Canada Business Population Stalls in Trend Poloz FollowsGreg Quinn
Canada’s roster of companies was little changed in the first quarter, adding to evidence businesses are deferring the investment the country’s economy needs to fully recover.
The number of “employer enterprises” was little changed at about 1.09 million in the first quarter from the prior three months, Statistics Canada said today from Ottawa. The total was 1.04 million at the start of 2008. Business employment was also little changed at about 14.1 million.
Bank of Canada Governor Stephen Poloz said today that some employers have deferred adding staff until they use up existing capacity. Poloz, former head of Canada’s export finance agency, has cited the population of companies as something he’s tracking since moving to the central bank in June 2013, and mentioned this type of data in a speech today.
“Many firms were wiped out in the crisis,” Poloz said in Drummondville, Quebec. “Normally, as the economy gets back to full capacity, the overall population of businesses picks up,” he said. “Unfortunately, company population growth has been very sluggish since 2008, and preliminary data indicate this population did not increase at all in 2013.”
Most of Poloz’s speech focused on why the central bank won’t seek to weaken the dollar to boost exports. Such actions often don’t work in the long term because financial markets can resist the move, Poloz said.
Canada’s economy is poised for a slow recovery over the next few years that will boost the number of companies, he said. “The ingredients are in place,” Poloz said. “We remain hopeful that this process will resume in 2014-15.”
Statistics Canada said the figures it released today are “experimental” and subject to revision.
The agency’s flagship labor market report, last published on Sept. 5, suggested weak business creation may continue. Employment fell by 11,000 in August, including a record 111,800 decline in private-sector jobs.