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This winter’s COVID-19 lockdowns will likely force even more companies out of business, given the Bank of Canada’s prediction that the restrictions will cause a second economic contraction in the first quarter.
Still, Shopify’s evangelism might be closer to the mark of what’s happening on the ground than what is implied by some of the grimmer headline data. Animal spirits are stirring.
More businesses opened than closed in October for the fourth consecutive month, so the rebuild of Canada’s economic capacity was well underway. “We are going to have more startups,” said Pierre Cléroux, chief economist at the Business Development Bank of Canada, the Crown lender that specializes in small-business lending and startup capital.
Animal spirits are stirring
A similar set of data from Canada Revenue Agency (CRA) supports that view.
If you want to legally conduct business in Canada, you need business and GST/HST numbers. Upon request, CRA provided a tally of the new GST numbers that it issued monthly between the start of 2007 and the end of 2020. The numbers sketch the contours of creative destruction, the idea that big shocks destroy legacy companies, creating space for newer, nimbler businesses to thrive.
CRA’s data suggest that Canada’s entrepreneurial spirit was initially crushed by the pandemic, along with employment and so many other things. But in September, the agency issued 27,450 GST numbers, a five per cent increase from a year earlier and the most in any September in at least 13 years.
