Toronto, October 22, 2026 – Nearly two-thirds (63%) of small business owners plan to leave their business in the next decade, but only 6% of owners have a formal succession plan in place, according to a new report by the Canadian Federation of Independent Business (CFIB). That leaves over $2 trillion in business assets at risk.
Retirement remains the primary reason for exiting (78%), but burnout or stress (21%) and high operating costs (20%) are also pushing business owners out the door. One in eight owners (13%) expect to close their doors altogether, a figure that rises to 17% among retailers.
These findings come as business exits have outpaced new entries in Canada since early 2024.
“Canada is in an entrepreneurial drought. With a wave of owners preparing to exit, we can’t afford to lose viable businesses because of the difficulty in navigating ownership transitions or finding someone to take over the business. That’s a huge blow to the economy, and it puts jobs and local services at risk,” said Corinne Pohlmann, CFIB’s executive vice-president of advocacy. “A successful handover keeps a business open and brings a new generation of entrepreneurs into the economy, which is why governments need to pay attention and help make it easier to buy and sell a business.”
For nearly half (47%) of owners, the biggest obstacle is finding a buyer or suitable successor. Being too busy to plan and experiencing difficulties determining the value of the business are the next most common barriers, at 37% each.
Most owners (54%) plan to sell to an unrelated buyer, while 28% plan to sell to employees. Family succession remains common, with 21% planning to sell to a family member and 19% planning to transfer the business to a family member.
Seven in 10 (72%) owners say keeping their business Canadian-owned is important, including 68% of those planning to sell to outside the family. These owners also put a high priority on protecting their employees (87%) and making sure the business keeps supporting its community (79%).
“There is an enormous opportunity for the next generation of entrepreneurs to acquire an existing Canadian business, but they risk missing out without more government action to promote opportunities that come with buying an existing business,” added Pohlmann.
To support business succession, CFIB is calling on governments to:
• Increase awareness, particularly among young entrepreneurs, about the opportunities and advantages of purchasing an existing business;
• Add a dedicated Business Succession Stream to entrepreneur immigration programs;
• Modernize capital gains rules, including a lower 33% inclusion rate on the next $2 million of gains beyond the Lifetime Capital Gains Exemption;
• Raise awareness of Employee Ownership Trusts as a succession option;
• Create a secure business transition marketplace, modelled on Repreneuriat Québec, that matches exiting owners with vetted successors;
• Explore ways to help first-time business buyers access capital, similar to supports for first-time homebuyers.
"Many business owners count on selling their business to fund their retirement. If they can’t find a buyer, they may have to delay retiring or close the business altogether,” said Marvin Cruz, senior director of research at CFIB. “A succession plan is the best way for owners to protect what they've built, and the earlier they start, the more options they'll have.”
Read the full report, Passing the Torch: How Canada's Small Business Owners Are Planning Their Exit and Why the Next Generation of Ownership Matters.
Business owners can visit CFIB’s website for more information on succession planning.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
Public.affairs@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.