Corporations Canada Issues First Report Analyzing Incorporation Trends in Canada
For the first time, Corporations Canada has issued a public report providing statistical analysis on federally incorporated businesses in Canada. Although statistics in and of itself are not a riveting read, the report gleans some interesting insights. The report looks at the number of active corporations, newly incorporated businesses and how many companies have dissolved – all within the last calendar year. The report also looks at general profiles of Canada’s federal corporations, including their age, location and industry. The report does not address provincially incorporated businesses.
Who is Corporations Canada?
Corporations Canada is the federal government agency that is responsible for governing Canada’s corporate entities on a federal level. Its mandate is to “provide a regulatory climate that maintains order and fairness…[that] ensure greater certainty in the marketplace and creates a business environment that is supportive of innovation and economic growth”.
What are the Key Findings of the Report?
Overall, the number of federal incorporations has grown steadily over the past decade, with a noticeable increase in the more recent years. Notwithstanding that the number of federal corporations declined during the first lockdown related to Covid in Spring 2020, the number of federal incorporations rose significantly. The number of federal incorporations in 2020 was 15% higher than in 2019, which Corporations Canada attributes to new market opportunities created by the pandemic. This sharp increase is commonly referred to as the “recession-push” effect, whereby those impacted by economic recessions view self-employment as a viable alternative.
Corporations Canada states that the top rationale for entrepreneurs to incorporate was to gain business credibility and to gain access to government funding.
Constituting 61% of the active corporations, Ontario was identified as the most commonly used home province of the federal incorporations. Ontario also counted for 75% of the newly incorporated corporations.
The following represent the top industries represented by newly incorporated federal incorporations in Canada:
Education and health sectors
Wholesale and retail
Business, scientific and professional services
Interestingly, 60% of active federal incorporations are less than 10 years old, with the average age being 8 years old.
If you would like to read the report, click here.
As we know, Covid lockdowns has presented a seismic shift in the marketplace. Entrepreneurship has become a viable option as workers re-evaluate their worklife, with those based in Ontario leading the charge.
If you’re ready to embark on your entrepreneurial journey, Froese Law is here to help you. If you would like to book a phone call to discuss this matter further, feel free to schedule a call using this link.