Government Report: More than 130,000 Businesses Shut Down in Canada as a Result of COVID-19 Lockdowns
The COVID-19 pandemic caused the loss of over 131,000 businesses in Canada by the end of 2023, as per the latest annual Key Small Business Statistics report from the Industry Department. This represented an 11 percent decrease in the total number of businesses. Of those lost, more than 125,600 were categorized as small businesses, which are firms with 1 to 99 paid employees.
In the report released in March, it was revealed that Canada had a total of 1,095,251 businesses of all sizes and types by December 2023. This showed a net loss of 131,203 compared to the figure of 1,226,454 in December 2019 from the report published in 2020.
Small businesses, which make up around 98 percent of all businesses, were impacted the most. By December 2023, there were 1,074,939 small firms, reflecting a net loss of 125,632 compared to the 1,200,571 in December 2019.
The largest decline was witnessed in the Canadian retail sector in 2020. The onset of the pandemic saw a significant 26.4 percent drop in retail sales in April compared to the previous month, falling from $47.1 billion to $34.7 billion, as reported by Statistics Canada.
A Bank of Canada study on business closures during the reopening phase of the pandemic indicated that approximately half of the food and retail businesses that closed during the April 2021 lockdown remained shut at the end of that phase. Referred to as “business hibernation,” the bank’s report examined 12,976 businesses across Toronto, Vancouver, and Ottawa, focusing on bars, restaurants, shops, nightclubs, and motels subject to lockdown orders in April and May 2021.
“About half of businesses recorded as temporarily closed in May had reopened by the end of September,” the study mentioned, with 40 percent still in a hibernation phase and 10 percent permanently closed. The report highlighted Google Places’ role in providing real-time data on business exits, temporary closures, entries, and reopenings within customer-facing industries.
