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.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
