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March 29, 2021BUSINESS OPENING AND CLOSING, DECEMBER 2020 Statistics Canada released updated data on monthly business openings and closures for December 2020. A business will be classified as open if it had no employment in the previous month and then has employment in the next month and a business will be closed if it had employment the previous month and no employment in the current month. For opening and closing, the reason could be a permanent change (i.e. business exit) or temporary for reasons such as seasonal operations, capital maintenance, restructuring or the COVID-19 situation. Continuing business are those that had employment in both the current and previous month. Active businesses are the sum of continuing and opening business in the current month.
The number of active business declined sharply in every province in March, April and May. In June and July, the number of businesses started to recover, with gains in all provinces.
Additional public health measures were implemented across some provinces in October and November to limit the spread of the second wave of the pandemic, and these were largely unchanged in December 2020. In December, the number of business closings decreased 0.8% in Canada and business openings declined 1.3%. Active businesses were up slighly in December but remain 3.6% lower than February 2020.
In December, the number of active businesses increased by 1.0% in Nova Scotia. Active businesses were up 0.9% nationally with increases in all provinces. Saskatchewan reported the largest increase 1.1% and Manitoba (+0.1%) the smallest.
Compared with February 2020, the number of active businesses was down 2.3% for Nova Scotia in December 2020. Nationally, active businesses are lower by 3.6% from February to December 2020. The number of active businesses was down in all provinces compared to February 2020, with the largest decline experienced in Ontario (-5.4%).
Among cities (Census Metropolitan Areas), the declines in active businesses from February to December were most severe in Toronto (-5.6%) and St. John's (-5.5%). There were 0.8% fewer active businesses in Halifax in December when compared to February 2020. This was a larger decline in the rest of Nova Scotia. Kelowna, BC is the only CMA with an increase in active businesses.
The calculation for the opening, continuing and closure rate have been made based on the number of active business in the previous month. The rate at which business either opened, continued or closed can be examined to see how number of active business has changed.
Most businesses continue operating each month. At the height of COVID-19 related restrictions, the share of businesses that continued to operate from one month to the next fell to 89.5% in Nova Scotia, down from 95.0% in February 2020. National continuing rates fell from 95.6% in February to 89.0% in April 2020.
Business continuing rates rose sharply by July, reaching 97.3% in Nova Scotia and 95.7% nationally. Since then, there has been some decline with December business continuing rates slipping to 94.7% in Nova Scotia. National business continuing rates increased to 95.4%.
Nova Scotia’s business opening rate declined from 4.1% in February to 3.1% in April. By June, the Nova Scotia business opening rate increased to 7.8% as the economy re-opened and restrictions were lifted. From July to December, Nova Scotia's business opening rate declined back to be closer to pre-pandemic levels, falling to 4.9% in December. Nationally, the opening rate did not decline substantially in March and April, and increased in June and July. Since July, the national business opening rate has declined, falling to 5.6% as of December.
The rate of business closures in Nova Scotia was 4.0% in February 2020. This increased to 14.1% in April and has subsequently fallen to 3.5% in December. Nationally, the business closing rate increased from 4.5% in February to 12.7% in April. As of December, the national business closing rate was 4.4%.
The COVID-19 situation has impacted business sector industries to different degrees. Nova Scotia active business were lower in many sectors when compared to February. Nova Scotia's largest declines were observed in forestry/fishing (-6.1%), mining, oil and gas (-5.0%), construction (-4.9%), and real estate/leasing (-4.8%). Most sectors had fewer activity businesses in December 2020 than February 2020 with increases in information and culture; arts, entertainment, and recreation; and finance and insurance.
Nationally, the number of active businesses was down for all industries, with a notably steeper decline in accommodation/food services as well as arts/entertainment/recreation and real estate/leasing.
Statistics Canada has broken out specific data for tourism-related industries. This shows that the number of active tourism-related businesses was down 3.4% in Nova Scotia from February to December. Nationally the decline was 8.3%. Compared to the national average, Nova Scotia has had larger declines among active businesses in accommodations. Nova Scotia's declines in active tourism businesses have been smaller than the national average for all other tourism related industries.
All industries in Nova Scotia that reported declines in active businesses during first-wave of the pandemic have seen partial or complete recovery since May.
The source data is seasonally adjusted. The data may not aggregate due to firms being classified into multiple industry or geography.
Source: Statistics Canada. Table 33-10-0270-01 Experimental estimates for business openings and closures for Canada, provinces and territories, census metropolitan areas; Methodology: Business Opening and Closing
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