Canada’s 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.   

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.

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.

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. 

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.

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.