Toronto, July 23, 2026 – Small business confidence rose to 58.3 points in July, finds the latest Monthly Business Barometer® by the Canadian Federation of Independent Business (CFIB). The survey was conducted from July 7 to 13, before the latest U.S. tariffs were announced.
“Although confidence had started to improve, renewed trade uncertainty can quickly undermine progress. With President Trump’s latest executive orders to hit Canada with 50% tariffs in a month, business sentiment will likely drop in August. Between seesawing fuel prices and renewed trade tensions, it’s a major challenge for businesses to plan ahead,” said Simon Gaudreault, CFIB chief economist and vice-president of research. “The last thing we want is for small business confidence to take a hit like it did in March 2025 when it cratered to an all-time low after the first round of tariffs was announced.”
While overall optimism improved, confidence among manufacturing businesses continued to lag behind at 53.7 index points. Manufacturing sector’s confidence hasn’t recovered since 2023 and has been hit harder by tariffs than by either the 2008-09 recession or the pandemic. Where 45% of small businesses nationally reported shipping and receiving costs as a constraint in July, that figure hit 63% among manufacturers, more than double the 29% recorded in February 2026. Input product costs were currently squeezing 77% of manufacturers, almost twice the usual share for this sector.
“This industry is in a very challenging spot. Optimism among manufacturing firms was showing timid signs of improvement, but still below its historical average and most likely would lose momentum going forward,” said Andreea Bourgeois, CFIB director of economics. “As some manufacturers are considering U.S. production, we need a more competitive fiscal environment here at home and policies that would encourage businesses to stay and invest in Canada.”
Fuel costs remained the top cost constraint affecting 60% of small firms across Canada, while shipping and receiving costs stayed elevated for 45% of businesses. Nearly four in ten (38%) firms reported struggling with capital equipment and technology costs, compared to a historical average of 23%.
Provincial outlooks were mixed, while most sectors saw small changes in optimism. The future price increase indicator was easing, with small firms planning to increase prices by an average of 2.7% over the next few months.
The share of businesses citing limited physical space as a factor restricting sales or production growth was trending down since November 2025, reaching 14% in July.
“It’s another indicator that small businesses were being careful with investment and expansion plans, as they were not sure about future demand,” Gaudreault added.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
Public.affairs@cfib.ca
Methodology
July Business Barometer®: July findings are based on 520 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from July 7 to 13. Findings are statistically accurate to +/- 4.3 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 above 50 means owners expecting their business’s performance to be stronger over the next three or 12 months outnumber those expecting weaker performance. An index level near 65 normally indicates that the economy is growing at its potential.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 103,000 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.