Alberta lost 3,500 businesses in the last 3 years

The month the UCP government implemented the Job Creation Tax Cut, Alberta had fewer active businesses. Today, that number is even lower.

Last week, Statistics Canada released December 2021 data on business openings and closings in Canada, and I thought I’d explore the data.

In December 2021, there were 897,632 active businesses in Canada that reported having at least one employee that month. A year before, in December 2020, there were only 868,422. During that year, the number of active businesses in Canada grew by 29,210, or 3.36%.

Only one province, Newfoundland and Labrador, saw its number of active businesses shrink. They lost 96 business, dropping 0.77% from 12,508 to 12,508.

The province with the largest increase was Ontario, where they saw a 4.09% increase. They went from 333,936 active businesses to 347,590, an jump of 13,654./

Here are all the provinces in order of largest increase to the largest decrease:

20202021Change% change

And here it is in chart form, but in geographical order.

I found it interesting that of the 9 provinces that saw a net increase in the number of their active businesses in 2021, Alberta had the smallest increase.

And that made me wonder how Alberta has done over the last 3 years, you know, with the UCP implementing their so-called Job Creation Tax Cut. The party claimed that slashing taxes on corporate profits above half a million dollars—from 12% to 8%—would spur in an influx of new businesses.

So, I compared the number of active businesses in December 2021 with those in December 2018, the last December before the 2019 provincial election.

During that time, the number of active businesses dropped in Alberta. Plunging by nearly 3,500, from 119,795 in 2018 to 116,351 in 2021. That’s a 2.87% decline.

Now, of course, the pandemic had something to do with it. And since every province had the pandemic, too, they must have also seen a decrease over the last 3 years. Well, take a look.

20182021Change% change

The total number of active businesses lost was actually highest in Alberta. And even if you look at the percent change, Alberta still saw the second highest decrease, at nearly -3%.

6 of the 10 provinces saw an increase in the number of active businesses, with British Columbia, Québec, and Prince Edward Island having percentage-based growth similar to Alberta’s but in the opposite direction.

Here’s a look at Alberta’s monthly totals of active businesses over the last 3 years.

Sure enough, the pandemic had a big impact on the number of active businesses in the province. But there’s something else interesting in the graph.

In July 2019, the month the Job Creation Tax Cut took effect, Alberta lost 65 active businesses, compared to the month before. Not only that, but in every month but one between that time and the pandemic, the number of active businesses continued to decline.

Alberta went from 120,092 active businesses in June 2019 to 118,352 active businesses in February 2020, the last month before public health restrictions took effect. That’s a loss of 1,740 active businesses, or 1.47%. That works out to be an average loss of 217.5 active business per month.

That’s despite cutting the tax on corporate profits above $500,000. And again, that’s without the economic impact brought on by the pandemic.

Another thing that the graph shows is that while the number of active businesses rebounded after May 2020, that growth plateaued after January 2021, rising only 557 over the next 5 months, and then seeing a sudden jump of 472 in July, reaching a peak of 117,428.

Since last July, the number of active businesses continued that pre-pandemic decline, seeing a drop of 1,077 between July and December, and ending the year lower than it started.

Alberta went from 116,399 in January last year to 116,351 in December. Nearly all the growth seen in the first half of the year was completely wiped out.

And that drop during the last half of 2021 was not a national trend.

Here’s a look at the change in active businesses for all the provinces between July 2021 and December 2021.

Jul 2021Dec 2021Change% change

And here is the same information in chart form. First, the total change in active businesses.

Then the % change in active businesses.

Alberta was one of only two provinces that saw a decrease in active businesses during the last half of 2021. Not only did we see the largest decrease in absolute numbers, but it was the largest relative decrease, too, nearly 1%.

I’m starting to wonder whether the corporate tax cut will attract businesses at all.

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By Kim Siever

Kim Siever is an independent queer journalist based in Lethbridge, Alberta. He writes daily news articles, focusing on politics and labour.

5 replies on “Alberta lost 3,500 businesses in the last 3 years”

Hey Kim. You do such a good job on this, any chance you can look at the numbers from 2010 on? So that the drastic drop in oil price is accounted for as well as the 4 years the NDP were in power?

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