First hires by solo operators could add $24 billion to GDP and strengthen future workplace benefits
Self-employment’s comeback in Canada could quietly reshape the country’s business base and support long-term job creation, especially if more solo operators take the critical step of hiring their first employee.
Self-employment rebounded in 2024 after a pandemic-era decline, with about 70,000 Canadians joining the ranks, according to a new study by the Business Development Bank of Canada (BDC).
Today, two million Canadians work for themselves, and nearly four in 10 intend to hire or invest in the coming year.
The report stresses that this first hire is the pivotal moment when self-employment becomes employer entrepreneurship.
Close to half of new micro-businesses are launched by former solo operators who make that initial hire. At scale, this transition could add up to 0.8 percent to GDP—about $24bn—in one year.
New tools—particularly accessible AI—can help solo operators boost productivity, systematize operations, and accelerate the path to a first hire.
Pierre Cléroux, vice-president of research and chief economist at BDC, said “Canada’s self‑employed are a hidden engine of growth.”
He added that 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.”
The study 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.
It also notes that self-employment helps buffer the labour market during periods of rising unemployment and can be a significant wealth creator.
Financing, however, remains a major constraint.
The study highlights persistent challenges, including client acquisition and cash-flow management, which are compounded by limited access to financing.
The vast majority of self-employed Canadians (73 percent) rely on personal funds, and only 39 percent have a commercial bank account, compared with 52 percent of micro-businesses.
Overall, 73 percent of self-employed Canadians rely on personal funds, versus 55 percent of micro‑businesses.
Policy design emerges as a lever.
According to the report, targeted support can raise new‑business survival by up to 20 percentage points within three to five years.
BDC’s research underscores the importance of supporting self-employed Canadians as they scale up, noting that increased support can boost survival rates of new businesses by 20 percentage points in the first three to five years.
Pierre Cléroux described self-employment as “the launch pad in a continuum of SME creation.”
He said BDC research shows “thousands of SMEs” will change hands in the coming years, and argued that helping solo operators become employers can lead to “more resilient businesses, more jobs and better succession outcomes.”
Cléroux said “turning self-employment into entrepreneurship is critical.”
He added that “every new employer strengthens Canada’s economic fabric” and that targeted support at the first‑hire stage can improve survival and productivity.
