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Thomas StorringDirector – Economics and Statistics
Tel: 902-424-2410Email:

November 21, 2018

Statistics Canada has released the 2016 results for provincial and territorial business and employment dynamics.  This covers incorporated and unincorporated businesses in the private sector that issue at least one T4 slip in any given calendar year, but excludes self-employed individuals or partnerships where the participants do not draw salaries. 

In 2016, there were a total of 21,010 active businesses in Nova Scotia, including 23,840 incumbents (continuing operations from previous years) as well as 3,170 new entrants.  This was offset by exit of 3,150 firms from the numbers of previous incumbents.  Entrants in any given year are enterprises that have current payroll data, but that did not have payroll data in the previous year. Similarly, exits in any given year are identified by the absence of current payroll data, where such data had existed in the previous year. 

Measured in percentage terms (relative to an average of prior and current year totals), the entry rate for new firms was 11.7 per cent.  The entry rate for firms was declining but has risen from its most recent trough in the last couple of years.  The exit rate for firms decreased to 11.6 per cent in 2016, down from 13.4 in 2008 and down from 11.9 in 2015. Compared with the pre-recessionary period before 2008, but exit and entry rates are down for Nova Scotia businesses.

By sector, unclassified businesses accounded for a notably faster entry rate.  Among classified sectors, the fastest entry rates were reported in transportation,  real estate/rentals, professional/technical services and construction.  Entry rates are slower for wholesale trade.

The fastest exit rates were also reported among unclassified businesses.  Within those businesses classified to a sector, the fastest exit rates were reported in information and culture, mining/oil/gas, and management of companies.  The slowest exit rates were observed in wholesale trade and arts/entertainment.  

Statistics Canada's business employment dynamics data also examines employment changes in the private sector.  In 2016, there was net private sector employment creation of 0.2 per cent in Nova Scotia, up from -1.3 per cent in 2015.  

Net employment growth in 2016 is broken down into four subcomponents of gross employment creation and destruction: employment creation by entrants (1.4%), employment creation by growing incumbents (7.9%), employment destruction by exits (1.2%), and employment destruction by declining incumbents (7.4%). 

In all years since 2000, most net private sector employment change is explained by employment creation or destruction by incumbents rather than by new entrants or exiting firms.

Both gross employment creation and gross employment destruction trended up from 2014 to 2015 before both slowed in 2016, with destruction slowing more than creation. Employment turnover has been lower in the post-recessionary economy than it was prior to 2008.  

The contribution that each sector makes to overall employment dynamics depends on its share of overall employment and its gross employment creation or destruction.  Sectors such as manufacturing, retail, wholesale, finance/insurance, administrative and support services, information and culture, and accommodation/food account for a larger share of total employment than their share of active businesses.

The largest contributions to gross employment creation in 2016 came from retail, construction, accommodation/food, and manufacturing employers.

The largest contributions to gross employment destruction in 2016 were reported among the same four sectors that accounted for the most employment creation with administration destruction outpacing accommodation. Construction and manufacturing reported net employment declines while accommodation/food and retail trade reported net employment increases.

Compared to other provinces in 2016, Nova Scotia's Business Entry rate was lower than all provinces except Quebec, and Nova Scotia's Exit rate was higher than only Quebec and Manitoba. Highest entry rates were seen in Prince Edward Island (16.0 per cent) and in BC (14.0 per cent), and highest exit rates were in Alberta (15.9 per cent) and PEI (14.4 per cent).

Statistics Canada.  Business and employment dynamics data, for each province and the territories, 2016

Tables 33-10-0087-01, 33-10-0088-01, 33-10-0089-01, 33-10-0090-0133-10-0091-01 and 33-10-0093-01 

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