Recent reports from the Canadian Federation of Independent Business (CFIB) highlight severe challenges for small businesses in Canada. The first report, titled Canada's Entrepreneurial Drought, warns that the country is experiencing a significant decline in business start-ups, threatening innovation and economic dynamism.
Entrepreneurial Drought: Key Findings
According to CFIB analyst Joseph Falzata, the report serves as a wake-up call for all levels of government. Business entry rates have fallen nearly 50% since the mid-1980s and remain at historic lows. The current drought began in 2024 and shows little sign of improvement. In the second quarter of 2025, exit rates were 5.6%, while entry rates dropped to 4.9% in the fourth quarter of 2025, marking some of the highest closure rates and weakest start-up activity outside the pandemic.
The report states: This prolonged imbalance between business exits and new entries places us in an entrepreneurial drought — a trend that threatens Canadian innovation, competitiveness and business dynamism.
Falzata emphasized that since 98% of all businesses are small, maintaining a supportive environment for growth is crucial. The CFIB calls for lower taxes, reduced red tape, and removal of barriers to entrepreneurship to encourage business start-ups.
Crime as a Daily Pressure
A second CFIB report from April 8 highlights crime as a persistent issue for small businesses. Analyst Kayode Southwood noted that owners spend excessive time and money managing theft, vandalism, and safety risks, detracting from running their businesses. Many have spent thousands on security cameras or replacing smashed windows. Nearly half of small business owners express concerns about their own safety and that of staff and customers.
Southwood urged governments to respond with stronger consequences for repeat and organized offenders, streamlined reporting, faster police responses, and supports for prevention and recovery.
Canada's Changing Landscape
Canada was once fertile ground for entrepreneurs with dreams and a willingness to work hard and take risks. However, the current environment has made people timid about investment and fearful for their safety when showing business initiative. The CFIB reports underscore the urgent need for policy changes to reverse these trends.
