{"id":277388,"date":"2025-11-12T00:23:10","date_gmt":"2025-11-12T00:23:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/277388\/"},"modified":"2025-11-12T00:23:10","modified_gmt":"2025-11-12T00:23:10","slug":"canadian-job-growth-is-all-in-on-big-business-amplifying-risks-bmo","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/277388\/","title":{"rendered":"Canadian Job Growth Is All In On Big Business, Amplifying Risks: BMO"},"content":{"rendered":"

Canada\u2019s growth engine has long been small businesses, but the country is all in on large firms. BMO Capital Markets<\/a> warns that while large firms make up only a small share of total employment, they\u2019ve accounted for virtually all job gains in 2025. The bank cautions that this imbalance is amplifying downturn risks and could slow the next recovery.\u00a0<\/p>\n

Canadian Job Growth Driven Entirely By Just 20% of Firms<\/p>\n

Canada\u2019s job growth is increasingly concentrated in large firms (500+ employees). Canadian firms added 292,000 jobs in 2025, with large firms posting a net gain of 592,000. That\u2019s not a typo\u2014small firms lost 300,000 jobs over the same period. The silent contraction of small businesses is going largely unnoticed, and BMO warns that ignoring it can be a costly mistake.\u00a0<\/p>\n

Canadian Policymakers Are Gambling On A Structural Shift<\/p>\n

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Source: BMO Capital Markets; StatCan.\u00a0<\/p>\n

The gains at large firms were broad-based, led by education and public administration\u2014signalling the shift isn\u2019t just a result of one high-growth sector. Historically, small firms have driven hiring, but job growth has been increasingly concentrated in large employers.\u00a0<\/p>\n

\u201cThe difference in hiring trends may reflect the greater ability of large firms to adjust to tariffs and an uncertain policy environment,\u201d explains BMO senior economist Sal Guatieri.\u00a0<\/p>\n

The trend is being amplified by recent trade shocks. It\u2019s unclear whether this reflects targeted policy support for large firms or disproportionate exposure among small businesses. Either way, this isn\u2019t new\u2014it\u2019s an existing structural shift that\u2019s accelerating.\u00a0<\/p>\n

Canada Is Amplifying Risk By Dismissing Small Businesses<\/p>\n

The trend may have flown under the radar for policymakers, but BMO warns it poses a growing risk to the economy. Guatieri notes that large firms are doing more than 100% of the hiring but make up just 20% of total employment. That imbalance creates a concentration risk\u2014if large firms become overextended, job growth could collapse abruptly.\u00a0<\/p>\n

Policymakers often sideline small businesses, favouring a powerful minority of large firms. Some justify this by pointing to small firms leading layoffs in downturns, ignoring that this is an early signal\u2014the canary in the coal mine. Their response effectively blames the warning and reallocates the canary budget to hiring more miners.\u00a0<\/p>\n

Further complicating this risk is the fact that small firms are the first to hire when the economy expands. Not only does this amplify downturn risks, it also undermines the recovery. The problem here isn\u2019t just a lack of diversification\u2014it\u2019s a failure to grasp how the labour market rebounds.\u00a0\u00a0<\/p>\n

\u201cThis divergence by firm size raises a downside risk,\u201d he warns. \u201cSo, unless they keep punching above their weight\u2014or smaller companies ramp up hiring\u2014overall job growth could weaken.\u201d<\/p>\n

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