Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, said: “Surprisingly, high consumer demand has continued and core inflation remained high despite easing headline inflation. This led the Bank of Canada to raise its overnight rate to a 22-year high of 4.75% after holding it steady since the beginning of the year. In addition, a recent survey conducted by the Canadian Chamber of Commerce confirms that small businesses continue to express concerns over high wages and rising costs. Moreover, the Canadian unemployment rate has experienced a notable increase, marking the first rise in nine months.
“These developments align with the findings from the Intuit QuickBooks Small Business Index, which captures an overall monthly decline of small business employment of 0.35%. Signs of negative small business growth are evident nationwide, spanning across various sectors and indicating increasingly restrictive conditions.
“Despite the progress that has been made in Canada to decrease the overall inflation rate from 8.1% in June 2022 to 4.4% in May 2023, a closer look at the consumption basket reveals that some industries continue to experience elevated inflation. Among them, for the period of May 2022 to May 2023, the food services industry experienced the highest yearly inflation rate of 8.3% and the accommodation industry ranked third, with an inflation rate of 4.7%. Concurrently, according to the Intuit QuickBooks Small Business Index, the accommodation and food services sector witnessed a notable decline in small business employment, of 0.61%. This implies that this small business sector has experienced dual pressures of high inflation and declines in employment, and further underscores the need for attention and support to mitigate the challenges they face.
“The utilities sector stands out as the sole industry showing job growth among small businesses with 19 or fewer workers. In contrast to others, this sector has demonstrated a mild increase of 0.02% growth in new employment opportunities.
“The Intuit QuickBooks Small Business Index also showed a decline in small business employment across all regions in Canada. Québec experienced the most significant decline in employment, with a contraction of -0.66%. This observation aligns with the slight increase in Québec's unemployment rate, which rose to 4%. Conversely, Ontario exhibited the mildest decline in employment, with a decrease of -0.17%.
“The various indicators discussed collectively highlight the challenges encountered by the labour market for small businesses in Canada. In this context, the Intuit QuickBooks Small Business Index is an invaluable tool for monitoring these challenges and developing potential strategies to address the employment situation across the country. By leveraging this Index, policymakers, economists, and other stakeholders can gain insights into the dynamics of the small business labour market and work towards fostering a more favourable environment for growth and employment opportunities.”
Get all the details from the interactive Small Business Index dashboard.
More information
Media inquiries
Media contact details for QuickBooks in Canada can be found here on the Intuit website.
USA Index
The Intuit QuickBooks Small Business Index is also published monthly in the US. Get the latest small business employment insights for the US here.
UK Index
The Intuit QuickBooks Small Business Index is also published monthly in the UK, a few days after the US and Canada. Get the latest small business hiring insights for the UK on July 10.