Manitoba and Saskatchewan followed Ontario in leading the country in the downward trend in small business bankruptcies over the first half of 2002, says CIBC’s new report on small business.

Bankruptcies for the two provinces dropped by 19.7 per cent compared to the same period a year earlier and outstripped the 6.5 per cent rate of decline nationally.

“The prospects throughout Canada for small business growth over the next year are strong: the economy is recovering, the Canadian dollar makes exports attractive, and the consumer continues to spend,” said Benjamin Tal, CIBC senior economist in a news release. “We should all care deeply about the health of the small business sector. It’s a major employer of Canadians and a key contributor to national economic health.”

Weathering last year’s soft economic conditions, Ontario led all provinces for small business formations of 49 employees or less and ranked second only to Alberta in overall small business creation, said the report.
Oshawa, Edmonton, Kitchener, Toronto, and Ottawa were in the top six Canadian cities leading small business formations of under 50 employees.

“Ontario should benefit from more outsourcing in manufacturing, still strong consumer spending supporting retail trade, and low interest rates that will keep the housing market and construction trades relatively strong.”

However, the slow recovery in corporate spending through 2003 suggests that small businesses catering to industries such as airlines and advertising will show below average performance.

“The strength of the small business sector is a good sign for all us, as small business is a major employer of Canadians and a key contributor to national economic health,” said Tal.