Small business confidence reached 64.8 index points in February, sitting above the 60‑point mark for the first time since May 2022, finds the latest Monthly Business Barometer® by the Canadian Federation of Independent Business (CFIB) conducted at the beginning of the 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.
“While long-term optimism was higher this month, it doesn’t tell the full story. The February reading masks the overall trend of sluggish optimism,” said Andreea Bourgeois, director of economics at CFIB. “Canada is facing an entrepreneurial drought, with more businesses exiting the market than entering in the latest five quarters of data. We need bold policies that will make Canada’s entrepreneurial landscape stronger and more competitive. That includes reducing taxes and internal trade barriers.”
Confidence levels among almost all provinces hovered just above or around their historical averages, while most sectors saw gains in their 12-month outlook, said the CFIB.
Insufficient demand pressure eased, with 49% of small firms reporting it this month compared to 54% in January, but it remains the top growth barrier sitting well above its historical average. Wage costs (58%), insurance costs (58%), and tax and regulatory costs (58%) were the top constraints in February, it said.
The average price increase plans dropped to 2.2%, while the average wage plans increased to 2.3%. Nearly one in five (19%) businesses were planning to hire in the next few months, while 13% were considering layoffs, added the CFIB.
The CFIB is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region.
“While there’s still a great deal of uncertainty, especially since the recent announcement of the 10% global tariff, many small firms are feeling more optimistic heading into the spring. However, we’re not out of the woods yet as cost pressures remain. We’ve heard from business owners that the tax burden is too demanding, equipment costs are too high, or that the lack of accessible funding for small firms is discouraging. As governments across Canada deliver budgets, they need to make small business their top priority,” said Laure-Anna Bomal, CFIB economist.
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