Self-Employment Rebound Could Add $24B to Canada's GDP
A rebound in self-employment could boost Canada's GDP by $24 billion, according to a new study from the Business Development Bank of Canada (BDC). The report highlights the economic resilience and growth potential driven by small businesses and entrepreneurs.
- The rebound in self-employment saw approximately 70,000 Canadians become their own boss in 2024, bringing the total to two million. - This growth is significant as it follows a pandemic-era decline; in February 2020, there were nearly 2.9 million self-employed Canadians, a number that dropped to just over 2.6 million by late 2021. - The BDC's projection is based on the potential for existing self-employed individuals to hire their first employee, a transition that could create up to 213,000 new small businesses annually. - A key challenge for this group is access to funding, with 73% of self-employed Canadians using personal funds to finance their businesses, compared to 55% of micro-businesses. - Demographically, entry rates into self-employment are higher for women, young people (aged 15-34), and recent immigrants. - Despite the recent rebound, the long-term trend has shown a decline in the self-employment rate, which fell from a high of 17.2% in 1998 to 13.2% in 2023. - Top industries for self-employment include residential construction, computer systems design, and personal care services. - Beyond economic contributions, many self-employed individuals report challenges such as income irregularity, stress, and burnout, with over a third expressing concern about inadequate healthcare coverage.
