Small business confidence plummets for the third consecutive month: CFIB Business Barometer®

Toronto, ON (Mar. 7, 2025) – The long-term small business confidence declined for the third consecutive month, falling below 50 for the first time since April 2024 to 49.5 index points in February, finds the latest Business Barometer® by the Canadian Federation of Independent Business (CFIB).

Optimism among importing businesses dropped slightly since September (-5.6 points), while confidence among exporting small businesses fell significantly by 23.3 points.

“‘Canada got another tariff reprieve until early April, but the threat of tariffs kicking in after all is always in the back of the mind for many small business owners, affecting their long-term plans,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “Small firms operate on tight margins, and results from our special survey on the impact of U.S.-Canada tariffs released earlier this month show that a majority are not prepared for the impact should the tariffs hit.”

Confidence shrunk across the country, with trade dependent provinces, like Alberta (-3.6 points), British Columbia (-3.7), Manitoba (-3.4) and Ontario (-3.2) posting bigger decreases in optimism over the long term. Certain sectors that would be most affected by tariffs, such as manufacturing (48.6), wholesale (46.5) and transportation (52.3), were also at the bottom of the 12-month confidence scale.

Small businesses plan to raise prices by an average of 3.1%, the highest level since April 2024. The average wage increase plans decreased slightly to 2.2%.

Lack of demand remains the main barrier to growth for 54% of small businesses. The top cost constraints for small firms included tax/regulations (67%), insurance (67%) and wage costs (61%).

“Our special survey on tariffs shows that over half of exporters expect it will take them more than six months to adapt to new markets and stabilize their operations. The uncertainty, coupled with ongoing inflationary pressures, is weighing down on small businesses, dampening their long-term outlook,” said Andreea Bourgeois, CFIB’s director of economics.

Methodology

The findings are based on 526 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflects responses received from February 4 to 12. Findings are statistically accurate to +/-4.3%, 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. 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.

About CFIB

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

Source: Canadian Federation of Independent Business (CFIB)