Growth in the Canadian economy is set to be sluggish in the third and fourth quarters of 2025, according to the “Main Street Quarterly” report published by the Canadian Federation of Independent Business.
The CFIB estimated and predicted that the economy ticked up by 0.8 percent in Q3 2025 and will increase at the rate of 0.2 percent in Q4. Private investment estimates dropped by 3.7 percent in Q3 and will decline by a further 4.5 percent in Q4.
Retail sales also fell by 0.2 percent in Q3; this figure is predicted to increase by 1.8 percent in Q4. Per the CFIB, this is significantly down from the historical average.
In the national private sector, the job vacancy rate held at 2.8 percent in Q3, reflecting 391,100 vacancies. According to the quarterly sectoral profile, the goods-producing and service-offering businesses are more pessimistic than they were in Q1, although service-offering businesses have rebounded more quickly and their confidence level exceeded the average across all industries.
“While some of the trade turmoil is easing and inflation is more under control, considerable economic uncertainty remains, along with various headaches for Canadian businesses. These subpar conditions explain why our estimates and forecasts for the second half of 2025 show a weak GDP, retail sales, labour market and investment picture,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research, in a statement.
The report also highlighted the Buy Canadian initiative. Forty-three percent of businesses pushed buy-local campaigns, and 61 percent of these said their sales of Canadian products increased. However, just 15 percent recorded revenue boosts; moreover, high costs and low demand meant that only 9 percent of businesses increased their profits.
“Despite unfavorable signals, small business owners are hoping for a better-than-expected final stretch for 2025 and a solid foundation to enter the new year. Positive signals in the upcoming federal budget coupled with strong holiday sales could certainly help on that front,” Gaudreault said.
CFIB’s estimates and predictions for the "Main Street Quarterly" report were made in partnership with economic and strategic analysis specialist firm AppEco.