By almost every measure the labour market has fully recovered, but one corner of the job picture keeps getting worse: self-employment, a critical indicator of Canada’s entrepreneurial vigour.
While the economy has added 206,000 new jobs this year, mostly in the private sector, the number of self-employed workers has flatlined since 2021, and is down roughly 7 per cent since the pandemic began.
As a result the self-employed now account for the smallest share of all workers in more than 40 years.
There is no clear explanation for why self-employment is stuck in the doldrums. One possibility is that some self-employed workers have opted for the stability of a regular paycheque in a world where hybrid work allows them the flexibility they once sought by working for themselves.
Yet relative to the same period in 2019, self-employment in March was down in almost all industries, regardless of whether the self-employed were incorporated or not, or had their own employees or not. Last year Statistics Canada said the breadth of weakness signals “a structural change in the feasibility or desirability of self-employment.”
If so, the dearth of self-starters could have worrying implications for the economy, since self-employment is widely seen as an indicator of entrepreneurial activity, the formation of new businesses and growth. As it is, the number of active businesses in Canada has been in decline since last July, with the number of businesses shutting their doors outpacing business openings month after month.
Jason Kirby