'One step forward, one step back' situation 'driving low business confidence,' finds survey
Business may be even slower in the coming months as the Canadian economy is expected to contract through the second and third quarters of 2025, according to the Canadian Federation of Independent Business (CFIB).
Economic forecasts based on the most recent monthly Business Barometer data indicate that GDP growth fell by 0.8% in Q2 2025 and is expected to decline further by 0.8% in Q3.
“This contraction reflects persistently low business confidence, driven by trade tensions and weakness in manufacturing, particularly in the transportation, machinery, and oil and gas sectors,” says CFIB in the report.
Supply chain challenges
Canada–U.S. trade tensions are causing high uncertainty and disrupting cross-border trade. Citing data from Statistics Canada (StatCan), CFIB reports that nearly half (48%) of businesses experienced supply chain disruptions over the past three months, and 64% expect conditions to worsen.
Between August 2024 and April 2025, the share of firms identifying supply chains as one of their top concerns increased from 17% to 28%.
Among small- and medium-sized enterprises (SMEs), uncertainty looms large, according to CFIB’s report.
Half (50%) of those sourcing from abroad and 44% sourcing within Canada do not know how long disruptions will persist.
While many Canadian companies are feeling the strain of tariffs imposed by U.S. President Donald Trump, some businesses in British Columbia are looking to stay afloat by adjusting their operations, according to a previous study.
Interprovincial trade popular idea
Many firms now see these challenges as structural rather than short-term. Among those who could offer a timeline, 27% (international) and 32% (domestic) expect disruptions to last a year or more.
One way to alleviate these pressures would be to improve interprovincial trade. Half of firms report that this would reduce the blow from U.S. trade-related impacts.
Recently, the federal government introduced a new Interim Policy on Reciprocal Procurement, a move aimed at shielding Canadian businesses and workers from unfair trade practices as Canada negotiates a new economic and security partnership with the United States.
Job vacancies across Canada
Amid the economic backdrop, Canada still has 397,500 job openings in the private sector, according to CFIB.
By total count, Ontario (141,100) and Quebec (98,700) lead the country among provinces. Year-over-year, Saskatchewan (-0.7), New Brunswick (-0.7), and British Columbia (-0.5) recorded the largest declines. Prince Edward Island (+0.9), Newfoundland and Labrador (+0.2), and Manitoba (+0.2) were the only provinces to experience a year-over-year increase.
Among industries, construction, retail, and professional services have the highest job opening counts. On a yearly basis, information, arts and recreation (-0.8), agriculture (-0.8), personal services (-0.6), and natural resources (-0.6) saw the biggest drops in their vacancy rates. Manufacturing was the only sector reporting an increase (+0.1).
The quarterly private sector job vacancy rate in Canada held steady at 2.8% in Q2 2025, down by 0.3 percentage points on a yearly basis.
Hiring plans among SMEs aren’t looking. While summer usually brings a hiring boost, more small businesses are thinking about layoffs (16% in July, up from 13% in June), according to CFIB.
