Canada’s Entrepreneurial Drought: Startup Rates Drop 50% Since 1980s

A recent report from the Canadian Federation of Independent Business (CFIB) reveals that Canada is experiencing a sustained decline in entrepreneurial activity, with business entry rates having fallen nearly 50% since the mid-1980s and remaining at historic lows.

The report, titled “Canada’s Entrepreneurial Drought,” highlights that since early 2024, more businesses have been closing than opening, marking one of the worst periods for business dynamism outside of the pandemic.

In the third quarter of 2025, business exit rates reached 5.8% while startup rates fell to 4.9%, figures described as among the weakest in a decade outside of pandemic-related fluctuations.

The CFIB emphasizes that small and medium-sized enterprises (SMEs) employ more than 60% of Canada’s private-sector workforce and are critical to innovation, competition, and local services.