Canada Small Business Confidence Weakens in August

Canada’s CFIB Business Barometer long-term index, measuring 12-month business expectations, fell to 57.6 in August 2026 from 58.6 in June. Short-term optimism, based on the three-month outlook, also declined sharply to 52.4 from 57.6, with confidence deteriorating in manufacturing, construction, transportation and utilities, and information, arts and recreation. By contrast, long-term sentiment improved across most sectors, with agriculture the only exception (39.1 vs 39.2). Meanwhile, firms’ average planned price increases remained stable at 2.7%, while expected wage growth edged up to 2.5%. Hiring intentions were broadly unchanged, although more firms planned to lay off (15%) than hire (13%). Weak demand remained the most frequently cited constraint, affecting nearly half of businesses, while higher fuel, tax, insurance and wage costs continued to pressure operating expenses.

Canada's CFIB Business Barometer long-term index, which measures 12-month business expectations, climbed to 58.3 in July 2026 from 50.1 in June, reaching its highest level since tensions in the Middle East began. The short-term optimism index, based on the three-month outlook, also rose sharply to 57.0 from 47.2. Confidence improved across sectors, with most remaining in positive territory, although persistent uncertainty continued to weigh on near-term sentiment. Meanwhile, firms' average planned price increases eased to 2.7% from 3.0%, while expected wage growth held steady at 2.3%. Hiring intentions improved modestly, as the share of businesses planning to add full-time staff increased to 15% from 13%, exceeding those expecting to reduce headcount (11% vs. 12% previously). Weak demand remained the most frequently cited constraint, affecting half of all businesses, while higher fuel, taxes, insurance, and wage costs continued to pressure on operating expenses.

Canada's CFIB Business Barometer long-term index, which tracks 12-month forward expectations for business performance, rose to 49.6 in June 2026 from 46.3 in May. The short-term optimism index, based on the 3-month outlook, declined to 46.1 from 48.1 in the prior month. Sentiment weakened across most sectors, namely retail (48.5 vs 53.6), transportation and utilities (45.3 vs 46.7), agriculture (43 vs 45.5) and accommodation and food services (38.8 vs 47.3), with most also recording short-term declines. The average price increase edged down to 3% from 3.1%, while average wages moderated to 2.3% from 2.4%. Although staffing intentions improved, labor market sentiment remained weak, with more firms planning to lay-off (13% vs 16% in May) than hire (12% vs 14%). Low demand remained the most commonly cited supply-side constraint, reported by 53% of firms. On the cost side, fuel prices continued to be the dominant constraint on input supply.