Small business confidence has been slow to increase in September, with the Canadian Federation of Independent Business’ Monthly Business Barometer reporting a long-term small business confidence score of 50.2.
The labor market has remained weak, with 18 percent of firms considering layoffs and just 12 percent intending to recruit in the coming months. On average, price plans are at 2.7 percent while wage plans are at 2.2 percent.
Twenty percent of businesses found it difficult to distribute products following post-labor disruptions.
“Based on our data, it does not look like the labour market will strengthen anytime soon. The share of businesses with hiring plans remains below its usual seasonal pattern, while more and more firms have stated layoff plans in recent moments, significantly exceeding seasonal patterns,” said Andreea Bourgeois, CFIB’s economics director, in a statement.
Sixty-seven percent of small firms highlighted tax and regulatory expenses as their main concern, with insurance costs being a close second (cited by 66 percent). Moreover, 66 percent of businesses reported wage cost challenges this month compared to 59 percent in August.
Fifty-five percent of businesses also highlighted persisting low demand. Thirty-six percent of businesses are battling capital equipment and technology expenses.
“The subpar optimism we’ve been seeing speaks volumes about the current uncertain business environment. Business owners have hardly been positive this year, and it’s not surprising given the trade and economic uncertainty, declining demand, and rising operational costs,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
Gaudreault noted that Canada could be heading into a new economic phase.
“With the pace of tariff announcements slowing down a bit and the discussion shifting to how Canada can durably adjust to a new trade and policy environment, we may be entering a new phase on the economic calendar,” Gaudreault said. “Meanwhile, business owners report that there are still many fiscal, regulatory and labour challenges that prevent them to contribute to the economic recovery. Certainty, stability and confidence remain in short supply and sending the right policy signals this fall could help turn the tide.”
CFIB’s September Business Barometer obtained feedback from 752 CFIB member respondents. The survey was conducted from September 3 to 10.