Small business long-term confidence started the year just shy of its historical average, sitting at 59.5 in January, finds the latest Monthly Business Barometer by the Canadian Federation of Independent Business (CFIB).
CFIB is Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region. 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.
“We live in uncertain times, but small businesses are resilient and adapting to the new reality. When we asked them to describe their 2026 expectations in one word, the most common responses were ‘growth’ and ‘sales.’ Others included ‘challenging’, ‘same’ and ‘steady’,” said Simon Gaudreault, CFIB chief economist and vice-president of research. “Canada’s economic situation is far from rosy and many challenges persist, but small firms are entering the new year cautiously optimistic.”
Confidence levels across provinces were mixed. Almost all sectors increased their long-term optimism, and some are getting closer or at their historical average. Average wage and price plans remained steady in January, at 2.1% and 2.6%, respectively, said the CFIB.
More businesses reported struggling with tax and regulatory costs (70%), followed by insurance (69%) and wage costs (62%). A record share of small firms (40%) said capital equipment and technology costs were causing cost constraints, it said.
Weak demand continues to be the top growth limitation for over half (54%) of small firms. This indicator has been at or near record levels for roughly two years now. Hiring plans turned net positive for the first time since August 2025, with 15% of small firms looking to hire and 10% planning to lay off staff in the next few months, added the national organization.
“Heading into 2026, small businesses are hopeful, but it’s clear they need a stable environment to turn that optimism into growth. Creating favourable conditions for business investment will be key to boosting Canada’s productivity and stimulating entrepreneurship,” said Andreea Bourgeois, CFIB director of economics.
Here is what CFIB members are saying:
- “At this time, we anticipate no major increases or decreases in our business—remaining relatively steady. Rising costs – especially for equipment – have also been a challenge. Earlier this year, we were forced to purchase a new printer sooner than planned to avoid an additional $7,000 due to tariffs.” – Retail business owner, Alberta.
- “2025 was a downturn for us but 2026 is looking like we will get back on track with a good amount of work already pre-sold.” – Construction business owner, Ontario.
- “As a small business the government overreach for taxes are horrendous. The added tariffs in our own country are impeding growth.” – Retail business owner, New Brunswick.
- “Overall, we have a positive forecast across the board. The one unknown factor of concern is the rollout of AI and how that will affect our clients’ needs and our operational processes.” – Professional services business, Quebec.
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