Since 2015, the rate of business closures in Canada has fluctuated, with significant increases during periods of economic disruption, particularly the COVID-19 pandemic. Between 2015 and 2019, the average monthly business closure rate was around 4.6%, but this spiked to over 7% in 2020 due to the pandemic. More recently, in 2024, the closure rate reached 5.0%, which is above the historical average for the pre-pandemic years.
The acceleration of closures is driven by factors like inflation, rising input costs (e.g., commercial rents), and economic pressures such as high debt levels. In June 2023, for instance, business closures surged by nearly 15% compared to the previous year, marking one of the highest rates since early 2022. At the same time, business openings have slowed significantly, hitting lows not seen since the early pandemic lockdowns.
This trend reflects the ongoing challenges Canadian businesses face, particularly small enterprises, in navigating an increasingly volatile economic landscape. Despite some recovery efforts, the balance between business openings and closures remains under strain, with closures often outpacing new business creation