Toronto, January 15, 2026 – The Canadian economy is expected to grow in Q1 2026, finds the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB).
Key highlights of the Q4 2025 edition of the Main Street Quarterly report
• CFIB’s estimates and forecasts in partnership with AppEco suggest the Canadian economy grew by 0.6% in the fourth quarter of 2025 and is expected to grow by 3.4% in Q1 2026. The Consumer Price Index (CPI) inflation rose to 2.2 in Q4 2025 and is expected to edge up slightly (2.3) in the first quarter of 2026.
• After posting moderate growth of 0.7% in Q4, private investment is expected to recover by 3.5% in Q1 which is still very modest for this indicator.
• The Q4 2025 private sector job vacancy rate remained unchanged at 2.8%, representing 387,600 unfilled positions.
• A special analysis this quarter focusing on B2B and B2C businesses found that while all firms have become much less optimistic since Q1 2025, B2C businesses have recovered faster. Weak demand, shortages of skilled labour and distribution constraints affect B2B firms more, while limited physical space is impacting more the B2C firms.
• The sectoral profile on business dynamics reveals that business exits have outnumbered entries for more than one year now. Most sectors are seeing more exits than entries, with the ratio being worse in transportation, wholesale, and finance and insurance. Few sectors have ratios consistently positive except these past quarters (e.g. hospitality, professional services), and only the health and education sector is bucking the current negative trend.
Conclusions by CFIB’s chief economist and vice-president of research, Simon Gaudreault:
• Despite a turbulent 2025, Canada’s economy remains relatively resilient. Total inflation is close to Bank of Canada’s target, but inflation dynamics ultimately depend on the ongoing geopolitical tensions and global trade uncertainty.
• Private investment declined by 1.2% year on year, and it’s encouraging to see it slightly rebounding. Small businesses are adapting to the new trade reality. If uncertainty eases, private investment would recover even further, but we need bold policy changes. That includes reducing taxes and red tape and removing internal trade barriers.
• Our analysis on business dynamics paints a troubling picture. Canada’s economic pulse depends on a healthy private sector. We can’t keep losing businesses without new ones entering the market. This is a wake-up call for policymakers to create a stronger and more competitive economic environment.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
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 appeco.ca/en.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 100,000 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 cfib.ca.