Confidence among Canada’s small businesses fell sharply in September, dragged down by rising fuel costs and renewed uncertainty over tariffs, according to the latest Monthly Business Barometer from the Canadian Federation of Independent Business (CFIB).
The long-term optimism index dropped nearly 10 points to 47.9, slipping below the 50-point threshold that separates optimism from pessimism on a 0-to-100 scale. An index reading below 50 means more business owners expect their performance to weaken over the coming year than expect it to improve. CFIB said the index has been trending downward since July 2026, with businesses that trade internationally reporting lower optimism than those operating solely in domestic markets.
“The renewed tariff uncertainty, along with rising gas and oil prices, are keeping small business confidence in check. That’s a tough environment to plan in whether you’re hiring, investing, or just trying to keep prices steady for customers,” said Andreea Bourgeois, CFIB’s director of economics.
Price Plans and Inflation Concerns
Alongside the drop in confidence, businesses’ pricing plans jumped in September, with firms indicating they plan average price increases of 3.3%, up from 2.6% in August.
Simon Gaudreault, CFIB’s chief economist and vice-president of research, said the combination of trade tensions and elevated oil prices could filter through to broader inflation. “The Bank of Canada has held interest rates steady this year, but the persistent trade war and high oil prices could push inflation through the broader economy. The odds of a rate hike before Christmas are higher than they were,” Gaudreault said.
CFIB reported that nearly all provinces and business sectors saw declines in long-term optimism this month, pointing to a broad-based rather than localized slowdown in sentiment.
What’s Weighing on Small Firms
Fuel costs were the most commonly cited cost pressure, creating difficulties for 62% of small businesses surveyed. Tax and regulatory costs followed at 61%, while wage costs affected 60% of firms.
On the growth side, weak demand remained the top constraint, cited by nearly half of small businesses at 49%, while a shortage of skilled labour continued to hold back 41% of firms.
Small Business Confidence Indicators, September 2026
The September findings are based on 581 responses from a stratified random sample of CFIB members, collected between September 10 and 16 through a controlled-access web survey. CFIB said the results are statistically accurate to within plus or minus 4.1 percentage points, 19 times out of 20. The organization noted that each month’s full data series is recalculated for the prior month as additional survey responses come in.
CFIB describes itself as Canada’s largest association of small and medium-sized businesses, representing 103,000 members across the country.
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