Fewer Canadians starting companies

Canadians remain reluctant to start new businesses.

About 43,000 Canadians started a new business in 2011 and hired staff, finds the Business Development Bank of Canada (BDC).

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This amounts to only 0.23% of the 19 million people in Canada who can work—a slight increase from the 2009 recession low of 0.22%. Last year’s rate was also well below the pre-recession high of 0.30%.

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“The slow economic recovery appears to have discouraged risk-taking on new business ventures,” says says Pierre Cléroux, BDC’s vice president, research and chief economist.

He adds, “This is a concern because entrepreneurship is an indicator of economic dynamism, creates jobs and drives innovation.”

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Additional findings include:

• Immigrants are highly entrepreneurial, with 0.35% starting new businesses that created jobs in 2011—nearly double the 0.20% rate of non-immigrants;
• Ontario, British Columbia and Quebec have seen modest recoveries in entrepreneurial activity, but the Prairies and the Atlantic provinces are still struggling;
• Those aged 45 to 54 have seen their index shoot up from 0.18% in 2008 to 0.27% last year, while those 55 years and up have gone from 0.09% in 2008 to 0.17% in 2011.

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