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Active Canadian Businesses Fell 14% in First Stage of Pandemic

Active Canadian Businesses Fell 14% in First Stage of Pandemic

The number of active Canadian businesses dropped by 14% in the earliest months of the pandemic, according to a government report.

Establishments that reported having at least one employee totaled 689,907 in May, compared with 797,582 in February, the last month before Covid-19 caused nationwide lockdowns, Statistics Canada reported Wednesday. The number of active businesses fell 3.6% compared with April, the data show.

Most parts of the Canadian economy have reopened since May, but policy makers have warned a full recovery may take years, and it remains to be seen to what extent business closures will become permanent.

The Statistics Canada report gave monthly figures for active, closing, opening and ongoing businesses back to 2015. It showed the total number of active businesses was down 14% in May from the same month a year earlier.

Active Canadian Businesses Fell 14% in First Stage of Pandemic

The agency said 209,778 businesses closed during March, April and May, meaning they went from having at least one employee in the prior month to having zero. Over the same period, 106,826 businesses opened.

Accommodation, food, construction and retail trade have been the hardest hit industries as Covid-19 restrictions remained in place for most of May in many provinces. The number of active businesses in the accommodation and food sector was down 15,739 from February, in construction they dropped 14,489, while in retail trade they fell 12,355.

Still, Statistics Canada said fewer businesses closed in May compared with April and more opened as restrictions began to ease.

©2020 Bloomberg L.P.