Canada's Business Closures Outpace Startups for Six Quarters: CFIB Calls for Urgent Policy Reforms — Canadian Federation of Independent Business (CFIB)

Event summary

Business exits in Canada have outpaced new business entries for six consecutive quarters, with exit rates reaching 5.6% in Q2 2025 and entry rates falling to 4.8% in Q4 2025.
CFIB's report highlights the need for policy reforms to reduce the cost of doing business, cut red tape, and address labour market challenges.
Proposed reforms include reducing the federal small business corporate tax rate from 9% to 6%, lowering provincial SBCTRs to 0% by 2030, and raising SBCTR thresholds to at least $700,000.
CFIB calls for streamlining internal trade, improving workforce quality through training incentives, and protecting the Temporary Foreign Worker Program.

The big picture

Canada's shrinking business landscape, marked by six consecutive quarters of business closures outpacing new starts, signals a significant economic challenge. The CFIB's report underscores the need for targeted policy reforms to support small businesses, which are critical to Canada's economic strength and productivity growth. The proposed measures aim to create a more favourable environment for entrepreneurship, addressing both immediate financial burdens and long-term structural issues.

What we're watching

Policy Response: Whether the federal government's upcoming spring economic statement will address CFIB's recommendations to reverse the entrepreneurial drought.
Regulatory Burden: The pace at which governments implement measures to cut red tape and reduce internal trade barriers.
Small Business Confidence: How proposed reforms will impact small business confidence and startup activity in Canada.