entirely driven by a lower number of entrants (-6.4%) in July compared with June. However, opening, reopening and entry rates were close to their respective 2015-to-2019 averages.
The number of business closures dropped or was little changed in every province and territory in July, with the exception of Alberta (+0.5%; +25) and British Columbia (+4.7%; +306). Ontario (-29.6%; -5,183), which drove the decline, and Manitoba (-25.6%; -349) showed their highest percentage decreases in business closures since August 2020.
Business closures are below their pre-pandemic levels in the tourism and accommodation and food services sectors for the first time since November
Business closures dropped in the tourism (-10.5%; -327) and accommodation and food services (-12.4%; -298) sectors in July and were below their pre-pandemic levels for the first time since November 2020. This was the result of three consecutive months of decline in these sectors. The overall decrease in business closures in July was driven by the drop in other services (except public administration), which was 32.7% (-1,037) lower than in June.
Openings in other services (except public administration) rose by 57.0% (+1,477) in July, partly because personal care services resumed in Ontario and Manitoba at the end of June. The number of business openings in construction (-4.0%; -218), which has generally been declining since August 2020, was below its pre-pandemic level for the first time since April 2020.
The change in the number of active businesses varied across industries. Among the sectors most affected by the pandemic, the tourism and the accommodation and food services sectors showed a higher number of active businesses for the second straight month in July, reducing the gap with their respective pre-pandemic levels.