Business Insights Quarterly

Get detailed quarterly analysis of business conditions in Canada based on survey responses from over 15,000 Canadian employers.

 

Q2 2025

While the economy showed some resilience in early 2024, this quarter’s findings reveal that business optimism continues to erode, particularly among exporters.

Our economists and data scientists turn the responses from Statistics Canada’s quarterly survey of over 15,000 Canadian employers into relevant insights on business outlook, challenges and opportunities. Next edition coming Fall 2025.

Message from the business data lab

This edition of Business Insights Quarterly marks a pivotal moment for Canadian businesses, as rising trade tensions and persistent economic uncertainty converge to test their resilience. After stronger economic performance in Q1 2025, confidence has slipped again. Business sentiment deteriorated in Q2, driven by weakening consumer demand, escalating supply chain pressures and growing anxiety over Canada–U.S. trade relations.

 

Exporters — historically among the most optimistic Canadian businesses — are now sounding the alarm. Confidence within this group has dropped to its lowest level in years, driven by heightened policy uncertainty, rail and port disruptions, and the re-emergence of tariff threats.

 

Across firm sizes, mid- to large-sized businesses saw the steepest drop in sentiment. These companies — which employ a significant share of the Canadian workforce and anchor major supply chains — are increasingly exposed to both demand- and cost-side pressures.

 

After months of more stable inflation expectations, the share of businesses anticipating higher selling prices is climbing again. This shift suggests that external shocks — including tariffs and supply constraints — are increasingly filtering into cost structures and may soon show up at the consumer level.

 

While most firms have yet to take concrete action in response to tariff risks, some exporters are adjusting course. Many are proactively diversifying suppliers, building inventory buffers and expanding into non-U.S. markets. The sharp rise in USMCA preference utilization signals that businesses are also working harder to navigate compliance rules and minimize tariff exposure.

 

Despite the headwinds, Canadian businesses continue to demonstrate resilience. But they now face a more complex landscape — one defined by higher uncertainty, higher costs and rising trade friction. The need for smart, responsive planning and data-driven decision-making has never been greater.

 

The Business Data Lab (BDL) remains committed to providing businesses and policymakers with clear, timely insights that help them navigate today’s evolving economic terrain.

 

For more insights — including regional and sector-level trends — explore our interactive Business Insights Tracker on the BDL website.

Patrick Gill

Vice President, Business Data Lab, Canadian Chamber of Commerce

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