Retail, hospitality and construction drive gains as agriculture and wholesale sentiment weakens
Small business confidence in Canada slightly rebounded in April, according to the Canadian Federation of Independent Business (CFIB)’s Monthly Business Barometer survey.
The long-term index rose by 9.3 points, climbing from a record low of 25.0 in March to 34.8. However, the current level still mirrors the outlook seen in March 2020, at the onset of the pandemic.
“The long-term outlook has slightly recovered, but it’s still at abysmal levels,” said Andreea Bourgeois, CFIB’s director of economics.
She noted that optimism has only returned to March 2020 levels and that despite a slight upward trend — partly due to the elimination of the federal carbon tax — small businesses remain worried and uncertain.
“We’ve only gone from an extremely pessimistic outlook to just pessimistic,” she added.
The short-term index, which gauges a three-month outlook, increased by 8 points to 40.1. Still, both indicators remain well below their historical averages.
According to the CFIB’s data, businesses continue to cite demand as their primary challenge, with 55 percent reporting insufficient demand as a barrier to growth or production.
Hiring expectations in April showed a slight improvement but remained weak. Fourteen percent of firms reported plans to hire, while 17 percent indicated upcoming layoffs—figures that fall below the seasonal average.
Businesses projected average price increases of 3.5 percent and anticipated wage growth of 2.2 percent over the coming months. The price increase estimate held steady from March, while the wage forecast returned to February levels.
Regionally, all provinces continued to show low confidence levels, with minor improvements in some areas. The four largest provinces reported long-term index values ranging from the low to mid-30s.
Sectorally, small gains in confidence were reported by firms in retail, hospitality, and construction. Conversely, agriculture and wholesale sectors recorded further drops in sentiment.
Bourgeois noted, “The cost of doing business is still expensive. The uncertainty caused by the current political environment and the trade war is slowing down consumer spending, leading to fewer sales and lower revenue for many business owners.”
Data from the CFIB also revealed the ongoing impact of US tariffs on Canadian SMEs.
Seventy percent reported negative effects, while 20 percent reported no impact and 7 percent remained unsure.
Firms engaged in international trade reported significantly lower optimism compared to businesses operating solely within Canada.
According to CFIB, some cost constraints such as fuel, tax, and wage concerns slightly eased in April.
However, other pressures intensified, including rising input product costs, which affected 45 percent of respondents, and equipment and technology expenses, which impacted 34 percent.
