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Business closures in non-metro Ontario to April, 2020

Date: August 19, 2020

In order to understand the impact of the COVID-19 pandemic on Ontario’s rural economy, the Rural Ontario Institute has published monthly “special issues” of the “Focus on Rural Ontario” factsheets to document the impact of COVID-19 on rural employment. For the update for employment for July, 2020, see COVID-19 Impact on Rural Employment: Ontario in the Canadian context in July, 2020.

To see the impact of COVID-19 on business closures, Statistics Canada has recently published “experimental data” on active business, business openings and business closures**. An active business is defined as having some paid employees in a given month, a business opening is an enterprise with no paid employees in the previous month but some paid employees in the current month and a business closure had some paid employees in the previous month but no paid employees in the current month. Thus, a business closure includes cases when a small firm goes out of business, when a large firm closes an establishment temporarily or permanently and when a seasonal firm ceases business activity for the year.

In non-metro Ontario, from January to April, 2020, the number of active businesses declined by 5,800 businesses – a decline of 12% (marginally less than the 13% decline in metro areas). This decline was due to 18% fewer businesses openings and 243% more business closures.

In Ontario (in metro and non-metro areas), the sectors with the largest decline in active businesses were:

  • 21% : accommodation and food;
  • 19% : other (personal) services;
  • 17% : transportation and   warehousing;
  • 15% : retail trade; and
  • 15% : arts, entertainment and recreation.

Not surprisingly, this aligns with the hit of COVID-19 on rural employment published in recent special issues of Focus on Rural Ontario.

These are the highlights of a special issue of the Rural Ontario Institute’s “Focus on Rural Ontario” that was published today – see Business closures in non-metro Ontario to April, 2020.

 

** See Amelie Lafrance-Cooke, Ryan Macdonald and Michael Willox. (2020) Monthly Business Openings and Closures: Experimental Series for Canada, the Provinces and Territories, and Census Metropolitan Areas (Ottawa: Statistics Canada, Economic Insights, Catalogue no. 11-626-X — 2020014 - No. 116). (https://www150.statcan.gc.ca/n1/en/catalogue/11-626-X2020014)