Media releasePublished on 25 July 2024

Canadian small business sector finally sees positive change, according to new Xero data

The latest XSBI report shows improvements across late payment times, sales growth and time-to-be-paid for the sector

Toronto — July 25, 2024 — Today global small business platform, Xero, released its quarterly Xero Small Business Insights (XSBI) report for Canada, based on data from January to March 2024. The update showed incremental improvements for the sector across sales growth, late payments and time-to-paid metrics, a signal that Canada's small business economy is finally beginning to make gradual gains. This update validates the positive signals indicated by the previous quarter’s XSBI report, which showed Canada’s small business sales declines levelling off for the first time since 2021.

From January to March 2024, Canadian small business sales fell by an average of 4.6 % y/y. While technically a greater decline than the previous quarter’s result (-3.3% y/y), the March quarter’s results were heavily distorted due to an unusually large decline in March (-10.9% y/y), which can be attributed in large part to Good Friday, a national public holiday, falling in March this year rather than April. The two-month average sales result for January and February of -1.5% y/y paints a more realistic picture of small business sales performance in the March quarter and indicates a significant improvement for Canada’s small business economy since the previous quarter.

In the three months to March, both late payment times and time-to-be-paid also improved for Canadian small businesses. Down from 8.2 days in the previous quarter’s report, late payment times shortened to an average of 7.5 days in the March quarter. Small businesses also saw wait times for payments shorten from 29.3 days on average to 28.2 days - a particularly encouraging result for Canadian small businesses, which have seen continuous improvement on this metric since Q1 2023.

“Canada’s small businesses continue to demonstrate resilience in the face of a volatile Canadian economy, and the latest XSBI results signal that their hard work may gradually be paying off," said Ben Richmond, Managing Director, North America at Xero. "Small businesses should feel encouraged by the positive trends being indicated by the market and the clear gains made by the sector during the last quarter."

The regionalized XSBI data also showed varying results across British Columbia, Alberta and Ontario. Provincial highlights include:

  • Payment times for small businesses in British Columbia were the shortest compared to Alberta and Ontario, at 27.6 days, compared to 28.2 days in Alberta and 28.6 days in Ontario.
  • Despite having the highest payment times, Ontario was the only province between Alberta, British Columbia and Ontario, to see payment times shorten compared to the previous quarter, decreasing from 30 days to 28.6 days.
  • Ontario’s sales growth outperformed the other provinces as well as the national average (-1.5%), with a decrease of 0.4% y/y on average in January and February. This was a major improvement compared to the December quarter, in which the province saw sales fall by 4.9% y/y on average.

“Canada’s small businesses have been through a lot, and we’re hopeful this new Xero Small Business Insights data will provide a sense of relief for those who have been feeling the impact of the economic downturn in recent quarters,” said Louise Southall, Economist, Xero. “Looking to the future, the cut in the official cash rate by the Bank of Canada in June should provide further support for small businesses in the coming rounds of XSBI data, as financial pressure on Canadian consumers gradually eases.”

To access the latest data, visit xero.com/xerosbi.

ENDS

Media Contact

Xero | Diandra Binney | diandra.binney@xero.com

About Xero

Xero is a global small business platform with 4.2 million subscribers. Xero’s smart tools help small businesses and their advisors to manage core accounting functions like tax and bank reconciliation, and complete other important small business tasks like payroll and payments. Xero’s extensive ecosystem of connected apps and connections to banks and other financial institutions provide a range of solutions from within Xero’s open platform to help small businesses run their business and manage their finances more efficiently.

For all media inquiries, please contact the Xero media team.

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.