Canadian businesses more optimistic in first quarter: Statistics Canada

While cost pressures, labour challenges and tariff impacts remain present for many businesses, expectations have shifted modestly compared to late 2025. Photo by Peter J. Thompson/National Post files

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Canadian companies entered 2026 continuing to navigate cost- and labour-related obstacles, but with a greater sense of optimism, according to a new report from Statistics Canada.

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The agency’s latest Canadian Survey on Business Conditions, released Friday, covers the first quarter of 2026 and gathers information from businesses on the current economic environment and their expectations of the conditions moving forward.

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The report said that Canadian businesses have a more positive outlook than in previous quarters, with about 73 per cent of respondents saying they are either very or somewhat optimistic about their prospects for the next year, compared to about 66 per cent from the third and fourth quarters of 2025.

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StatsCan said the optimism could be attributed in part to a smaller percentage of businesses expecting cost-related obstacles, such as inflation and interest rates, compared to the final quarter of 2025.

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Meanwhile, 13 per cent of businesses said they had an increase in Canadian sales in the 12 months prior to the survey, led by those in manufacturing, retail and wholesale trade. Roughly 16 per cent of businesses reported changing their marketing methods to further promote Canadian products.

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While Statistics Canada says cost-related obstacles may be easing for more companies, roughly 27 per cent of Canadian businesses had to pass cost increases onto customers in 2025 due to tariffs imposed by the United States.

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Thirty-two per cent of respondents reported a negative impact on their business in the past year due to the imposed tariffs, with manufacturing, agriculture, forestry, fishing, hunting and wholesale trade being the most affected sectors.

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Overall revenue from 2025 compared to 2024 was roughly split three ways, as 32.3 per cent of businesses reported higher revenues, 37.2 per cent of businesses reported stagnating revenues and 30.6 per cent report lower revenues.

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The first quarter results indicate that while cost pressures, labour challenges and tariff impacts remain present for many businesses, expectations have shifted modestly compared to late 2025.

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