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Can You Imagine a Canada Without Small Businesses?

Canada is in an entrepreneurial drought. For over a year, more people have been shutting down businesses than starting them. When entrepreneurship dries up, innovation and competition dry up with it.

Canada’s economy depends on the health of its small and medium-sized businesses. Today, more than half of business owners wouldn’t recommend starting a business thanks to rising costs, supply chain pressures, market uncertainty, high taxes and a heavy regulatory burden. Supporting SMEs isn’t just about individual companies, it’s about protecting the foundations of Canada’s economy.

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Key Trends at a Glance

Since early 2024, more businesses have closed than opened. By Q3 2025, closure rates were rising at some of the most concerning levels in over a decade — outside the pandemic.

Explore the Enterprise Pulse data. Numbers tell the story ›
↑19%
Business closures since Q4 2019
↑5%
New entries since Q4 2019
55%
of SMEs wouldn't recommend starting a business today

Source: CFIB Enterprise Pulse, Q3 2025

Everyone Feels the Consequences

Labour costs have climbed beyond sustainable levels, while consumer spending continues to shrink. Marketing expenses are rising as we work to reach new customers. We're facing entrepreneur exhaustion driven by economic uncertainty, constant regulatory changes, increased taxes, and relentless audits. Since 2020, it's felt less like support from government and more like a series of blows against small business.

Agriculture Small Business Owner

British Columbia

Unfortunately Canada has let its competitiveness slide and we have let US based companies come in and completely take over. ... I worry that we are too far gone, and we will never be able to get Canadian businesses back on track after all the destructive policy that has occurred over recent years. Under the current structure I would never in a million years recommend that anyone start a business in Canada.

Retail Small Business Owner

Ontario

It is not the best of times to start a new business.
However, there is no better option.

Enterprises & Admin Mgmt. Small Business Owner

Ontario

Taxes and red tape are slowing down long term investment into upgrading or expanding. Small business is the life blood of all communities ... It keeps dollars local and typically employs people from the community. As a province and country, we have been stagnant in all areas of the economy for too long...

Professional Services Small Business Owner

Alberta

Why You Should Care

The entrepreneurial drought is not just a statistic. It is a warning. If left unaddressed, Canada could face a future where opportunities for business ownership shrink, local economies stall, and innovation grinds to a halt.

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Small Businesses Support Communities

They create first jobs, back local teams, and keep neighbourhoods alive. When fewer open, those connections and the jobs behind them disappear.

Scenes from lives of small business owners
Entrepreneurship Drives Productivity

New businesses bring fresh ideas and competition. When fewer start, innovation and productivity weaken.

Small-business-owner-checking-fluctuations-of-canadian-economy-on-his-cellphone-EN
Canada’s Economy Loses Momentum

If this continues, expect slower growth and fewer chances for people to build something of their own through business ownership.

How CFIB is Working to Fix It

Canada’s entrepreneurial drought won’t reverse on its own. Governments need to take meaningful steps to make it easier to start, run, and grow a business.

CFIB is pushing for practical solutions that help small businesses right now. We are focused on what owners say matters most: reducing the overall tax burden and addressing rising prices and the cost of doing business.

Our priorities:

  1. Reducing tax and cost pressures that make running a business and hiring harder

  2. Eliminating red tape that eats up owner time and delays permits

  3. Removing barriers to entrepreneurship that make it harder to start, scale, or transition a business

CFIB is tracking the entrepreneurial drought across Canada and taking small business concerns directly to governments. Through data and real stories, we highlight what’s at risk and what needs action.

As the campaign expands, this page will be updated with fresh research, concrete solutions, and advocacy progress to help reverse the drought.

Join the Movement

Help us End Canada’s Entrepreneurial Drought
 
Sign Our Petition
Tell us About the Challenges You Face as a Business Owner/or Member
 
Share Your Story

Canada’s Entrepreneurial Drought

Full Report: April 2026

Coming soon

Frequently Asked Questions

1. What is an entrepreneurial drought?

An entrepreneurial drought is a period of four or more consecutive quarters in which business entry rates are lower than business exists, signaling a net loss of entrepreneurial activity.   

2. Why does this matter?

Canada is losing more businesses than its gaining; a warning sign for the health of the economy. When business exits outpace new business creation for a sustained period, jobs are under threat, local economies weaken, innovation slows and long-term economic momentum.

3. What is causing the entrepreneurial drought?

The drought reflects the wider set of pressures making entrepreneurship more difficult and less attractive. The high cost of doing business, tax and payroll pressures, complex rules, long wait times for permits, and ongoing labour challenges all weaken confidence and reduce risk tolerance, leading to fewer businesses being created, and ultimately over time, an entrepreneurial drought.

4. What is CFIB doing to address the entrepreneurial drought?

CFIB has been aggressively advocating to reverse the decline in business creation. We’re taking business owners’ concerns directly with key government decision makers to fight for tax relief, red tape reduction measures, improved access to labour and lower operating costs. Using survey data, member feedback and real stories, we highlight what’s at stake if governments don’t act now. 

5. Is the drought reversible?

Yes – but only if governments take it seriously and act quickly. With the right policy changes, including lower costs, reduced red tape, and better access to financing, Canada can strengthen the entrepreneurial landscape and encourage more people to start or take over businesses.

Entrepreneurship is resilient. Canadians want to start businesses, but the environment is pushing them away. With focused action, we can reverse the drought and regain the strong entrepreneurial growth Canada needs for a healthy, thriving economy.

6. I’m a business owner. How can I get involved?

Tell us about the challenges you face as a business owner by filling out this form and sign our petition to help pressure governments to end entrepreneurial drought.

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