The Canadian Federation of Independent Business (CFIB) has announced that optimism among Canada’s small businesses in February rose to 64.8 index points, the first time since May 2022 that this metric has exceeded the 60‑point threshold.
According to CFIB’s most recent Monthly Business Barometer® survey, confidence levels were just above or around their historical averages in nearly all provinces, with most sectors reporting gains in their 12-month outlook.
Per CFIB, among small businesses polled:
- While insufficient demand remained the top growth constraint, staying significantly above its historical average, 49 percent reported pressure due to this issue in February, compared with 54 percent in January
- Apart from insufficient demand, wage costs (58 percent), insurance costs (58 percent), and tax and regulatory costs (58 percent) were the biggest growth barriers this month
- Average price increase plans fell to 2.2 percent
- Average wage increase plans climbed to 2.3 percent
- Within the next few months, 19 percent planned hires, while 13 percent contemplated layoffs
CFIB noted that it conducts this online survey at the start of each month. CFIB based its February findings on 601 responses from a stratified random sample of its members, received from Feb. 3–17.
‘The full story’
“While long-term optimism was higher this month, it doesn’t tell the full story,” said Andreea Bourgeois, CFIB’s economics director, in the media release. “The February reading masks the overall trend of sluggish optimism.”
According to Bourgeois, over the last five quarters tracked, more businesses have left Canada’s markets than ventured into them.
In CFIB’s media release, Bourgeois claimed that the country’s “entrepreneurial drought” called for bold policies, including tax reductions and the imposition of internal trade barriers, to strengthen the Canadian entrepreneurial landscape and make it more competitive.
“While there’s still a great deal of uncertainty, especially since the recent announcement of the 10 percent global tariff, many small firms are feeling more optimistic heading into the spring,” said Laure-Anna Bomal, CFIB economist, in the media release.
Bomal shared that business owners have considered the tax burden too demanding, equipment costs too high, and the insufficient accessible funding for small businesses discouraging. Bomal concluded that Canada’s governments should make small businesses a top priority when delivering budgets.