The Canadian Federation of Independent Businesses (CIFB) is sounding the alarm on what they call an entrepreneurial drought occurring in Canada, impacting businesses.
Brianna Solberg, Provincial Director for Manitoba, Saskatchewan and the North, talks about the statistics they’ve gathered that point to the issue.
“CFIB is using the term entrepreneurial drought to describe what is essentially a sustained period where more businesses are closing than opening and that’s exactly what we’re seeing across Canada right now. We’ve seen six consecutive quarters where business exits outpace business entries.”
“It’s a trend that started in early 2024 and has continued quarter after quarter. Normally, even during economic slowdowns, you still see more business open than close, but that’s flipped and this is not just a dip, it’s a shrinking of the business landscape.”
Impacts in the province
Solberg says that Saskatchewan’s not immune from the impact, reporting similar problems from the statistics.
“In Saskatchewan, we’ve now had four consecutive quarters of business exits outpacing business entries and that’s a warning sign that we can’t ignore. In the most recent quarter, which we have data for, which is Q2 2025, the net business openings were down 42 businesses. That’s the net. The quarter before that was even more alarming. We saw net negative 172.”
“It’s also at the same time that confidence is flipping. In Saskatchewan, we have 53% of businesses saying they wouldn’t recommend someone start a business today. So when someone who’s actually started and grown a business is saying they wouldn’t recommend someone else do so, that should be treated as a warning sign.”
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Environmental causes
CFIB is carefully studying what they believe the cause of the drought to be, with impacts coming from current uncertainty.
“As you can imagine, the environment that businesses are operating in, there’s a lot of uncertainty, but also businesses are dealing with high costs, rising taxes, higher payroll contributions, red tape, labour shortages, you name it, all at once. It’s just simply a lot of uncertainty that becomes a tough environment to take on risk.”
A lack of support is also having an impact, as 41 per cent of small businesses have said they feel unsupported by the province.
Solberg states that greater confidence is key so that those small businesses can agree with the province’s plans.
“They really just want to see confidence in a plan and for the provincial government to display that they have a plan to support entrepreneurs, small entrepreneurs. I think this year’s budget really did focus a lot on big business and attracting large investments from big capital projects. But small businesses really feel like they’ve been left on the sidelines to figure out all of this uncertainty on their own. When their confidence drops, it affects jobs, it affects investment and community growth.”
Effects of fewer small businesses
The CFIB calls the situation dire with Solberg explaining some of the more impactful effects.
“If this trend continues, we’re looking at a gradual weakening of the economy. Fewer businesses means less competition, less innovation and fewer jobs. That’s important to consider here as well. Small to medium-sized businesses make up around 99 per cent of businesses in Saskatchewan, and they employ over 60 per cent of all private sector workers.”
“So if they cease to exist, where are people going to work and where are people going to get the goods and services that they need? We risk losing the backbone of our economy.”
The CFIB is currently working on a second part of their study, focused on solutions and how the entrepreneurial drought can be fixed.