Canadian small businesses’ confidence is at an all-time low amid US trade tensions

"No one knows when the tariff war will end, and businesses are worried the worst is yet to come."

The index dropped 24.8 index points to 25.0, which is a lower mark than at any time during the 2020 pandemic, 2008 financial crisis or even the September 11, 2001 attacks.

How is this tension affecting Canadian small businesses?

To recoup the losses caused by tariffs and the ongoing financial struggles, small businesses plan to raise prices by an average of 3.7%, an increase from 3% in February — the largest month-over-month spike in price increase intentions since the pandemic. Average wage increase plans dropped to 1.9% from 2.2% last month.

Weak small business optimism is also translating into lower hiring plans, with 19% of small firms planning to lay off in the next few months (up from 13% in February), and only 11% looking to hire.

Insufficient demand has been steadily trending upwards since November 2024, reaching a new historical high of 59% of affected small firms in March, eclipsing the pandemic high mark of 53% for this indicator.

Are there regional or sector differences?

Confidence among all sectors also fell, with hospitality (17.0), manufacturing (18.6), transportation (21.0) and agriculture (21.3) at the bottom of the scale. In addition to US tariffs, agriculture businesses are also facing 100% tariffs from China on canola oil, peas and oil cakes as well as 25% tariffs on pork and aquatic products such as lobsters.

This dramatic drop in confidence is being felt across the country, according to CFIB’s survey. All provinces registered a drop in optimism, with the three largest provinces among the most pessimistic: Ontario (23.4), Alberta (24.1) and Quebec (24.9).

"Business confidence is at abysmal levels. 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," said Corinne Pohlmann, CFIB’s executive vice-president of advocacy.

Survey methodology

CFIB’s survey is based on 1,065 responses from a stratified random sample of its members, to a controlled-access web survey from March 5 to 7. Measured on a scale between 0 and 100, an index below 50 means owners expecting their business's performance to be weaker over the next three or 12 months outnumber those expecting stronger performance.