Toronto, January 30, 2025 – The long-term small business confidence has lost ground for the second month in a row, finds the January 2025 Monthly Business Barometer® by the Canadian Federation of Independent Business (CFIB). This indicator sat at 54.6 index points in January after a loss of 2 points, bringing the total drop to 5 points since November.
Confidence among exporting small businesses fell significantly since this November (-8.1 points). Optimism among importing SMEs also dropped several points (-3.3 points).
“The threat of upcoming U.S. tariffs and political changes in Canada have installed a lot of fog in front of the windshield. Our economy is already paying the price of this lack of direction. The uncertainty is making it harder for businesses to plan ahead and make critical decisions, such as hiring or investment,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
Businesses in retail (+6.9 points since December), health and education (+5.3) and hospitality (+1.5) were among the few registering an increase in long-term confidence in January. Most sectors remained below their historical optimism levels.
“The jury is still out on the final impact of the GST/HST tax holiday on involved firms. We will see in the next few weeks how they experience the last stretch of the tax holiday. This includes of course a repeat of the administrative challenges and costs they had to face during the implementation rush, but this time merely to go back to business as usual,” said Andreea Bourgeois, Director of Economics at CFIB.
Across all sectors, nearly record high shares of businesses reported struggling with low demand (52%) and taxes/regulations (70%).
“The various barriers to domestic trade, ill-timed tax increases and our epic red tape have been strangling Canada’s entrepreneurs for far too long, so it’s not surprising that Canada has entered this critical period in such a weak position. With U.S. tariffs that could be coming our way this weekend, in the short term we need to rapidly send business owners a signal they will be supported, while ensuring in the longer term they are in a better position to diversify their markets, innovate and grow. A good place for governments to start would be to reduce red tape, to roll back taxes including on capital gains and carbon, and to remove well-known internal trade barriers,” concluded Gaudreault.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
Public.affairs@cfib.ca
Methodology
January Business Barometer®: January findings are based on 1,037 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflects responses received from January 7 to 14. Findings are statistically accurate to +/- 3.0 per cent, 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.