Small businesses confidence plunged nearly 10 points in September, falling to 47.9, according to the latest Monthly Business Barometer by the Canadian Federation of Independent Business (CFIB).
“The renewed tariff uncertainty, along with rising gas and oil prices, are keeping small business confidence in check. That’s a tough environment to plan in whether you’re hiring, investing, or just trying to keep prices steady for customers,” said Andreea Bourgeois, CFIB director of economics.
Measured on a scale between 0 and 100, an index below 50 means owners expecting their business’s performance to be weaker over the next three or 12 months outnumber those expecting stronger performance, said Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region.
The CFIB said the long-term optimism index fell below the 50-point threshold and has been trending down since July 2026. Firms trading internationally show lower levels of optimism than businesses active only on the Canadian markets.
It said price plans spiked in September, averaging 3.3%, up sharply from 2.6% in August.
“The Bank of Canada has held interest rates steady this year, but the persistent trade war and high oil prices could push inflation through the broader economy. The odds of a rate hike before Christmas are higher than they were,” said Simon Gaudreault, CFIB chief economist and vice-president of research.
The CFIB said nearly all provinces and sectors posted a drop in the long-term optimism. The main cost pressures facing small firms this month were fuel costs, causing difficulties for 62% of small firms, followed by tax and regulatory costs (61%), and wage costs (60%).
Weak demand remained the leading growth constraint for nearly half (49%) of small businesses, while shortage of skilled labour persisted for 41% of small firms, it noted.
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