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Helping solo operators hire their first employee could create up to 213,000 small businesses per year—offsetting closures and sustaining Canada’s business base
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MONTREAL, Feb. 11, 2026 (GLOBE NEWSWIRE) — Self-employment is having a resurgence in Canada, and it could help reverse declining entrepreneurship levels and drive economic growth according to a new study by the Business Development Bank of Canada (BDC).
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After a pandemic-era decline, self-employment rebounded in 2024, with about 70,000 Canadians joining the ranks. Today, two million Canadians work for themselves, and nearly four in 10 intend to hire or invest in the coming year.
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This hiring intention matters. Close to half of new micro-businesses are launched by former solo operators who make their first hire. At scale, this transition could add up to 0.8% to GDP—about $24 billion—in one year. New tools—particularly accessible AI—can help solo operators boost productivity, systematize operations, and accelerate the path to a first hire.
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“Canada’s self‑employed are a hidden engine of growth,” said Pierre Cléroux, Vice‑President, Research and Chief Economist, BDC. “With the right support, a one-person business can hire, scale into a small- or medium-sized enterprise (SME) and, over time, become part of the next generation of ownership transitions.”
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The report finds that if a significant share of self-employed workers hire their first employee and become employers, Canada could see up to 213,000 annual transitions from solo operators to employer businesses—helping buttress the country’s business base amid normal micro-business churn.
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Key findings:
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- Scale and intent: Two million self‑employed Canadians now work for themselves; nearly 40% plan to grow through hiring or investment in the next year.
- Pivotal moment: Hiring a first employee is the turning point—self‑employment becomes employer entrepreneurship.
- Economic role: Self‑employment helps buffer the labour market during periods of rising unemployment, and can be a significant wealth creator.
- Financing barriers: 73% of self-employed Canadians rely on personal funds (vs. 55% of micro‑businesses).
- Policy payoff: Targeted support can raise new‑business survival by up to 20 percentage points within three to five years.
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“Think of self-employment as the launch pad in a continuum of SME creation,” added Cléroux. “Our recent study on business transfers shows the other side of this continuum—thousands of SMEs changing hands in the years ahead. Strengthening the front end—where solo operators become employers—builds more resilient businesses, more jobs and better succession outcomes.”
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Supporting self-employed Canadians
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The study also highlights persistent challenges, including client acquisition and cash-flow management. These challenges are compounded by limited access to financing: The vast majority of self-employed Canadians (73%) rely on personal funds, and only 39% have a commercial bank account, compared with 52% of micro-businesses.
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BDC’s research underscores the importance of supporting self-employed Canadians as they scale up. Increased support can boost survival rates of new businesses by 20 percentage points in the first three to five years.
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“Turning self-employment into entrepreneurship is critical,” said Cléroux. “Every new employer strengthens Canada’s economic fabric. Targeted support at the first‑hire stage can improve survival, unlock productivity, and help rebuild Canada’s business base.”
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