A number of government initiatives launched this year could be helping small businesses not only survive, but thrive.
Julie King is the publisher and managing editor of canadaone.com, an Ontario-based website that focuses on growing and starting Canadian businesses. She says that as unemployment rates in Canada were rising, so too were the number of people starting their own businesses.
“There’s definitely been an upswing,” she said.
Katherine Roos, small business manager for the City of Toronto, agrees.
“Absolutely we see the relationship between the recession, unemployment and business creation,” she said. “When there’s an economic downturn, there are more people starting businesses to make employment opportunities for themselves.”
According to Industry Canada, there were 2.6 million self-employed workers in Canada last year, representing around 15 per cent of all employed workers in the country. The number reached a high of 2.66 million in the fourth quarter of 2008 and decreased slightly to 2.63 million in the first quarter of 2009.
A report by BMO Capital Market Economics released this month states that self-employment “has risen sharply during the financial crisis and ensuing recession, but it also reflects the growing number of retirees who shift to self-employment.”
King says a number of new government initiatives launched this year can help small businesses through the recession. One is the federal Business Credit Availability Program, which is expected to make available $5 billion in loans and credit support to Canadian businesses.
Another is the Work-Sharing program, which helps employers avoid laying off employees during periods of slow business activity by supplementing reduced wages with employment insurance benefits.
The Canada Small Business Financing Program, which encourages financial institutions to make their financing available to small businesses, also upped its limit to $500,000 from $250,000 in April.
“There’s actually no bad time, ever, to start a business,” said Roos, noting that Disney and Hewlett Packard both started during recessions.