In this week’s EconMinute, we’re talking about business creation.
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Alberta’s economic recovery can be measured and described using a variety of indicators, including: [un]employment rate, net-interprovincial migration, GDP growth, venture capital investment, and the provincial fiscal balance sheet. By all these accounts, Alberta’s economic recovery is ongoing and strong.
There is, however, one indicator that does give us reason to pause our recovery-themed optimism—business creation. The number of active businesses in Alberta has been largely stagnant throughout 2022. This contrasts with many other provinces that have continued to see increases in the number of active businesses over the year.
One potential reason for this might be that other provinces are still recovering from COVID-related shutdowns while Alberta has already successfully regained all those lost businesses.
Unfortunately, that’s not the case. In fact, Alberta and Newfoundland and Labrador, are the only provinces where the number of active businesses has not yet returned to February 2020 pre-pandemic levels.
Here’s what the data show:
- In April 2022, Alberta had 117,965 active businesses compared to 119,459 in February 2020—representing a 1% decline.
- Over the same time period, Canada experienced a 2.2% increase in the number of active businesses.
- In April 2022, Alberta’s business opening rate (5.0%) closely matched the business closure rate (4.9%).
- The number of active businesses in Alberta has been steadily declining since 2015 (the earliest available data). Since January 2015, Alberta has lost nearly 10,000 businesses (7.0%).
- The opposite is true for Canada. Since January 2015, the number of active businesses in the country has grown 6.2%.