On the surface, Canada’s labour market has made a complete comeback since losing nearly three million jobs at the start of the pandemic, but dig a little deeper, and you’ll see that the recovery hasn’t been for everyone, including self-employed Canadians.
Self-employment in Canada had been growing steadily for several years, but over the course of the pandemic, it fell to its lowest level in more than a decade. There were nearly 2.9 million self-employed Canadians in February 2020. Now, there are just over 2.6 million.
Some of the losses in self-employment have been made up by gains in paid employment in the same industries, according to Statistics Canada. Those include professional, scientific and technical services.
But in other industries, such as agriculture, construction and services, including personal care, declines in self-employment haven’t been offset.
Richard Dias, founder and head of research at Acorn Macro Consulting in Halifax, blames the drop on government pandemic policies that weren’t tailored to support the success of Canada’s self-employed. These policies include blanket business closures and capacity restrictions, complicated applications for financial support and PPE requirements.
“It favoured giant corporates, who obviously are structured much, much better to navigate difficult situations … versus the humble shopkeeper,” said Dias.
Statistics Canada breaks self-employment into several categories, including people who own an incorporated or unincorporated business, farm or professional practice, or those without a business, such as newspaper carriers or babysitters. Most self-employed Canadians are a business-of-one, but about one-third employ other people.
Dias is also worried about those self-employed Canadians who stretched themselves financially to survive the pandemic.
“After doing all the right things, they burned through their savings,” he said. “There’s no recognition, frankly, of that profound systemic error and the prolonged impacts that it’s going to have on our economy.”
Business on the brink
Michelle Palmer has been self-employed for eight years, but the owner of Pause Beauty Boutique in Toronto said the pandemic has made her question it.
WATCH | Spa owner on making up for lost time — and money:
Business owner questions her future
14 days ago
Duration 1:09
Owner of Pause Beauty Boutique, Michelle Palmer, holds onto hope that she can turn around her business. 1:09
“I’ve encountered the idea and the thought of closure so many times in the last two years, I can’t even count,” said Palmer.
She was forced to close her spa business for 10 months out of the past two years because of public health lockdowns. Despite applying for all the financial help she could, she reopened her doors deep in debt.
“Our debt load is in the six figures right now, and that’s not going to go away overnight.”
Falling through the cracks
Some self-employed Canadians fell through the cracks of government support programs, according to Dan Kelly, the president of the Canadian Federation of Independent Business.
“I’ve talked to thousands of self-employed people who really got almost no support through the COVID emergency,” said Kelly.
WATCH | These are still ‘perilous times’ for entrepreneurs, says CFIB president:
The economic cost of shrinking self-employment
14 days ago
Duration 0:30
CFIB president Dan Kelly on the need to encourage entrepreneurship post-COVID. 0:30
He says many of them didn’t qualify for programs that their large or medium-sized counterparts did. For example, the Canada Emergency Business Account provided interest-free loans of $40,000, but initially, applicants had to show they had an annual payroll of at least $50,000 in 2019 to access it.
Self-employed workers were eligible to apply for the Canada emergency response benefit (CERB) and its replacement, the Canada recovery benefit (CRB), but Kelly argues the income support was not enough to keep a business going.
Palmer says she was cut off from the personal support programs this year because her 2020 taxes showed she didn’t make the required $5,000 to be eligible for CERB or CRB. That’s because she is a sole proprietor, which means that her business and personal taxes are filed together, and because of the closures, Palmer’s business operated at a loss.
“The message that we’ve sent to entrepreneurs over the last two years has been a pretty negative one,” said Kelly.
The CFIB expects a wave of business closures in 2022 as the federal pandemic support programs wind down.
“I think many business owners will not see a pathway back to profitability,” said Kelly.
Potential new cohort of entrepreneurs
But a new wave of self-employment could be on the horizon. According to a recent survey, 30 per cent of “traditionally employed” Canadians expect to transition to self-employment in the next two years.
The online survey of 3,000 people who work full-time was conducted in August and September of 2021 by data company Dynata for cloud accounting firm Freshbooks. The survey results were balanced against Statistics Canada data on age, gender and industry.
Such a shift to self-employment would be welcome news to the CFIB’s Kelly, who wants to see the group of self-employed Canadians grow — not shrink.
“They are the group that we’re counting on to replace many of the businesses that are now boarded up,” he said. “We’re also counting on them to create jobs for other Canadians.”
Seeking out job security
In the professional, science and technical fields, the trend may be headed in the opposite direction: toward salaried positions, which increased by close to 22 per cent between November 2019 and November 2021. Statistics Canada suggests the rise is a sign a pandemic-related shift to more standard forms of employment may be underway.
Many of those newly hired employees likely want the stability of a salaried position, according to Scotiabank deputy chief economist Brett House.
“It’s not a sign that Canadians are becoming less entrepreneurial. It is a sign that the labour market recovery is continuing and getting firmer,” said House.
Shannon Mulligan, with her two young children, has traded freelancing for a full-time role with a growing tech company. (Tina Mackenzie/CBC)
Copywriter Shannon Mulligan is among that crowd. While freelancing was a lifeline during the pandemic, a position with a tech start-up in Toronto recently won her over.
“Moving from freelance to full-time was not something I was really ready to do, but… it was just an overwhelmingly exciting opportunity,” said Mulligan.
Her new job comes with the flexibility of working from home, something that was more common for freelancers than paid employees pre-pandemic.
“Being able to have that still helped seal the deal for me,” said Mulligan.
Sticking with self-employment
But others aren’t ready to give up their self-employment status just yet.
Despite having thoughts of walking away from Pause Beauty Boutique, Palmer says she hasn’t followed through with it yet because she still loves it despite the stress and the financial cost.
“[Working for myself] is the most empowering thing I’ve ever done … and I am not willing to give that up lightly.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
