Following five consecutive downturns, overall business confidence has remained flat amid trade pressures and a weak labour market, according to the third-quarter edition of Business Insights Quarterly from the Canadian Chamber of Commerce’s Business Data Lab (BDL).
“Businesses are showing remarkable resilience in the face of policy uncertainty, tariff threats and a softening labour market,” said Patrick Gill, the Business Data Lab’s vice president, in a news release. “With CUSMA review approaching, the stakes for Canadian competitiveness are high.”
“While Canada last consulted on CUSMA not long ago, today’s trade environment shifts week to week, making this process essential,” said Catherine Fortin-LeFaivre, the chamber’s senior vice president for international policy and global partnerships, in a statement.
“We welcome the government hearing directly from the businesses that are working tirelessly to keep supply chains moving, safeguard millions of jobs, and protect strategic industries across North America,” Fortin-LeFaivre added. “Trade simply doesn’t happen without businesses.”
In its news release, the chamber noted that Canadian businesses are cautious rather than optimistic, with a -1.6 percent annualized contraction in the second quarter of 2025, the sharpest since the COVID-19 pandemic demonstrated Canada’s exposure to worldwide export shocks and weak investment.
The chamber shared that BDLNow, the BDL’s new real-time nowcast model, predicts a continuing trend of low growth for the Canadian economy, specifically 1.7 percent for the third quarter.
Key insights
In its news release, the chamber summarized the report’s findings for the third quarter:
- Business confidence stayed steady in the third quarter amid fragile recovery
- One in three organizations engaged in trade experienced negative US tariff impacts, with manufacturers and retailers most affected
- Preference utilization for the Canada-United States-Mexico Agreement (CUSMA) rose to a two-decade high last July as businesses strove to preserve margins and evade excess costs
- Job vacancies went down
- Unemployment increased
- The construction, accommodation and food services, and agriculture sectors continued to experience acute labour market obstacles
- Youth unemployment remained well above pre-pandemic levels
- Businesses reported weak consumer demand as the most significant challenge to growth for four consecutive quarters
- Small businesses advanced trade resilience, with micro-exporters seeing the swiftest US sales gains and offsetting muted optimism among larger organizations
The chamber noted that these findings highlighted how Canadian businesses should balance dealing with increasing trade tensions and weak domestic demand while getting ready for policy uncertainty associated with the CUSMA processes.
“CUSMA is a vital engine of our economy, built on trade and the success of an integrated North America,” Fortin-LeFaivre said in the statement. “The best thing for business is to not lose your number one customer.”
Fortin-LeFaivre added that the chamber had plans to submit recommendations relevant to Canada, the US, and Mexico regarding their processes.