Monthly Business Openings and Closures (MBOC)

Detailed information for January 2024

Data release - April 29, 2024

• Description
• Data sources and methodology
• Data accuracy

Description

Every new month of data leads to a revision of the previously released data due to such factors as the seasonal adjustment process and a new version of the Generic Survey Universe File (or vintage of the Business Register). As such, the estimates may vary compared with a previous release.

The published data can be useful to governments, chambers of commerce, business associations and academic researchers across Canada. The underlying microdata files are not available to the public because the individual observations are confidential under the Statistics Act. However, they can be made available to researchers through Statistics Canada Secure Access Points (such as research data centres) following the approved standard procedures for access. The data can be used for research on business survival, employment growth, creation and destruction by firm size, province and territory in Canada.

Reference period: Monthly

Collection period: Not applicable. Administrative data

Subjects

• Business adaptation and adjustment
• Business performance and ownership
• Entry, exit, mergers and growth
• Industries
• Labour

Data sources and methodology

Target population

The program's target population is composed of all businesses in Canada that have at least one employee and, thus issued at least one payroll deduction remittance during the reference month. Excluded are businesses that are primarily involved in agriculture, fishing and trapping, private household services, religious organizations and public administration.

Instrument design

Not applicable

Sampling

Not applicable

Data sources

Data are extracted from administrative files.

Data are collected directly from survey respondents.

Error detection

The validation exercise includes identification of outliers, formatting errors and unexpected values. Since there is no comparable data a this point, it is not possible to confront the results with alternative sources. However, changes in other measures such as employment and business insolvencies can be used to manage expectations in business dynamics. Data abnormalities are resolved in collaboration with data providers.

Imputation

Not applicable

Estimation

Businesses can change geography and industry over time. To reduce the volatility in the estimates due to changes in industry or geographical indicators and to focus on genuine openings and closures associated with changes in economic activity, the industry and geographical classification of a business is held constant for a period of time.

Openings are defined as businesses with employment in the current month and no employment in the previous month, while closures are defined as businesses that had employment in the previous month, but no employment in the current month. Continuing businesses are those that have employees in both months, and the active population in any given month is the number of opening and continuing businesses in that month. Reopening businesses are defined as opening businesses that were also active in a previous month (that is, they closed in a given month and had positive employment in a subsequent month). In contrast, entrants are opening businesses that were not active in a previous month.

The definition of exits is based on the Longitudinal Employment Analysis Program (LEAP) annual exits. Because the LEAP definition can require up to 24 months of data to be counted as an exit, projections of exits using predicted growth rates are implemented using a regression model of exits on closures of more than six months. As a result, there are no published exits in the last six months. A temporary business closure is the difference between closures and exits. For more information on temporary business closures and exits, see "Defining and measuring business exits using monthly data series on business openings and closures."

Additional information on openings and closures:
https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2020014-eng.htm

Additional information on exits:
https://www150.statcan.gc.ca/n1/pub/11-633-x/11-633-x2022001-eng.htm

Quality evaluation

The validation exercise includes identification of outliers, formatting errors and unexpected values. Since there is no comparable data at this point, it is not possible to confront the results with alternative sources. However, changes in other measures such as employment and business insolvencies can be used to manage expectations in business dynamics. Data abnormalities are resolved in collaboration with data providers.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects that could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Every new month of data leads to a revision of the previously released data due to such factors as the seasonal adjustment process and a new version of the Generic Survey Universe File (or vintage of the Business Register). As such, the estimates may vary compared with a previous release.

Occasionally, historical revisions are done to introduce changes related to concepts, new data sources, revised industrial or geographical classifications, as well as methodology.

Data accuracy

Data accuracy can be impacted by different types of errors: sampling errors and non-sampling errors. In the context of the MBOC, the quality of the estimates is essentially defined by the non-sampling errors since the MBOC is a census of all business employers in Canada based on administrative files.

A portion of firms making PD7 remittances do so quarterly rather than monthly. For these firms, the values in the PD7 remittances are spread over the months for which they represent. This creates a possibility of having periods of increased dynamics activity at particular points when quarterly remitters are in contact with Canada Revenue Agency. No adjustments are made for these firms in the micro files used to create the business dynamics estimates. To the extent that these events occur similarly every year, seasonal adjustment should remove the effects of irregular remittance patterns.