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Key Small Business Statistics - January 2009
How many businesses appear and disappear each year?
Thousands of businesses enter and exit the marketplace throughout the year. Keeping track of these births and deaths is no easy matter. In July 2008, Statistics Canada made available data on SMEs in Canada through the Small and Medium-Sized Enterprises Data Warehouse (SMEs Data Warehouse).
Figure 2 shows the number of small businesses (those with fewer than 100 employees) that entered and exited the marketplace annually between 2002 and 2006. Over this period, 130 000 new small businesses, on average, were created in Canada each year. There was no clear pattern of business entries over the period. In 2002, there were approximately 115 000 entries, increasing to 135 000 in 2003 and falling back to 111 000 in 2004. In 2006, the number of entries attained a peak of 164 000, representing 45 000 more new businesses over 2005. The number of exits decreased gradually from approximately 120 000 in 2002 to 82 000 in 2004. In the following two years, the number of exits grew to more than 200 000. On a net basis, there was a positive number of entries in only two years of the study period: 2003 and 2004. In 2005, there were about 100 000 net exits. This high number of exits is mainly due to increases in exits among businesses with revenues under $30 000 (these were not considered in previous editions), as well as exits in the construction industry, retail trade and professional, scientific and technical services. Together, they represented about 80 percent of all exits in 2005.
[Description of Figure 2]
Source: Statistics Canada, Small and Medium-Sized Enterprises Data Warehouse, July 2008.
Bankruptcy statistics
Only a small proportion of firms that exit the marketplace end up filing for bankruptcy. On average over the last 18 years, there have been approximately 12 000 business bankruptcies per year in Canada. In the 1990s, they gradually increased from about 11 000 to a peak of more than 14 000 in 1997. Since then, business bankruptcies have been on the decline, to about 6300 in 2007.
More detailed statistics on business bankruptcies and the liabilities involved are regularly reported in Industry Canada's Small Business Quarterly (www.ic.gc.ca/SMEquarterly) and are also available on the website of the Office of the Superintendent of Bankruptcy at http://www.osb.ic.gc.ca.