A new report has found that Canadian small business job growth has been “lagging” since last summer, particularly within manufacturing and professional services, signalling possible trouble ahead as president-elect Donald Trump’s threat of U.S. tariffs looms.
The report by Intuit QuickBooks found that Canadian small businesses have lost more than 84,000 jobs since July, despite adding a cumulative 126,600 jobs between October 2023 and October 2024.
The year-over-year increase in small business jobs is in stark contrast to the second half losses in 2024 and reflects a tale of two trends, said Simon Worsfold, head of data communications at Intuit QuickBooks.
“We saw really strong growth in the first half of the year,” Worsfold said, “and then quite a steep decline in the second half.”
Ontario fared best among the country’s regions, adding more than 126,000 new small business jobs year over year and boasting the fastest annual growth rate, while Quebec small business lost 27,100 jobs, the worst in the country.
Elsewhere, the Prairie region added 22,100 small business jobs between October 2023 and October 2024, while British Columbia added 19,400, Intuit’s data showed.
The report also noted that small business growth has been hindered by high interest rates, making it “harder for some to access financing to fuel growth.”
“I know interest rates have been coming down, but we’re not yet seeing that kind of pressure taken off of small businesses yet,” Worsfold said. “I think if we see interest rates continue to fall through 2025, that should certainly lead to higher employment growth.”
Trump’s threat of a 25 per cent across-the-board tariff on Canadian products has also caused small businesses to be more conservative on hiring in an already inflationary environment, Worsfold added.
“These are uncertainties that small businesses feel acutely,” he said. “And add that to the mix of an environment where it’s more expensive to get access to financing, it’s a natural reaction to pull back on hiring.”
Trump takes office Monday, and experts have warned that a trade war could rapidly raise prices for consumers at a time when the Canadian dollar is faltering in the wake of political and economic uncertainty.
“Prices are still where they are, and we hear through surveys that costs remain a concern, and tariffs could potentially only add to that,” Worsfold said. “I certainly hope for the upswing in employment. Small businesses are such an important source of jobs. In particular, the smallest businesses in Canada’s economy, they create new jobs at a much faster rate than bigger businesses.”
Last week, data released by the recruitment company Robert Walters showed that 74 per cent of Canadian professionals will be looking for a new job in 2025, with salary concerns remaining front-of-mind for employees in the legal, financial and technological sectors.
Though many are seeking new opportunities, only about a third feel “assured” about their prospects.
