Index falls below pandemic levels as 59% cite insufficient demand and 19% plan layoffs
Small business confidence in Canada dropped sharply in March, reaching the lowest point recorded by the Canadian Federation of Independent Business (CFIB) since the index began.
The Business Barometer long-term index fell by 24.8 points to 25.0, dipping below levels seen during the COVID-19 pandemic, the 2008 financial crisis, and post-9/11 period.
“All provinces registered a drop in optimism,” CFIB reported, with Ontario (23.4), Alberta (24.1), and Quebec (24.9) among the most pessimistic regions.
Sector confidence also declined across the board. Hospitality led the downturn with an index of 17.0, followed by manufacturing at 18.6, transportation at 21.0, and agriculture at 21.3.
Tariff impacts were a key concern. Alongside ongoing US tariff disputes, agriculture businesses now face 100 percent tariffs from China on canola oil, peas, and oil cakes, and 25 percent tariffs on pork and aquatic products like lobsters.
“Small business owners are feeling pessimistic about their business's perspectives for the next few months or even beyond,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
“It's hard to make critical decisions for the long, medium or short term when so much can change within a matter of hours.” He added, “No one knows when the tariff war will end, and businesses are worried the worst is yet to come.”
Demand conditions continued to worsen. The share of small firms citing insufficient demand rose steadily since November 2024, hitting 59 percent in March and surpassing the previous pandemic-era high of 53 percent.
Rising costs also remain a challenge. In response, businesses now plan to increase prices by an average of 3.7 percent, up from 3.0 percent in February—the steepest monthly jump in price intentions since the pandemic.
Meanwhile, wage increase plans declined to 1.9 percent from 2.2 percent.
Hiring sentiment weakened. Only 11 percent of small firms said they intend to hire in the coming months, while 19 percent now expect to lay off staff, a rise from 13 percent in February.
“Business confidence is at abysmal levels,” said Corinne Pohlmann, executive vice-president of Advocacy at CFIB.
“If this doesn't send a strong warning signal to policymakers that businesses urgently need all the help they can get to weather this storm, including a much-improved business environment here in Canada, then I'm not sure what will.”
She added that governments could help restore confidence through measures such as:
- Making carbon tax rebates for small businesses tax free
- Adopting full mutual recognition across Canada
- Increasing the lifetime capital gains exemption
- Providing accessible supports to small businesses
“Now is the time to show strong support to small businesses,” Pohlmann said. “Taking proactive actions… would significantly boost confidence at a time when small businesses need it the most.”
| The March Business Barometer is based on 1,065 CFIB member responses collected online from March 5 to 7. Results are accurate within ±3.0 percent, 19 times out of 20. The long-term index (0–100) reflects business outlooks over 12 months; below 50 indicates more expect weaker than stronger performance. CFIB also updates the index with late responses each month. |
