---
title: "ICBA EconoBot | Canada's Entrepreneurial Drought: Six Quarters of Business Closures Outpacing Openings"
description: "Canada faces an ongoing \"entrepreneurial drought,\" with business closures outpacing openings for six quarters. High costs and regulatory burdens hinder growth."
---

[Economics Blog ](https://icba.ca/economics-blog)

# [ICBA EconoBot | Canada's Entrepreneurial Drought: Six Quarters of Business Closures Outpacing Openings](https://icba.ca/economics-blog/icba-econobot-canadas-entrepreneurial-drought-six-quarters-of-business-closures-outpacing-openings)

 Written by [Jordan Bateman](https://icba.ca/economics-blog/author/jordan) | Apr 16, 2026 3:49:55 PM

***PLEASE NOTE: ****We are presently testing an ICBA EconoBot -- a twice-a-week, AI-led curation of economic news important to ICBA members in B.C. and Alberta. Soon, ICBA members will be able to subscribe to get the briefing in their email inboxes.  
*

*The ICBA EconoBot is an AI-powered briefing trained in the analytical perspective and policy interests of ICBA Economics. **Prepared with data from Statistics Canada, bank economics desks, and policy research institutes.*

**TOP STORY**

**Canada’s Entrepreneurial Drought: More Businesses Closing Than Opening for Six Straight Quarters**

The [Canadian Federation of Independent Business released a damning new report yesterday](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxKb5kvg8W5BWr2F6lZ3kSN10y2WtxMK_8W7JM5kV6pDX4YVDZBxn5B-q_4W7SFlmp5KkVZdW4ZJH6L2cR4K-N5GpVDNKg-q4W4BYXLs4bKngvN6yw-8bd_6VkW6zGzgy19_PwlN6qky17d3f-JW5vbwrH3QJSJjW2y7Nxg4-p4GqW63Gx0q4RsmBLW8t7_z64HKFnZN99xYt7YYV6yW2QNXW56vVD_hW3fJ9nx8rz13qW2tkXGg1zBhJVW3h2zbS1F7bSBW50-L_M6Nz-cyW7ysvM_5QTZybW763fqg1XCd4kW922Z5w8YtNHpW87Qq7b7KdcjCW24bbjd3nZ1g9W1KCr4J3x2StLW988cGh95N_RNW1WMzTC6TwQ7jW8_c2yW3517SKN4y9bQFSbJjLW1GsBrG2yxq6xW8ltbNp4Xbp9FW394XKf2qLC4ZW3NcCDl8rd6Lmf7B72Db04): more businesses have closed than opened in Canada for six consecutive quarters — a sustained “entrepreneurial drought” not seen outside the pandemic. Exit rates hit 5.6% in Q2 2025 while entry rates fell to 4.8% in Q4, and 55% of small business owners say they would not recommend starting a business right now. The culprits are familiar to anyone in construction: high costs, tax and payroll pressures, red tape, labour shortages, and unrelenting uncertainty. CFIB’s [full report](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxLn3lYM-W7Y8-PT6lZ3lDW4WjdPY7H6njgW2-ndz11c9j-NW86x_HC8hRtrJW9614WH2_HWL6W2gY7Fv6mGQvjW35Fcyc2llz47W22ZFB92FYfgcW5yBwfy1QNbNYW7ZD8v522wZw0W4K5kx_7MQN7TW49yRn68CgGfVW1vstl_5JvlpvW5rrcyv2kXT8vW5h3wby4BkFR3W4NRSZH2tpW3_W3vVYrv21pLXpW1Yvb3c1P_xZhW3Z9gVV3_cRL_W8yvTpP3qLg9ZW3CTMl21v_Js9W4yxCYZ1wbWKXW4XXKmC6tW4q8W7LBnY_1Wb8-_W7FGFNc1zj11gW9jyGWf4Z6SsfN7rzlMqCT9Qvf3nGgln04) shows the overall trend of business creation has been declining since the mid-1980s, but openings had at least outpaced closures — until now. Two-thirds of small firms feel unsupported by their provincial governments, and 73% lack confidence in Ottawa. As CFIB put it: governments need to stop papering over the cracks and refocus on policies that actually improve the small business environment. Part 2 with policy recommendations drops April 28.

 

**THE NUMBERS — STATISTICS CANADA**

**Manufacturing Sales, February 2026** — Sales rose 3.6% to $71.2 billion, rebounding from January’s 3.1% drop. Transportation equipment surged 18.8% as auto plants restarted after retooling shutdowns. Primary metals hit a new record at $6.5 billion (+4.9%) — watch for tariff-driven price effects baked into that number. Unfilled orders also reached a record $117.6 billion. [Statistics Canada](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxL43lYM-W7lCdLW6lZ3ptW2QRj6Z8Tf5fYW63JnZ05D2N1CW2dtdYj8B4y1gV8k5M41cMtT_N4dS68DkVLVqMjRbt9WMX5QW3CjnSd68flXyW3TwPPZ3N_YM6W8s-sVh8QtC7-W2b5Jyw41kf-RW1wGvfF8xcDhyW1DFvYr2j7rkTW3yBPQS3g9NKZW6wC4W04_GrmzN8ZGWfnj4FD-W3rQg8T93G92PW3CWG227J5DFvW4Gt-N572WcrKN2Z6blsJpXpMW8BN1jB34CKG3W5WcxD-407BksW45-Nhp3lB1x3W7bn6Y15c3MfNW6w-9nY68lNQsf39s6w604)

**Wholesale Trade, February 2026** — Wholesale sales rose 2.0% to $86.8 billion, with motor vehicles and parts leading the way (+6.1%). The inventory-to-sales ratio dropped from 1.60 to 1.56, suggesting supply chains are tightening slightly as businesses move product ahead of anticipated tariff disruptions. [Statistics Canada](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxL43lYM-W7lCdLW6lZ3ncW1RkGGT295T3GW8Pt_D05v4km0W3tWvmH1PKpTXW6dN6zH49PHKgW39hfk-65T7bnN5GxbB4HSwHFW8M3gp88pm0bJW5_lX726-_B3pN19ssVCL5TpwW4JyWDS2WK5NrW7ZzN9v4CY0H3W3NWsBC50LxHzW6NQkxf6fH1vYW9jMshm3YJBrBW5ttSnf90CGx5W3hPjg44f0mJkW3gn0XN85xpd0VXVVl58fjNl4W6fr2Yf3rbJNVW19862P1Z1WG5W6n2ZqD2zzc5ZW2kntDW8FG4WjW18NkWZ2DV2xLVXC8LT1RG8yMf88WM6x04)

**National Input-Output Tables, 2024** — New tables for 2024 released alongside revisions to 2022 and 2023. These provide the most complete picture yet of inter-industry flows in the Canadian economy — useful for anyone tracking construction’s upstream supply chain dependencies. [Statistics Canada](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxKP3lYM-W6N1vHY6lZ3kDW814b5H80H1c2W1KqpWp5l0fwpN6mddD-Xb8GsN1Fxl1-b-wq7W4WzfgB7YXjvVW8QFpW87jT_1-W4Cd72H2hVXdwN7lx1bQ_cqP4W5m2SQ42kKSzJW2VmYhr98528wW2CBPKq3XJM_hVyGmM51Vb8T4N7-Yc-8P22Y3W1-tPM67N9FfQW489hXW35PCb_VLxx8w68z9NSW21z8p47-RThJW5KpFCh6DsVftW36yK9899X0pxW4gdZnb2b5-PjW1n0Cqp683XY-Vx1xk82S_RGKf4wmP7K04)

 

**FROM THE ECONOMISTS**

**Charles Lammam** — [*How Canada’s Economy Is Choking from Federal Regulations: 7 Graphs*](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxLn3lYM-W7Y8-PT6lZ3nFW6b8V2n7nKqP7N7Mnnstv9WLBW5Z5CXL8tFwhWW1ThPt_7h92FFN9dksZ0WJsjwW180-Jf3FWPf8V4976S6-z6W5W2CS6ps8wlXGFW4mnZzT5DJk9vW6D-7Tk1bx9RjW3tl5L67-wQF8W1TW4mD4Tr9yZW5q8yh32Zgcd8W6TCJ3F236FC8W7kT4Qf8x6sd2VG8nMq5Dvl67W83VnPQ8g7HcvW8tZswS7WJs2TVsyY3W5f-vDMW8nmVvl5HLZksW98c6l-2qDK7bW3Rq3zR6WK18YN7DHR271N8GLW4RzVTz5dwP2MW2jv2fl2P9hyPW8fDlFj7bpXZGdqw4Sb04) — Writing for The Hub, Lammam marshals the data on Canada’s regulatory burden: dead last among 25 OECD peers on business location rules (land, permits, property transfers), 33rd of 101 countries on the World Bank’s regulatory framework metric, and a 37% rise in federal regulatory restrictions between 2006 and 2021. Construction permits take roughly 250 days in Canada — three times the U.S. average. The Business Council of Alberta’s new *From Barriers to Breakthroughs* roadmap calls it the single largest barrier to investment in the country. A must-read for anyone wondering why projects don’t get built.

 

**WORTH WATCHING**

**Iran Ceasefire Expiry — April 22** — The two-week U.S.–Iran truce is wobbling after direct talks ended without agreement. [TD Economics warns](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxKP3lYM-W6N1vHY6lZ3kGW8rzZd-2w8ytvVgnlq46JHHlGN7htvfQ-mzlJW5H4m094M1l1xN8VMdrPCZlvCW3x3X3f4BTLM_W7YGqF33BNKwpW3qMJxD2y9NcLV7FPZ95gGsGlW2ZTsRr1FR28PW7Ksv2v1wt5LLW77b4mV66bv2nW5KQZTh9hyH-kW5bmCMj7NDFcHW7gCCvk1Fl2W5Vrkywp6Gwl6TW85ymPf55cFhMW6HyBBB3CZ2dtW8hL8GH9fKy4LW7ZcS8l75k5TkVd8vFm8qTx2nW4308q65K5hCwf35DgJY04) a structural supply shortfall of 7–10% of global production keeps oil balances tight, with Brent retesting US$120/bbl if the truce collapses. For BC and Alberta contractors, diesel, asphalt, and transportation costs remain sharply above pre-war levels.

**CMHC Housing Starts (March)** — Released tomorrow (April 17) at 8:15 AM ET. February’s SAAR was 250,900 units, up 4.5% from January. With ConstructConnect forecasting a 5% decline in residential starts for 2026, March data will test whether the early-year rebound has legs.

**CPI (March) — April 20** — February headline inflation eased to 1.8%. March will capture the first full month of Iran-war energy price spikes, likely pushing CPI higher and further sidelining any BoC rate cut hopes ahead of the April 29 decision.

 

**IN BRIEF**

**CMHC** — A new [CMHC study](https://icba.ca/e3t/Ctc/JB+113/dM9-w704/VWJB9J8l7VssW7wGK5g60cClyW44_bnN5MYCWcN4qMxJW5kvg8W50kH_H6lZ3pYW6jjccS3FFt67W2YH8nB5wjMPVW60Gb3K2g_WKGW2CpFCd94XbShV_nGt13kSly9W77hlvk4mFXrTW4HdLVq1QWYxqN4frbCQwpzBKW6CPbM17k4z-JW7cQ2Lg9kYFYsW57yk2f3T-QY3V1sW_P4Kq8NTW3rVHR132d2D3W21W3m17J7jZ1W6ZfSc91vW22lF10YYBp6_92W7CVK7g4drw9mW4sCvN78z0gZzW45xd6t3HQnY9W6hfSyX5g2s1vW8ssnyw2fGDlqW2bZ6vz2vNCFfW5wT6yJ1L3ZxXW31C8_w91Rx5cW3rVGBf2vWq6rW3v0W6f30QRZXW79j-Lz2lHLvtW35lDHP6H--7DW7sqQVN6bN82VW9dPwQt3cKzZ7W6bTbHg2HtkNrN7RpByNqZ3gsf10YqnC04) finds housing construction labour productivity has fallen 2.1% per year over two decades — a cumulative 37.3% decline. Small firms (under 20 employees) account for the bulk of the drop. Ontario drove more than half the national decline — the only province where no firm size segment improved. B.C. made a positive contribution nationally, but only because its share of construction activity grew, not because firms got more efficient.

[View full post](https://icba.ca/economics-blog/icba-econobot-canadas-entrepreneurial-drought-six-quarters-of-business-closures-outpacing-openings)

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