Canadian economy in for a slow rebound in Q3, no signs of a recession and inflation on a continued downward trend, CFIB forecasts

Toronto, July 19, 2023 – After falling nearly flat in Q2 2023, economic growth is expected to see a slow rebound to 1.4% in Q3 2023, according to the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB). There is no recession in sight for the short term.

CPI inflation, both total and excluding food and energy, is expected to continue its downward trend, reaching 3.3% and 3.7% in Q2 and 2.4% and 2.6% in Q3, respectively. 

“Key macroeconomic indicators, such as GDP, retail sales and inflation, appear to be moderating. We forecast that Q3 inflation, both total and core, will be within or likely very close to the Bank of Canada’s inflation-control target range of 1 to 3 per cent,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.

Other estimates from the report show private investment continued to decline in Q2, with a contraction of 1.7%. This slowdown was due to lower business sentiment, elevated expectations regarding wage increases, as well as fewer unfilled orders compared to the beginning of the year. Business investment should renew with growth in Q3 but remain lower than a year ago. 

Employment growth turned negative at -1.0% in Q2 2023, mainly because of the federal workers’ strike. A rebound is expected in Q3 2023, although the growth rate should be more moderate than a year ago.

Job vacancy rates remain virtually unchanged in Q2
The national job vacancy rate maintained its elevated trend in Q2, declining just 0.1% to 4.6%. This represents 656,900 unfilled positions. Businesses in Quebec (5.3%) and New Brunswick (5.1%), as well as those in the personal services (7.5%), construction (6.5%) and hospitality (5.8%) sectors, had the highest vacancy rates.

“We’re not seeing much change quarter-over-quarter and vacancy rates remain well above previous historical peaks, but on the year-over-year comparison, we can see some easing in labour markets,” said Laure-Anna Bomal, CFIB economist.

Other sections of the report this quarter take a closer look at the construction sector and compare the businesses most at risk of closing to the overall business sector.

“High borrowing, insurance and wage costs, are already affecting the construction industry more than other sectors. Last week’s Bank of Canada interest rate increase is likely not going to be alleviating that pressure any time soon,” said Andreea Bourgeois, Director of Economics.

Read the full Main Street Quarterly here.

For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at

About AppEco
AppEco is a consulting firm specializing in economic and strategic analysis. It possesses in-depth technical expertise and delivers first-class services in applied economics: economic impact studies, surveys and polls, cost-benefit analyses, modelling, econometrics, pricing, etc. Its mission is to provide useful services that contribute to economic growth and the success of clients’ projects. AppEco works with firms of all sizes, from small to multinationals, as well as governments and non-profit organizations. Learn more at