Decades-long slowdown in self-employment rate has intensified amid soaring inflation, strong labour markets and uncertainty caused by the COVID-19 pandemic, the latest RBC report shows. A woman walks past a Royal Bank of Canada sign in the financial district in Toronto on Tuesday, Sept. 20, 2022. THE CANADIAN PRESS/Alex Lupul
TORONTO – Younger Canadians don’t want to be their own bosses, intensifying the slowdown in entrepreneurship in Canada, according to a new RBC report.
The decline in the self-employment rate is also being amplified by soaring inflation, strong labour markets and uncertainty caused by the COVID-19 pandemic, the report says.
While self-employment rates for younger Canadians aged 35 to 44 have always tended to be lower compared with older cohorts, the report says the share of younger people seeking to “be their own boss” has fallen to two per cent, from 3.3 per cent in 1998.
Cynthia Leach, assistant chief economist at RBC, suggests strong labour markets and higher hourly wages for employees are likely contributing factors to the slowdown in self-employment.
The report shows a professional, scientific or technical services employee earns 20 per cent more than self-employed individuals while also enjoying flexible hours, which used to be a perk limited to those who are self-employed.
Leach says she doesn’t see the trend in declining entrepreneurship reversing despite the expected softening in the job market next year as the higher cost of living and continued wage increases make paid employment the more enticing option.
This report by The Canadian Press was first published Oct. 5, 2023.
