CFIB forecasts recession narrowly avoided in second half of 2023; pressures due to job vacancies are easing off but remain acute in Q3

Toronto, October 20, 2023 – The Canadian economy is expected to avoid a recession in Q3-Q4 2023, according to the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB).

Key highlights:

  • CFIB's forecasts developed in partnership with AppEco show the Canadian economy is expected to post weak growth in Q3 2023 (0.3%) and rebound slightly in Q4 2023 (1.4%). 
  • Consumer Price Index (CPI) inflation, both total and excluding food and energy, is expected to see a bit of an uptick in Q3, and to recede in Q4. It will remain slightly above the Bank of Canada’s inflation-control target range of 1 to 3 per cent.
  • The national job vacancy rate continued its downward trend, with a slight decrease to 4.2% in Q3. This represents 594,900 unfilled positions.
  • Statistics Canada and CFIB data show steep increases in commercial rent. Among businesses paying rent, 51% were handed rent increases of 6% or more in the past 12 months. Of these, one-third (33%) considered moving, while another 7% actually relocated the business.
  • A special look at retail businesses reveals their optimism is lower than the rest of the economy. Retailers selling big ticket items appear even less confident, are more likely to be stuck with unsold inventories and be affected by slowing demand.

Conclusions by CFIB’s chief economist and vice-president of research Simon Gaudreault:

  • Inflation continues to be top of mind for small businesses and consumers alike. Should inflation stick around 3%, it is not impossible that the Bank of Canada will want to step in and hike rates one more time. However, many indicators point to a marked slowdown and the full effect of previous hikes has yet to completely materialize in the economy, calling for patience.

  • Small businesses will likely welcome the slight decrease in the job vacancy rate with modest relief. A lower vacancy rate should help soften the labor market, as employers post fewer vacancies and overall employment grows.  There are still close to 600,000 positions vacant in the private sector, way more than in the pre-pandemic period, so we have only gone from an extremely bad to a very bad situation for now.

  • Many small businesses, for example in retail, are counting on the holiday shopping season to make up for lost revenues and address their accumulated debt. But the costs of doing business, such as wages, rent or financing, remain prohibitive. Their recovery will remain sluggish if there’s no relief in sight, especially with the various tax increases and the looming Canada Emergency Business Account (CEBA) repayment deadline.

Read the full Main Street Quarterly here.

For media enquiries or interviews, please contact:
Milena Stanoeva, 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