Small business statistics Canada 2026: 1.08 million small firms, and openings beat closures by 975 in a year

Key small business statistics for Canada: 1.08 million small firms and 5.8 million jobs

Canada's small firms outnumber its large ones by about 319 to 1. ISED counts firms with 1 to 99 paid employees as small, so people who work alone with no staff aren't in its count.

The 938,951 is Statistics Canada's payroll count of active employers in the business sector. It leaves out firms mainly in agriculture, fishing and trapping, private household services, religious organizations and public administration, so it runs below ISED's 1,099,521.

Size at birth decides a lot. ISED found that 91.2% of new firms from 2018 to 2022 opened with 1 to 4 employees, and those are the ones that close fastest. One in four is still going after 20 years. Firms that open with 20 to 99 staff keep 35.0% alive that long.

How many small businesses are in Canada?

Canada had 1,079,188 small businesses in December 2024, out of 1,099,521 employer businesses, per ISED's Key Small Business Statistics 2025, which ISED last updated on 23 April 2026. There were also 16,953 medium firms (100 to 499 employees) and 3,380 large ones. It's the newest edition, and ISED counts each firm once, at the enterprise level.

Statistics Canada's own count is bigger, because it counts each location. Its Canadian business counts for December 2025 show 1.37 million employer businesses and 3.67 million non employer businesses with revenue over $30,000. A chain with 40 stores is one firm to ISED and 40 locations to that count. Both are right. Just don't mix them in one sentence.

Most small firms are tiny. Those with 1 to 4 employees make up 59.1% of all of the employer businesses in Canada, and 77.3% of all employer businesses have fewer than 10. Almost half of all firms are in just four industries, which are construction, professional services, health care and other services. Construction on its own has 154,179 small firms.

More than half of small firms are in Ontario and Quebec. The table gives every province from ISED's December 2024 count.

One number in ISED's report doesn't match itself. Its text says Alberta and British Columbia have 37.7 firms per 1,000 adults, while its Table 1 shows 36.3 for each. We've used the table. Either way, they're tied for first, and Newfoundland and Labrador is last at 27.9.

What counts as a small business in Canada?

A small business in Canada is a firm with 1 to 99 paid employees, in ISED's and Statistics Canada's statistics. A medium firm has 100 to 499, and a large one has 500 or more. Together, small and medium firms (SMEs) are everything from 1 to 499. That's 1,096,141 SMEs, per ISED's December 2024 count.

Other groups draw the line in other places. Statistics Canada's business conditions survey will often split out "smaller businesses" with 1 to 19 employees. CFIB speaks for small and medium firms and has 103,000 members. The tax system ignores headcount: the small business deduction goes to a Canadian controlled private corporation on its first $500,000 of active business income, whether it has 2 staff or 200.

People who work for themselves and pay no staff are left out of most of these counts. They show up in Statistics Canada's 3.67 million non employer businesses with over $30,000 in revenue, and not in ISED's 1.08 million.

Are more businesses opening or closing in Canada in 2026?

Openings are just ahead of closures in 2026. In June 2026, Statistics Canada counted 47,556 business openings and 46,795 closures, with 938,951 active employer businesses, in its monthly estimates released on 28 September. Over the 12 months to June, we summed 554,848 openings and 553,873 closures, so openings beat closures by 975. The active count itself rose 622, from 938,329 in June 2025, because Statistics Canada seasonally adjusts each series on its own.

The count has barely moved since early 2023. There were 935,150 active employer businesses in January 2023 and 938,951 in June 2026, a rise of 0.4% in three and a half years. From January 2019 to January 2023, the count had grown 4.0%. It's now 3.8% above January 2020, before the pandemic.

Closures ran a little high this year. In February 2026 the closure rate was 5.0%, which Statistics Canada said was 0.4 points above its 2015 to 2019 average. Business insolvency filings rose 10.1% that month, from 366 to 403. That February release was the last monthly write up. The tables still come out each month, but there's no summary any more.

These monthly figures count a business as open when it files payroll for a month, so a seasonal firm can close in October and reopen in May. They cover all employer businesses, not only small ones, though 98.2% of them are small. ISED's longer view nets out the churn: from 2018 to 2022, an average of 105,001 small businesses started each year and 93,240 left.

What percentage of small businesses fail in Canada?

About 5% of new small businesses close in their first year, and about half of them are gone within 10 years. ISED's 2025 report shows 94.8% of Canadian firms with 1 to 99 employees still operating one year after they open, 68.0% after five years and 48.2% after ten. After 21 years, it's down to 24.2%, or about one in four.

Goods producers last longer than service firms. After 10 years, 52.0% of goods firms were still running, against 47.2% in services. Firms owned equally by men and women did best of all, with 85.4% still open after five years. The figure was 80.2% for majority male owned firms and 78.2% for majority female owned ones, on a separate ISED series that starts in 2005.

We couldn't find a primary source for the line, repeated on several roundup pages, that over 70% of Canadian small businesses fail because of management problems. So it's not here.

How many Canadians work for small businesses?

Small businesses employed 5.8 million people in 2024, which was 46.6% of all the people who work in Canada's private sector, per ISED. That's more than the large firms had. Those with 500 or more staff employed 4.5 million, or 36.4%, and medium firms had 2.1 million. If you add the small and the medium ones together, they hold 63.6% of the jobs.

Most of those jobs are in just four industries. Retail is the largest, with 875,706 people who work at a small store or shop. It's followed by restaurants and hotels, then by construction and by professional services. Between them, the four have 55.1% of all of the jobs at small firms.

Hiring is weak right now, and it's weakest at the smallest firms. Statistics Canada's June 2026 analysis of small businesses found that only 9.9% of firms with 1 to 19 employees expected to add staff in the next three months. For firms with 100 or more, it was 24.6%. In CFIB's September 2026 survey, 16% of owners planned layoffs and 13% planned to hire.

How are tariffs affecting small businesses in Canada?

About one in three Canadian businesses expects US tariffs to hurt it over the next year. Statistics Canada's survey from July to August 2026 put the share at 32.2%, led by manufacturing (49.7%), transportation (47.3%) and wholesale trade (45.1%). The smallest firms were the least exposed, as this breakdown from its table 33-10-1188 and table 33-10-1192 shows.

We added the "major" and "minor" negative impact answers to get the first column. Firms with 20 to 99 staff were the most likely to expect harm, at 38.7%. Statistics Canada rates a few of the larger firm estimates B (very good) rather than A (excellent), so read the gaps as approximate.

Exporters feel it most. CFIB's survey of 1,545 business owners, released on 3 September 2026, found 46% of small exporters and 49% of small importers had products hit by the new US tariffs or Canada's counter tariffs. Among those, 18% of exporters and 11% of importers said they'd stop being viable if the trade war lasted three months or more. CFIB president Dan Kelly put it this way: "We cannot allow small business owners to become cannon fodder in the trade war."

The US is the main market for small exporters. In 2024, 79.4% of the value small businesses exported went to the US, up from 77.9% in 2023, per ISED. Small firms are 65.7% of Canada's goods exporters but ship only 16.7% of export value.

Small business confidence in Canada fell below 50 in September 2026

CFIB's 12 month small business confidence index fell 9.8 points to 47.9 in September 2026. That put it below 50, the line where more owners expect things to get worse than better. Its 3 month index fell to 43.3. CFIB put it down to new tariff fears and to the rise in fuel prices. It asked 581 of its members from 10 to 16 September.

Costs are the main squeeze. Fuel was a problem for 62% of small firms, and tax and rules were a problem for 61% of them. Wages came next, at 60%. Almost half (49%) said they don't have enough demand to grow, and 41% can't find the skilled staff they need. On average, owners planned to raise their prices by 3.3%, up from 2.6% in August.

Statistics Canada's survey reads warmer, because it asks a different question. In July and August 2026, 72.6% of all businesses said they were optimistic about the next 12 months. Among firms with 1 to 4 employees it was 68.6%. At firms with 100 or more, it was 79.5%. In the Bank of Canada's Business Outlook Survey of firms of all sizes, the share planning for a recession rose from 9% to 17% in May 2026, as fuel costs from the war in the Middle East climbed.

How easy is it for small businesses to get a loan?

Most small businesses that ask for a loan get one. ISED's credit conditions report found that 89% of small business debt requests were approved in 2024, down from 91% in 2023. Only 9% asked for debt at all, and 36% asked for any kind of outside financing.

Borrowing got cheaper and stricter at once. The average rate charged to small firms fell to 7.3% in 2024 from 9.0% in 2023. But 66% had to pledge collateral, up from 46%. Start ups fared worst: 53% of debt requests from firms two years old or younger were approved, against 94% for firms over 20.

The bigger triennial survey covers 2023. Statistics Canada found that 49.3% of SMEs asked for outside financing that year, and 88.2% had their largest debt request approved in whole or in part. Those requests came to about $94.0 billion, and chartered banks supplied 68.5% of it.

What taxes do small businesses pay in Canada?

An incorporated small business pays 9% federal tax on its first $500,000 of active business income, against 15% on income above that, per the CRA's corporation tax rates page. Provinces add their own small business rate on top, and our corporate tax rates by province for 2026 table sets them side by side.

About 929,600 corporations got relief from that lower rate in 2023, per Finance Canada's 2026 report on federal tax expenditures. Finance puts its cost at $6.735 billion in forgone federal revenue for 2023, and projects $6.21 billion for 2026. That's one of the few figures that tells you how many incorporated small firms actually use the rate. Whether yours qualifies turns on the CCPC rules, and the T2 filing deadline is six months after your year end.

CFIB wants both numbers changed. In September 2026 it asked Ottawa to cut the federal small business rate from 9% to 6% and to raise the $500,000 limit to $700,000. In Statistics Canada's 2023 SME survey, 72.1% of SMEs named the corporate tax rate as an obstacle to growth.

Sales tax starts at $30,000. A business has to register for GST/HST once its taxable sales pass $30,000 over four calendar quarters, or in a single quarter. Our GST registration threshold page walks through when that kicks in.

Red tape costs more than tax forms. CFIB's 2026 Red Tape Report Card says regulation cost Canadian businesses $51.5 billion a year as of 2024, with $17.9 billion of that being red tape. Owners lost 32 working days to it on average. The smallest firms pay up to five times more per employee than large ones.

If you'd like a figure like the $500,000 limit checked against the CRA, Whizi's Canadian CPA agent answers tax questions and cites the official page it used.

Who owns Canada's small businesses?

Women own 18.2% of Canada's private sector businesses, and immigrants own 21.8% of them, per Statistics Canada's business conditions survey for the third quarter of 2026. Each of those shares counts the firms where that group has a majority. People who are 65 or older own 18.1%, which is 184,011 firms. A visible minority owns 15.1%, and First Nations, Métis or Inuit people own 3.2%.

A lot of those older owners will sell soon. In the same survey, 20.3% of businesses said they plan to sell or transfer ownership within 10 years, and 31.3% of that group plan to do it within two. BDC said in October 2025 that more than 142,000 businesses are expected to change hands by 2030. Among firms with 1 to 4 employees, 3.3% plan to close in the next 12 months, against 2.1% of all firms.

AI is moving in fast. 25.2% of businesses planned to use AI in the next 12 months as of the third quarter of 2026, up from 14.5% a year earlier, per Statistics Canada. Our AI adoption statistics for Canada tracks how many firms already use it. What those tools cost each month is tracked on our AI subscription statistics page. That was also the last edition of the business conditions survey: Statistics Canada says it won't run again.

How we compiled these numbers

Whizi Research opened every figure at its primary source on 15 October 2026. Those sources are ISED's Key Small Business Statistics 2025 and its 2024 credit conditions report, Statistics Canada's tables and releases, Finance Canada's 2026 tax expenditures report, the CRA, CFIB, BDC and the Bank of Canada. We pulled Statistics Canada's tables through its free web data service. The 12 month openings, the 975 gap between openings and closures, the 0.4% change since 2023 and the tariff impact totals by size are our own sums on that data.

We left out what we couldn't trace. That includes a claim that small firms employ over 10 million Canadians and the line that 70% fail because of management issues, both seen only on roundup pages. Where ISED's text and its own table disagree, we show both. Survey figures from CFIB and BDC come from member or panel samples, not random samples of all firms, and we say so where we use them.

Can I quote these small business statistics?

Yes. Every figure here is free to use with a link back to this page, and a plain credit line works:

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Source: Whizi Research, "Small business statistics Canada 2026: 1.08 million small firms, and openings beat closures by 975 in a year", whizi.io/resources/small-business-statistics-canada, updated October 2026.

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We'll update the openings and closures rows as Statistics Canada adds months.