FX.co ★ Canada Small Business Sentiment Improves in July

In July 2025, Canada’s CFIB Business Barometer long-term index saw an increase of 3.4 points, reaching 50.9. This marks the highest point since January and represents the second instance this year that the index has surpassed the 50-point threshold, indicating optimism. Although small business confidence is on the rise, it hovers around the equilibrium where the number of business owners with positive outlooks equals those with negative ones. Notably, confidence has improved among exporters (45.4 versus 36.8 previously), importers (43.3 compared to 37.6), and businesses focused on the domestic market (48.3 over 43.4). However, entities involved in international trade remain more cautious. Sentiment varies across sectors, with health and education showing the most optimism (55.6), while agriculture and finance display the least (both at 39.0). Six sectors recorded optimism indices above 50, presenting a mixed outlook. The labor market remains sluggish, with more businesses planning to reduce staff rather than hire. Challenges such as insufficient demand, high uncertainty, and trade barriers continue to dampen sentiment, though easing labor shortages contribute to a declining hiring drive. The short-term index experienced a slight increase, moving up 1.3 points to 49.3.