Canadian businesses are shutting their doors at a rate the country hasn’t seen since the start of the pandemic.
Driving the news: The number of active Canadian businesses in June fell to just over 929,000, the biggest monthly decrease since May 2020. According to Statistics Canada, 5% of all businesses in the country shut their doors in the month.
- The closures weren’t offset by new businesses either — June saw the lowest rate of new business openings in over a year.
Why it’s happening: Business closures were at historic lows after the feds doled out $49 billion worth of loans during the pandemic, but since the final repayment deadline for those loans passed earlier this year, the tide has shifted.
- In the first three months of this year, Canadian business insolvencies in a quarter reached their highest point since the start of the global financial crisis in 2008.
Why it matters: It’s not just bad news for your favourite mom-and-pop restaurant, it’s another symptom of an economic slowdown that’s threatening to turn into a full-blown recession.—LA