Canadian Survey on Business Conditions, first quarter 2026
Released: 2026-02-27
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 first quarter of 2026, the proportion of businesses with a positive outlook has increased compared with previous quarters.
Real gross domestic product was essentially unchanged in November 2025, following a 0.3% decline in October. Meanwhile, consumer inflation rose 2.3% on a year-over-year basis in January 2026, following a 2.4% increase in December 2025. Furthermore, in January 2026, overall employment edged down (-25,000; -0.1%) and the employment rate decreased 0.1 percentage points to 60.8%.
In this macroeconomic context, Statistics Canada conducted the Canadian Survey on Business Conditions from January to February 2026. The survey collects information on the environment businesses are currently operating in and their expectations moving forward.
Cost-related obstacles ease
In the first quarter of 2026, 58.9% (correction) of businesses across Canada expect cost-related obstacles over the next three months, down from 61.5% (correction) in the fourth quarter of 2025. 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 January 2026, prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index, increased by 7.7% month over month and rose 8.0% year over year. Additionally, average hourly wages among employees were up 3.3% on a year-over-year basis in January, following growth of 3.4% in December 2025.
Within this environment, in the first quarter of 2026, just over two-fifths (40.6% [correction]) of businesses expect inflation to be an obstacle over the next three months, marking it as the most commonly expected obstacle among businesses. Businesses expecting inflation to be an obstacle were most frequently found in accommodation and food services (60.0% [correction]); agriculture, forestry, fishing and hunting (50.3% [correction]); and wholesale trade (47.6% [correction]).
Recruiting skilled employees is the second most commonly expected obstacle, anticipated by one-quarter (24.8% [correction]) of businesses, led by those in administrative and support, waste management and remediation services (38.5% [correction]); construction (35.9% [correction]); and accommodation and food services (33.1% [correction]).
When asked to identify the most challenging expected obstacle over the next three months, 10.5% (correction) of businesses expected it to be recruiting skilled employees, 10.4% (correction) indicated inflation and 6.7% (correction) reported the cost of inputs.
Nearly one-third of businesses report a negative impact from tariffs imposed by the United States on imports from Canada over the 12 months prior to the survey
Nearly one-third (32.2% [correction]) of all businesses, whether they engaged in trade or not, reported that the imposition of tariffs by the United States on imports from Canada had a negative impact on their business over the 12 months prior to the survey. Businesses in manufacturing (50.6% [correction]); agriculture, forestry, fishing and hunting (46.6% [correction]); and wholesale trade (44.6% [correction]) were most likely to indicate this. In contrast, 1.5% (correction) of businesses reported that these tariffs had a positive impact on their business over the 12 months prior to the survey. Meanwhile, over half (50.9% [correction]) indicated that the imposition of tariffs by the United States on imports from Canada had no impact on their business over the 12 months prior to the survey. A further 15.5% (correction) of businesses were unsure what impact tariffs imposed by the United States had on their business.
Over one-quarter of businesses passed cost increases due to tariffs onto customers over the 12 months prior to the survey
In the first quarter of 2026, all businesses were asked whether they had passed cost increases due to tariffs onto their customers over the 12 months prior to the survey, whether they engaged in trade or not. Over one-quarter (26.1% [correction]) of businesses reported having done so, while over one-third (34.9% [correction]) had not passed any cost increases onto their customers. Meanwhile, nearly two-fifths (39.0% [correction]) of businesses had not experienced any cost increases due to tariffs.
At the same time, slightly over one-third (33.4% [correction]) 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. In contrast, 14.3% (correction) were either very unlikely or somewhat unlikely to do the same, and 15.2% (correction) were unsure. Over one-third (37.1% [correction]) of 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 first quarter of 2026, 15.9% (correction) of businesses indicated they had changed their marketing practices over the 12 months prior to the survey to promote Canadian products, led by those in retail trade (41.6% [correction]), accommodation and food services (30.9% [correction]) and manufacturing (27.6% [correction]).
Over the 12 months prior to the survey, 12.4% (correction) of businesses experienced an increase in sales of their Canadian products, with businesses in retail trade (27.6% [correction]), manufacturing (23.2% [correction]) and wholesale trade (20.9% [correction]) being most likely to see an increase in sales. In contrast, 7 in 10 (71.0% [correction]) businesses did not experience an increase in sales of their Canadian products over the 12 months prior to the survey, and a further 16.6% (correction) were unsure.
Nearly one-third of businesses report higher revenues in 2025 compared with 2024
Nearly one-third (31.8% [correction]) of businesses reported that their revenues were higher in 2025 than in 2024, with an average revenue increase of 18.6% (correction) in 2025. Businesses most likely to report higher revenues were in arts, entertainment and recreation (45.3% [correction]), information and cultural industries (40.9%), and finance and insurance (39.5% [correction]).
Meanwhile, nearly two-fifths (37.0% [correction]) of businesses indicated that their revenues were the same in 2025 as they were in 2024. A further 31.2% (correction) of businesses reported lower revenues in 2025 compared to 2024, with an average revenue decrease of 25.8% (correction) in 2025. Businesses most likely to have had lower revenues were in transportation and warehousing (47.5% [correction]), mining, quarrying, and oil and gas extraction (41.2% [correction]), and accommodation and food services (40.2% [correction]).
Business optimism improved compared with previous quarters
In the first quarter of 2026, nearly three-quarters (72.3% [correction]) of businesses are either very or somewhat optimistic about their outlook over the next 12 months, higher than the proportions of businesses that reported the same in the third (66.7%) and fourth (65.8% [correction]) quarters of 2025.
Meanwhile, in the first quarter of 2026, nearly one-fifth (17.9% [correction]) of businesses expect their sales of goods or services to increase over the next three months, a slight increase from 16.0% (correction) in the fourth quarter of 2025. In the first quarter of 2026, 15.0% (correction) of businesses expect sales of their goods or services to decrease, while 23.4% (correction) 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 (35.5% [correction]), retail trade (30.8% [correction]) and manufacturing (29.1% [correction]).
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 January 2 to February 6, 2026, and respondents were asked about their expectations for the next three months. As a result, this three-month period could range from January 2 to May 6, 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.
Please note that the final collection cycle of the Canadian Survey on Business Conditions will take place in summer 2026, with the last release scheduled for August 2026. Statistics Canada wishes to thank Canadian businesses for their participation in the survey since 2020. To learn how the agency is adapting to continue delivering quality data Canadians rely on, visit Delivering trusted data through change.
Correction note
On March 18, 2026, the survey weights applied across all Canadian Survey on Business Conditions tables for the first quarter of 2026 were corrected. As a result, many data points throughout this release and the integrated table have been updated to reflect the corrected values.
Products
The infographic "Business conditions in Canada, first quarter of 2026," 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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