Canada Small Business Confidence at 1-Year Low

Canada's CFIB Business Barometer long-term index, which tracks 12-month forward expectations for business performance, fell sharply to 46.3 in May 2026 from a downwardly revised 58.0 in April, marking the lowest reading in a year. The short-term optimism index, based on the 3-month outlook, also declined by roughly 7 points to 47.9, reflecting weaker sentiment. The decline in long-term expectations was broad-based across sectors, with some of the steepest drops recorded in retail (53.4 vs. 63.5), health and education (51.7 vs. 61.5), hospitality (47.3 vs. 57.1), and agriculture (44.6 vs. 53.3). Meanwhile, the average price increase eased to 3.1% from 3.2% in March, although remaining elevated, while the average wage growth remained unchanged at 2.4%. Full-time hiring intentions remain weak, with more firms planning to cut staff (16%) than expand their workforce (14%).

Canada's CFIB Business Barometer long-term index, which tracks 12-month forward expectations for business performance, increased to 58.5 in April 2026, after falling sharply to a downwardly revised 55.7 in March. The short-term optimism index, based on the 3-month outlook, also posted a modest gain, rising by about 1 point to 55.4. Expectations for the next 12 months increased mostly in retail (63.7 vs 62.7), info, arts and recreation (57.8 vs 55.7), personal services (61.4 vs 60.3) and construction (57.3 vs 50). In contrast, a decline was seen mostly in transportation and warehousing (52.9 vs 53.8), professional and business services (57.4 vs 59.6) and hospitality (57.1 vs 58.2). Meanwhile, the average price increase jumped up to 3.2% in April, marking the highest monthly change since the tariff war last March. The average wage increase increased slightly to 2.4%, the first notable shift after roughly 12 months of readings clustered around the 2.2% mark.

Canada's CFIB Business Barometer long-term index, which tracks 12-month forward expectations for business performance, sank to 55.8 in March of 2026 from the over three-year high of 65.3 in the previous month. The sharp decline reflected the immediate impact of higher energy prices and inflation expectations following the outbreak of war in the Middle East, which halted energy exports from the region. Consequently, the business barometer plunged for transportation and housing (-7.6 to 53.8) due to higher fuel costs and agriculture (-4.6 to 54.6) as the jump in natural gas and helium costs risked the supply for fertilizers. In the meantime, lower confidence was also noted for professional services (-4.1 to 59.4) and construction (-1.9 t 57.3).