Canadian small business confidence declines amid tariff uncertainty

New research from the Canadian Federation of Independent Business (CFIB) indicates a decline in small business confidence. According to the report, 22% of small businesses describe their current condition as “weak” or “critical.”

Optimism indices have trended downward, with both long-term and short-term optimism falling 10 points in September. The CFIB attributes this decline to several factors, including rising energy prices and renewed uncertainty surrounding tariffs. Specifically, the report notes that U.S. President Donald Trump imposed tariffs on nearly $28 billion worth of Canadian goods in August, prompting retaliatory measures from Ottawa. Additionally, upcoming bans on certain Canadian liquor and dairy imports are contributing to the instability.

Small business owners cited high costs, economic uncertainty, heavy tax burdens, and regulatory pressures as primary obstacles. In response to these challenges, the CFIB is urging the Canadian federal government to implement tax relief measures, such as reducing the small business tax rate from 9% to 6% and increasing the small business deduction threshold.