May 2026 Results
Key takeaways
- Small business long-term optimism dropped significantly in May, falling below the 50-point threshold;
- Short-term optimism also declined sharply, dipping under 50;
- Concern over fuel costs tops the list of main cost constraints;
- Price increase plans remain above 3% for a second consecutive month.
Small business optimism in Canada
CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, fell to 46.3—a decrease of about 12 points from April. The short-term optimism index, based on a 3-month outlook, also declined, dropping about 7 points to 47.9, signaling a significant deterioration .
Provincial picture
All provincial indices display a downwards pattern over both time horizons. The four largest provincial economies are clustered in the middle with levels around the 50mark. Saskatchewan and New Brunswick small businesses are particularly less confident, both recording optimism levels below 50 over the long- and short-term.
Sectoral overview
Long‑term confidence by industry decreased overall, with some sectors seeing significant drops in optimism e.g. retail, hospitality, and health and education. Business in hospitality and agriculture are the least optimistic for the next year and over the next 3-4 months, with index levels in the 40s.
State of business health
The balance of opinion on the current state of business health dropped slightly and it is below the historical average for the third consecutive month.
Inflation indicators
The average price increase remained elevated above 3% in May, marking the second month in a row at such high levels. The average wage increase remained virtually unchanged at 2.4%. For more details about small firms' price and wage increase plans, click here.
Other indicators
Full-time staffing plans remain weak, with a higher share of employers planning to lay off staff (16%) than to hire (14%). This marks the first month of 2026 with negative net staffing intentions, following several months of a net positive balance.
Insufficient demand remains the top limitation on business and production expansion, cited by 53% of SMEs—about 15 percentage points above its historical average and worsening compared to the recent months.
Cost‑related pressures continue to weigh heavily on growth prospects, led by fuel costs (72%), tax and regulatory expenses costs (64%), insurance costs (60%), and wage costs (60%). Fuel costs remain high amid ongoing geopolitical tensions. Product input and raw material costs, as well as capital and technology costs, also remain significant constraints, with 44% and 38% of SMEs respectively reporting them as major constraints.
Methodology
These results are based on 563 responses received from May 5 to 12 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 4.1 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. Accordingly, April results were recalculated to include 9 additional responses beyond the 317 originally used.
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.
Since February 2026, the survey includes two new data points on shipping and receiving costs; and on shortages of equipment and technology. Provincial and sectoral details are not available yet.
As of April 2026, our industry codes align fully with NAICS, resulting in slight composition changes in agriculture, natural resources, transportation, and health and education. Questions? Contact us directly.
More details
Regional data about business optimism, price plans, limitations and cost constraints:
The Business Barometer, 2025 Retrospective.
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