Canadian Survey on Business Conditions, fourth quarter 2025
Released: 2025-11-25
Businesses continue to anticipate a variety of obstacles over the next three months (see Note to readers). While pressures of both cost- and labour-related obstacles continued into the fourth quarter of 2025, the proportion of businesses with a positive outlook remained comparable with previous quarters.
Real gross domestic product contracted 0.3% in August, offsetting most of July's 0.3% expansion, and consumer inflation rose 2.2% on a year-over-year basis in October, down from a 2.4% increase in September. Meanwhile, overall employment increased by 67,000 (+0.3%) and the unemployment rate declined 0.2 percentage points to 6.9% in October.
In this macroeconomic context, Statistics Canada conducted the Canadian Survey on Business Conditions from October to November 2025. The survey collects information on the environment businesses are currently operating in and their expectations moving forward.
Cost-related obstacles remain steady
In the fourth quarter, 61.2% of businesses across Canada expect cost-related obstacles over the next three months, similar to 62.2% in the third quarter. For the Canadian Survey on Business Conditions, cost-related obstacles consist of inflation; cost of inputs; interest rates and debt costs; cost of insurance; cost of real estate, leasing or property taxes; and transportation costs. In October, prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index, increased 1.6% month over month and grew 5.8% year over year. Additionally, average hourly wages among employees increased 3.5% on a year-over-year basis in October, following growth of 3.3% in September.
Within this environment, over two-fifths (41.1%) of businesses expect inflation to be an obstacle over the next three months. Businesses expecting inflation to be an obstacle were primarily in accommodation and food services (60.2%), transportation and warehousing (49.3%) and retail trade (45.8%).
Recruiting skilled employees is the second most expected obstacle, anticipated by over one-quarter (26.4%) of businesses. It is most commonly expected by businesses in retail trade (35.4%), accommodation and food services (34.8%), and construction (33.2%).
When asked to identify the most challenging expected obstacle over the next three months, 10.4% of businesses expected it to be inflation, 10.4% indicated recruiting skilled employees and 7.0% reported the cost of inputs.
Impact of interest rates on businesses
The Bank of Canada lowered its overnight lending rate to 2.25% in October 2025, down from 3.75% in October 2024. Nearly one-quarter (22.9%) of businesses indicated in the fourth quarter of 2025 that they expect interest rates and debt costs to be an obstacle over the next three months, down slightly from 24.8% in the third quarter of 2025 and 26.4% in the second quarter of 2025. When asked about the impact of interest rates on the business over the 12 months prior to the survey, 37.5% of businesses reported a medium or high impact, while 48.5% reported a low or no impact. The level of impact reported by businesses has shifted from the fourth quarter of 2024, when 48.1% of businesses reported a medium or high impact, and 39.1% reported a low or no impact.
Nearly two-fifths of businesses plan to pass cost increases due to tariffs onto customers over the next 12 months
In the fourth quarter of 2025, nearly two-fifths (39.9%) of businesses reported that they were either very likely or somewhat likely to pass cost increases due to tariffs onto their customers over the next 12 months. Meanwhile, 13.6% were either very unlikely or somewhat unlikely to do the same, and 15.2% were unsure. Nearly one-third (31.4%) businesses did not expect any cost increases due to tariffs over the next 12 months.
Over 1 in 10 businesses experienced an increase in sales of Canadian products
In the fourth quarter of 2025, one-fifth (20.0%) of businesses indicated they had changed their marketing practices over the previous six months to promote Canadian products, led by those in retail trade (50.5%), accommodation and food services (33.1%) and manufacturing (27.4%).
Over the previous six months, 13.3% of businesses experienced an increase in sales of their Canadian products, with businesses in retail trade (30.3%), manufacturing (22.2%) and wholesale trade (22.1%) being most likely to see an increase in sales. Comparatively, over two-thirds (68.2%) of businesses did not experience an increase in sales of their Canadian products over the previous six months, and a further 18.5% were unsure.
Business optimism remains similar to previous quarters
In the fourth quarter of 2025, nearly two-thirds (66.3%) of businesses are very or somewhat optimistic about their outlook over the next 12 months, similar to the levels reported in the second (70.0%) and third (66.7%) quarters of 2025.
Meanwhile, 16.3% of businesses expect their sales of goods or services to increase over the next three months, a slight increase from 13.8% in the third quarter of 2025. At the same time, 20.8% of businesses expect sales of their goods or services to decrease while 21.8% of businesses anticipate the selling price of their goods or services to increase. Businesses most likely to expect their selling prices to increase over the next three months are those in accommodation and food services (35.6%), manufacturing (32.6%) and wholesale trade (30.4%).
Vast majority of businesses expect their average wages to increase or stay the same over the next 12 months
Nearly two-fifths (39.3%) of businesses expect their average wages to increase over the next 12 months, led by businesses in manufacturing (48.6%), accommodation and food services (46.9%), and retail trade (46.3%).
Among businesses that expect their average wages to increase over the next 12 months, 17.0% expect the rate of increase to be slower than last year, while 60.5% expect it to be similar, and 15.3% expect it to be faster.
The top reasons businesses expect an increase in average wages over the next 12 months include the current rate of inflation (58.7%) and in order to retain talent (49.1%). Following these, other reasons businesses expect an increase in their average wages over the next 12 months are the expected rate of inflation (31.1%), minimum wage legislation (25.4%), the capacity to attract labour (25.2%), and labour market tightness (23.6%).
Meanwhile, over two-fifths (44.5%) of all businesses expect their average wages to stay the same over the next 12 months, and 5.0% of all businesses expect their average wages to decrease.
Bilingualism among employees in Canada
In the fourth quarter of 2025, 14.6% of businesses in Canada required at least one employee to be bilingual in English and French, while 4.3% required all employees to be bilingual. Meanwhile, 43.0% of businesses in Quebec and 26.8% of businesses in New Brunswick required at least one employee to be bilingual.
Note to readers
Data from the Canadian Survey on Business Conditions are now available. The tables provide data at the national, provincial and territorial levels by industrial sector, employment size, type of business and majority ownership. Data are also available upon request for the 20 largest cities in Canada.
Results from this survey are applicable to employer businesses in Canada. This survey is conducted quarterly to collect information from businesses in Canada more efficiently and rapidly compared with traditional methods.
The most recent survey was conducted from October 1 to November 5, 2025, and respondents were asked about their expectations for the next three months. As a result, this three-month period could range from October 1, 2025, to February 5, 2026, depending on when the business responded.
Statistics Canada would like to thank Canadians who took the time to complete this survey, enabling a better understanding of Canadian businesses.
Products
The infographic "Business Conditions in Canada, fourth quarter of 2025," part of the series Statistics Canada—Infographics (11-627-M), is now available.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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