The Canadian GDP is expected to rebound in Q2 and Q3 of 2026, finds the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB).
“Given higher oil and gas prices and Canada’s position as a major producer and exporter of energy, GDP is expected to post stronger growth in Q2 and Q3. However, while rising energy prices are lifting GDP, they’re also driving up costs on Main Street. There’s a need for greater cost-of-doing-business relief and measures to help small business owners manage the ongoing challenges,” said CFIB’s chief economist and vice-president of research, Simon Gaudreault.
“Economic uncertainty is weighing on business plans, leading small firms to scale back or postpone investment, hiring, and expansion plans.”
The CFIB is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region.
Key highlights of the Q2 2026 edition of the Main Street Quarterly report
- CFIB’s estimates and forecasts, developed in partnership with AppEco, suggest Canada’s GDP is expected to grow by 2.7% and 1.6% in Q2 and Q3, respectively. Consumer Price Index (CPI) inflation rose to 3.1% year over year in Q2 and is forecasted to edge up to 3.4% in Q3.
- Private investment plans remain weak and are expected to drop sharply by 6.3% in Q2.
- The In Focus section this quarter shows that 38% of SMEs now report capital equipment and technology costs as a challenge, up sharply since the pandemic. Rising machinery, equipment and technology prices, compounded by tariffs, a weaker Canadian dollar and economic uncertainty, are placing additional pressure on businesses seeking to replace and upgrade their assets.
- With the U.S. deciding not to renew CUSMA, about 35% of Canadian SMEs surveyed in early July report it’s too soon to determine the impact on their business plans, highlighting the uncertainty surrounding the review process. Most small firms (64%) say Ottawa should take the time needed to secure a stronger deal rather than rush an agreement. More Canadian SMEs are also diversifying their trade beyond the U.S., but interprovincial trade barriers remain a major hurdle for firms expanding into domestic markets.
- A new section on business entries and exits shows that, following Statistics Canada’s recent data revisions, business exits have now outpaced entries for three quarters in a row. This marks the first sustained period of net business losses since the pandemic. Saskatchewan and Quebec are the only provinces with a hint of positive net new entries, with the health and education sectors adding the lion’s share of new businesses.
- The Q2 2026 private sector job vacancy rate remained stable at 2.8%, representing 393,000 unfilled positions.
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