Low demand continues to be the biggest damper on business growth, highlighting the weakness of the economy coming into the year according to the Canadian Federation of Independent Business.
Per the federation’s December 2025 Business Barometer, small business positivity ticked up in December 2025, with long-term confidence rising by 4.2 points to 59.9 compared to November. This falls just under the index's historical average.
However, CFIB chief economist and vice-president of research Simon Gaudreault said in a statement that despite the recovery of confidence, 54 percent of businesses considered insufficient demand to be the main growth obstacle.
“December’s numbers are encouraging, but they don’t tell the full story. While confidence is getting back to its historical average, more than half of businesses are continuing to report insufficient demand as the top growth constraint. That’s a clear signal that the economy is still fragile heading into 2026”, Gaudreault said.
In British Columbia, Ontario and Alberta, long-term business confidence was at least 60; however, in Quebec it plummeted to 50. Short-term confidence was low across the board.
The health and education, retail, and insurance sectors performed in December but the hospitality and construction industries recorded seasonal declines.
“Business owners have told us that 2025 has been a real rollercoaster. It’s been both challenging and unpredictable. Even with some positive signs overall, concerns about demand, costs and staffing continue to weigh heavily as ongoing trade uncertainty makes it hard to plan ahead,” CFIB economics director Andreea Bourgeois said in a statement.
The three main cost constraints identified by respondents were tax and regulatory costs (62 percent), wage costs (60 percent), and insurance costs (58 percent). While price hikes and wage growth plans were relatively stable (2.6 percent and 2.2 percent, respectively), more businesses expressed their intent to cut full-time roles than those who intended to hire.
The CFIB’s December Business Barometer obtained responses from 355. The survey was held from December 2-8.