Correction notice
On March 18, 2026, the survey weights applied across all Canadian Survey on Business Conditions tables for the fourth quarter of 2025 were corrected. As a result, many data points have been updated. However, some values remained unchanged. Consequently, updates were made to affected data points throughout this article to reflect the corrected values.
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Introduction
Small businesses contribute to a large portion of the Canadian economy in terms of prevalence and employment. As of 2023, businesses with 1 to 19 employees represent 91.1% of all employer
Between October and early November 2025, Statistics Canada conducted the Canadian Survey on Business Conditions, which provides a better understanding of the differences businesses face based on their relative sizes. Based on the survey results, smaller businesses were less likely to expect labour-related challenges, were more likely to be impacted by interest rates and were less negatively affected by Canadian and U.S. tariffs.
Smaller businesses are less likely to expect employment to increase and less likely to expect employment obstacles
Differences between smaller and larger businesses can be observed when looking at expected hiring intentions. Less than one-tenth (6.6%) of businesses with 1 to 19 employees expect their number of employees to increase over the next three months. By contrast, 13.1% of businesses with 20 to 99 employees and 17.1% of businesses with 100 or more employees expect their number of employees to increase over the next three months.
| Increase | Stay about the same | Decrease | |
|---|---|---|---|
| percent of businesses | |||
| Note: The results in this table are based on the survey that was in collection from October 1 to November 5, 2025, and respondents were asked what their expectations would be over the next three-month period. As a result, those three months could range from October 1, 2025 to February 5, 2026, depending on when the business responded.
Source: Statistics Canada, Canadian Survey on Business Conditions, fourth quarter of 2025 (table 33-10-1059-01). |
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| All employment sizes | 7.6 | 83.3 | 9.1 |
| 1 to 19 employees | 6.6 | 84.3 | 9.1 |
| 20 to 99 employees | 13.1 | 78.1 | 8.8 |
| 100 or more employees | 17.1 | 71.5 | 11.5 |
In addition to employment expectations, vacancies are also an important factor to consider in understanding labour-related challenges businesses expect to face. Over the next three months, 2.6% of businesses with 1 to 19 employees expect an increase in their vacant positions. By contrast, 8.6% of businesses with 20 to 99 employees and 7.7% of businesses with 100 or more employees expect an increase in their vacant positions.
Businesses of different sizes expect to encounter varying levels of labour-related challenges over the next three
Expected obstacles differ by size of business
The most common obstacles expected over the next three months by businesses with 1 to 19 employees were inflation (41.3%), cost of insurance (27.9%), cost of inputs (25.6%), recruiting skilled employees (23.5%), and fluctuations in consumer demand (23.4%). While recruitment of skilled labour and inflation are commonly expected obstacles across all business sizes, smaller businesses with 1 to 19 employees are less likely than larger businesses to expect recruiting skilled employees to be an obstacle. Meanwhile, inflation is more often expected to be an obstacle by businesses with 1 to 19 employees and 20 to 99 employees than by those with 100 or more employees (Table 2).
| 1 to 19 employees | 20 to 99 employees | 100 or more employees | All employment sizes | |
|---|---|---|---|---|
| percent of businesses | ||||
| Note: The results in this table are based on the survey that was in collection from October 1 to November 5, 2025, and respondents were asked what their expectations would be over the next three-month period. As a result, those three months could range from October 1, 2025 to February 5, 2026, depending on when the business responded.
Source: Statistics Canada, Canadian Survey on Business Conditions, fourth quarter of 2025 (table 33-10-1060-01). |
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| Inflation | 41.3 | 41.6 | 37.6 | 41.3 |
| Cost of insurance | 27.9 | 18.1 | 10.5 | 26.4 |
| Cost of inputs | 25.6 | 28.1 | 32.4 | 26.1 |
| Recruiting skilled employees | 23.5 | 42.4 | 43.0 | 26.1 |
| Fluctuations in consumer demand | 23.4 | 24.0 | 18.7 | 23.4 |
| Retaining skilled employees | 16.4 | 33.0 | 29.9 | 18.6 |
| Shortage of labour force | 15.6 | 23.6 | 20.6 | 16.6 |
Negative impacts of tariffs vary slightly between business sizes
Both Canada and the United States imposed tariffs on a wide range of products. Businesses were asked the level of impact tariffs had over the last 12 months regardless of whether they exported goods to or imported goods from the United States. Over one-third of businesses with 1 to 19 employees (35.9%) and 20 to 99 employees (36.9%) reported that U.S. tariffs on goods sold by businesses in Canada had a negative impact on their business. By contrast, over two-fifths (44.9%) of businesses with 100 or more employees reported the same.
The proportion of businesses by size that experienced a negative impact from Canadian tariffs on goods purchased from the U.S. varies, with a greater proportion of larger businesses reporting a negative impact. Over one-third (35.1%) of businesses with 1 to 19 employees reported a negative impact from Canadian tariffs on U.S. goods, while over two-fifths (41.2%) of businesses with 20 to 99 employees and nearly half (49.0%) of businesses with 100 or more employees reported the same.
Businesses with 1 to 19 employees more likely to report a high impact from interest rates
Interest rates affect smaller and larger businesses in different ways, from borrowing costs to investment strategies. Businesses with 1 to 19 employees were more likely than larger businesses to report that interest rates had a high impact over the past 12 months, with 15.6% reporting a high impact. Meanwhile, 21.5% reported a medium impact, 24.7% reported a low impact and 25.2% experienced no impact. By contrast, 9.5% of businesses with 20 to 99 employees and 11.9% of businesses with 100 or more employees reported that interest rates had a high impact.
| High impact | Medium impact | Low impact | No impact | Unknown | |
|---|---|---|---|---|---|
| percent of businesses | |||||
| Note: The results in this table are based on the survey that was in collection from October 1 to November 5, 2025, and respondents were asked what the business or organization experienced in the last 12-month period. As a result, those 12 months could range from October 1, 2024 to November 5, 2025, depending on when the business responded.
Source: Statistics Canada, Canadian Survey on Business Conditions, fourth quarter of 2025 (table 33-10-1088-01). |
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| All employment sizes | 14.8 | 22.5 | 25.0 | 23.8 | 13.9 |
| 1 to 19 employees | 15.6 | 21.5 | 24.7 | 25.2 | 13.1 |
| 20 to 99 employees | 9.5 | 31.0 | 26.8 | 15.3 | 17.3 |
| 100 or more employees | 11.9 | 18.0 | 26.4 | 13.6 | 30.1 |
Smaller businesses are less optimistic overall
Despite the challenges posed by a turbulent and unpredictable economy, nearly two-thirds (63.6%) of businesses with 1 to 19 employees reported having an optimistic outlook over the next 12 months. By contrast, the majority of businesses with 20 to 99 employees (80.0%) and 100 or more employees (78.3%) report having an optimistic outlook for the next 12 months.
| Very optimistic | Somewhat optimistic | Somewhat pessimistic | Very pessimistic | Unknown | |
|---|---|---|---|---|---|
| percent of businesses | |||||
| Note: The results in this table are based on the survey that was in collection from October 1 to November 5, 2025, and respondents were asked what their expectations would be over the next 12-month period. As a result, those 12 months could range from October 1, 2025, to November 5, 2026, depending on when the business responded.
Source: Statistics Canada, Canadian Survey on Business Conditions, fourth quarter of 2025 (table 33-10-1094-01). |
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| All employment sizes | 20.5 | 45.3 | 17.2 | 4.8 | 12.2 |
| 1 to 19 employees | 19.2 | 44.4 | 18.1 | 5.3 | 12.9 |
| 20 to 99 employees | 28.0 | 52.0 | 11.4 | 1.3 | 7.3 |
| 100 or more employees | 32.1 | 46.2 | 11.5 | 0.9 | 9.3 |
Methodology
From October 1 to November 5, 2025, representatives from businesses across Canada were invited to complete an online questionnaire about business conditions and business expectations moving forward. The Canadian Survey on Business Conditions uses a stratified random sample of business establishments with employees classified by geography, industry sector and size. Proportions are estimated using calibrated weights to calculate the population totals in the domains of interest. The total sample size for this iteration of the survey is 20,838 and results are based on responses from a total of 9,129 businesses or organizations.
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