The Hidden Forces Crushing Small Businesses Across Canada
It's not the cost of labour - it's literally everything else.
Why small businesses across Canada are closing—and what we can actually fix
Across Canada, brick-and-mortar businesses are being pushed into impossible decisions just to stay afloat.
We’re not talking about a dip in revenue or a tough season. We’re talking about a fixed-cost crisis—the kind that wipes out thirty-year institutions overnight.
Rent is up. Insurance is up. Utilities are up. And Trump’s tariff threats are always on the horizon. But instead of focusing on these pressures, we keep hearing the same refrain: labour is too expensive.
What’s Actually Driving Closures?
Here are the real forces pushing small businesses to the brink:
Skyrocketing Commercial Rent
Retail rent is up over 100% in cities like Toronto, Vancouver, and parts of Calgary. These aren’t gradual increases—they’re sudden, often brutal hikes that make previously viable businesses unsustainable overnight.
Insurance Premium Explosion
Business insurance costs are doubling or tripling across multiple sectors. Why? Industry consolidation has left small businesses with fewer providers and no leverage.
Supply Chain Pressures
From bakeries to bookstores, businesses are carrying more inventory at higher cost—just to avoid stockouts. Big players absorb those fluctuations. Small businesses? They eat them.
Tariff Absorption
Trump’s trade chaos has never gone away. Canadian businesses are still absorbing the impact—while large multinationals pass those costs off or spread them across supply chains. For small business, it’s a direct hit.
The Golden Wheat Story
In April 2025, Toronto’s Golden Wheat Bakery closed after more than 30 years of serving its community.
Not because of labour costs or market trends.
Their rent jumped overnight under a new landlord with bigger expectations.
This story isn’t rare - it’s a pattern. Commercial properties are changing hands, and new ownership often means less connection to the local business community and more focus on extraction.
Circulation vs. Extraction
When wages rise, money stays local. It goes to groceries, childcare, home repairs, and local services. It circulates. Good jobs create strong teams. They reduce turnover. They boost service quality. They create stability for workers AND the businesses that employ them.
But rent? Insurance?
That money is extracted. It vanishes into portfolios, real estate trusts, and quarterly shareholder calls. Eventually there won’t be any additional wealth to extract but for now we’re seeing the chainification of main streets across Canada in real time.
A Better Way Forward
That’s why the
launched Advantage Canada - a roadmap from the Better Way Alliance focused on real economic resilience.Our network of business owners is already proving what works. They're creating stability by investing in their teams and building for the long haul. We’re advocating for policies that actually reflect today’s business landscape:
Modernized commercial leasing rules
Affordable, transparent insurance options
Support for business ownership and wage investment
If workers don’t have money to spend, they can’t support local businesses. And when local businesses can’t afford to operate, they get replaced by chains - or disappear altogether.
We need to stop forcing impossible choices on the workers and local businesses holding our economy together - and start building a system that works for them.
👉 To learn more about Advantage Canada or access resources for strengthening your business while creating good jobs, visit betterwayalliance.ca
