The upcoming holiday season has spurred a hike in small business long-term confidence, according to the recent Business Barometer released by the Canadian Federation of Independent Business.
Most provinces recorded an uptick in long-term optimism in what the CFIB said was the best reading for 2025. Retailers across sectors recorded a 14.2-point increase in confidence for the next 12 months, hitting 57 points.
Nonetheless, this falls below the historical average of 57.8 points.
“While it’s encouraging to see businesses feeling less pessimistic this month, it doesn’t paint the whole picture. The 12-month index across Canada is still below its historical average and is only roughly back to levels we’ve seen at the beginning of this year and in the past three years overall, when we were stuck at a low plateau of optimism,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research, in a statement.
Gaudreault added that confidence levels have been erratic, “reflecting the ongoing uncertainty and mixed feelings small businesses have about the state of the economy.”
CFIB vice-president of legislative affairs Ryan Mallough noted that the holiday season was “make-or-break” for small businesses in Canada. He said the number of people buying Canadian goods had risen in the wake of the ongoing trade scuffle with the US.
Thirty-three percent of small businesses rely on the anticipated holiday sales, per CFIB data. Twenty percent expect sales revenue to drop compared to the previous holiday season, while 52 percent expect sales to stay flat.
For 56 percent of businesses, lackluster demand is the primary growth obstacle going into the holiday season. Seventy-two percent of small businesses said they grappled with tax and red tape issues, reflecting displeasure with the tax and regulatory environment.
Gaudreault said the federal budget had not fundamentally improved the environment for small and medium-sized businesses.
“Our recent research on SMB tax gaps has clearly demonstrated entrepreneurs in Canada are at a very significant tax disadvantage compared to their U.S. counterparts. Innovators, local risk-takers and wealth creators aren’t being heard when it comes to setting the right economic priorities, and this is probably what is also being captured in our data this month,” Gaudreault said.
Price plans fell from 2.7 percent over the last four months to 2.5 percent; meanwhile, average wage plans remained at 2.2 percent. Hiring plans in November were modest, according to CFIB.
The federation is celebrating Small Business Saturday on November 29 as a yearly event centered on shopping local. It advocates for small business resilience amid increasing costs, labor shortages, and economic uncertainty.