Toronto, May 22, 2025 – Long-term small business confidence is slowly regaining lost ground after crashing to historic lows in March. The 12-month indicator added 5.3 index points, reaching 40.0 in May, according to the latest Canadian Federation of Independent Business (CFIB)’s Monthly Business Barometer® survey.
“Now that the federal election is over, there may be clearer guidance and renewed leadership on tariffs and other federal matters, and this and a somewhat de-escalating trade war may explain in part why small business sentiment is trending in the right direction again. However, these are just timid beginnings of a rebound. The indicator is still well below its historical average,” said Simon Gaudreault, chief economist and vice-president of research at CFIB. “The optimism glass is not even half-full, it’s still fairly empty.”
Half of small business owners are concerned that the U.S.-Canada trade dispute will have an impact on the summer tourism season, with businesses in recreation and information, retail, and hospitality being most concerned.
Inflation pressure indicators have eased, with small businesses planning to raise prices by an average of 2.9%, down from 3.5% in April. Wage plans remained unchanged at 2.1%.
All provinces have their confidence levels below 50. Weak demand remains the top barrier to growth for 59% of businesses, while over two-thirds (68%) of firms are constrained by tax and regulatory costs. Hiring intentions are far below seasonal levels, with 14% of businesses looking to hire full-time in the next few months and 16% planning to lay off.
“Many small businesses are breathing a sigh of relief as it seems we’ve avoided the worst of tariffs. But there’s still lots of uncertainty around, putting long-term investments and business planning on hold,” said Andreea Bourgeois, CFIB’s director of economics.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
Methodology
May Business Barometer®: May findings are based on 719 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflects responses received from May 6 to 12. Findings are statistically accurate to +/- 3.7 per cent, 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month. 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
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.
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