The Canadian Federation of Independent Business (CFIB) has reported that small business owners in the country have closed more businesses than opened them for six consecutive quarters, with 55 percent of owners declining to recommend launching a business at this time.
“We cannot afford to regulate ambition out of our economy,” said Brianna Solberg, CFIB director for the Prairies and the North, in a media release. “When more than half of current small business owners are telling you they wouldn’t recommend starting a business, it’s time to listen.”
CFIB’s recent report titled “Canada’s Entrepreneurial Drought, Part 1: The Shrinking Business Landscape” is the first in a two-part series addressing the increasing imbalance between Canadian business creations and terminations.
In the mid-1980s, despite the overall decrease in new businesses, CFIB noted that openings tended to outnumber closures. Beginning in early 2024, CFIB’s research revealed an “entrepreneurial drought,” defined as at least four straight quarters in which business exits exceeded entries.
In 2025, CFIB recorded business closure rates of 5.6 percent in the second quarter and opening rates of 4.8 percent in the fourth quarter, representing some of the highest exit rates and lowest entry rates beyond the COVID-19 pandemic.
Michelle Auger, CFIB director of trade and marketplace competitiveness, urged Canada’s governments to pay attention to the needs of small businesses by lowering taxes, reducing regulatory burden, and encouraging entrepreneurship and investment.
In the media release, Auger criticized governments for handing out billions of dollars to multinational corporations while ignoring the struggles of small businesses.
“Governments need to wake up,” Auger said. “If we want a more productive and competitive economy tomorrow, we need more small businesses today.”
Per CFIB’s report, among small businesses surveyed:
- Two‑thirds felt unsupported by their provincial government
- Just three percent strongly believed their government had clear plans to support entrepreneurship
- 73 percent were not confident in the federal government
“Canada’s economic foundation is crumbling,” Solberg said in CFIB’s media release. “Governments need to stop just papering over the cracks and really refocus efforts on policies that improve the small business environment.”
CFIB shared that small businesses surveyed perceived entrepreneurship as more difficult and less appealing amid challenges concerning costs, taxes, payroll pressures, labour, complicated rules, red tape, and economic uncertainty worldwide.
Ontario
In Ontario in 2025, CFIB recorded business closure rates of 6.7 percent in the second quarter and opening rates of 5.1 percent in the fourth quarter.
“Since 98% of all businesses in Ontario are small, it’s important to maintain the right environment to welcome new small businesses to the province and help nurture their growth,” said Joseph Falzata, CFIB Ontario policy analyst, in a media release.
“While Ontario’s actions to cut small business taxes, reduce red tape, and improve labour mobility will go a long way towards addressing this critical issue, the work of cultivating the province’s job creators never ends,” added Julie Kwiecinski, CFIB Ontario provincial affairs director.
Nova Scotia
CFIB highlighted Nova Scotia as the sole province displaying modest business dynamism from 2015–19. CFIB added that Nova Scotia saw a moderately strong post-pandemic recovery until the end of 2024.
However, CFIB acknowledged that Nova Scotia’s momentum in terms of business openings has since slowed. CFIB said the province’s recent data may indicate weaker confidence in entrepreneurship.
Prince Edward Island
Frédéric Gionet, CFIB Atlantic director, shared that small businesses on PEI are experiencing pressures that deter them from proceeding with openings, including rising costs and increased regulation.
“Small businesses remain a critically important component of Prince Edward Island’s economy, but right now many owners are questioning whether the environment is still worth the effort,” Gionet said in a media release.
Newfoundland and Labrador
Jonathan Galgay, CFIB NL director of legislative affairs, called on Canada to help small businesses enter the market, expand, and succeed.
“While governments continue to invest heavily in large corporations, small businesses on Main Street are being left to navigate rising costs and regulatory burden on their own,” Galgay said in a media release.
New Brunswick
“Small businesses remain a critically important component of New Brunswick’s economy, but right now many owners are questioning whether the environment is still worth the effort,” said Louis-Philippe Gauthier, CFIB Atlantic vice president, in a media release.
CFIB plans to release the second report in its series on Apr. 28. “Fixing Canada’s Shrinking Business Landscape” will include practical recommendations for governments to tackle the country’s “entrepreneurial drought.”