Small business owners across Canada entered the fall in a distinctly gloomier mood than they started the summer, and the numbers behind that shift tell a story about tariffs, energy costs and a level of uncertainty that shows no sign of lifting. According to a report from the Canadian Federation of Independent Business, confidence among small business owners fell sharply in September, with the group’s monthly barometer showing its steepest monthly decline in months, driven by what CFIB says is a combination of renewed tariff pressure from the United States and rising oil and gas prices.
The Numbers Behind the Slide
CFIB’s monthly business barometer tracks two headline measures: a long-term optimism index and a short-term optimism index, both scored on a scale of zero to 100. A reading above 50 means more business owners expect their performance to strengthen over the relevant period than expect it to weaken; a reading below 50 means the opposite. In September, both measures fell by 10 points. The long-term optimism index dropped to 47.9, while the short-term index fell to 43.3 — both now firmly below the 50-point threshold that would indicate more optimism than pessimism among the small business owners surveyed. CFIB says the long-term index has been trending lower since July, suggesting this isn’t a one-month blip but the continuation of a slide that began before the latest headlines.
Andreea Bourgeois, CFIB’s director of economics, points to two forces holding confidence in check: tariff uncertainty and rising energy prices. Those aren’t abstract concerns. In August, U.S. President Donald Trump imposed tariffs on nearly $28 billion worth of Canadian goods, and Ottawa answered with retaliatory tariffs of its own on American products. On top of that, Trump has ordered bans on imports of Canadian-made liquor and a handful of dairy products, a measure set to take effect Sept. 29 — meaning the pain small business owners are reporting in this survey may not even reflect the full impact of measures still working their way into force.
Tariffs, Energy, and the Squeeze on Main Street
What makes this month’s reading notable is the combination of pressures rather than any single shock. Small businesses have spent much of 2025 and 2026 absorbing the direct and indirect costs of an on-again, off-again trade war — higher input costs, supply chain disruption, and the sheer difficulty of planning inventory, pricing or hiring when the rules of cross-border commerce keep shifting. Layered on top of that is the added cost of energy, which touches nearly every small business regardless of sector, from a bakery’s delivery van to a manufacturer’s production line.
The elimination of the U.S. de minimis exemption — the threshold under which low-value shipments could cross the border duty-free — has added another layer of friction and cost for small exporters and cross-border retailers, according to CFIB’s Nova Scotia office. Combined with looming import bans on Canadian liquor and dairy products, the message from Washington to small business owners this fall has been one of escalating unpredictability rather than resolution.
A Regional Warning Sign: Nova Scotia’s Long Wait
The national picture is echoed, and in some ways foreshadowed, by what CFIB has been documenting at the provincial level. Ahead of the fall sitting of the Nova Scotia Legislature, CFIB’s Director of Legislative Affairs in the province, Duncan Robertson, said small business confidence there has simply not recovered since trade tensions began early in 2025. “The business environment over the past year has been turbulent and unpredictable,” Robertson said, citing tariffs, supply chain disruptions, and a tourism season disrupted by wildfires and construction. He’s calling on all parties in the legislature to work together to give small businesses some certainty.
A central frustration in Nova Scotia is the province’s own response. In its most recent budget, the Nova Scotia government set aside a $200 million contingency fund specifically to respond to U.S. tariffs and their impact on the province. Seven months after that fund was introduced, Robertson says small businesses still don’t know when it will be deployed, how they can apply, or what criteria will determine who gets money. “Now is not the time for a rainy-day fund; small businesses could use these funds now,” he said, arguing that the elimination of the de minimis exemption makes the need for clarity even more urgent.
CFIB’s Nova Scotia data comes from its Monthly Business Barometer survey of 367 responses collected between Aug. 5 and 12 from a stratified random sample of CFIB members, with a stated margin of error of plus or minus 5.1 percentage points, 19 times out of 20 — a regional snapshot that lines up with the deteriorating national trend CFIB reported for September.
Construction, Contingency Funds, and the Cost of Growth
Tariffs and energy prices aren’t the only pressures small business owners are naming. CFIB’s separate research, a report titled Hard Hats and Hard Times based on a survey conducted between May 16 and June 15, 2024 of 1,240 small businesses nationally, found that construction activity itself has become a meaningful drag on small business operations — and CFIB says concern about that impact has grown compared with a year earlier. Nationally, close to seven in 10 small businesses say they’ve been affected by construction projects near their operations, according to CFIB. In Nova Scotia specifically, Robertson says the problem has intensified during the warmer months, layering physical disruption on top of financial uncertainty.
Robertson frames this as an equity issue as much as an economic one: growth and infrastructure investment are generally positive for a province, he argues, but small businesses have disproportionately borne the disruption costs of that growth without corresponding compensation. CFIB’s ask is for provincial governments to work with municipalities to establish formal construction mitigation funds — a concrete, if narrow, policy lever compared with the broader macro forces of tariffs and energy prices that are harder for any single government to control.
Ottawa’s Response and the Limits of Relief
The federal government has not been entirely silent on the tariff front. Earlier this year, federal minister Mélanie Joly unveiled $1.5 billion in tariff relief measures after Trump escalated the trade war further, according to a Business in Vancouver report. But the CFIB data suggests that, at least as of September, whatever relief has been delivered hasn’t been enough to reverse the confidence slide — both the long-term and short-term optimism indices kept falling even after that relief package was announced, with the steepest drop yet recorded in the most recent monthly reading.
That gap between announced relief and business sentiment on the ground is the same dynamic Robertson describes in Nova Scotia with the province’s $200 million contingency fund: money has been earmarked, but without clear timelines or eligibility criteria, it does little to change how a small business owner plans their next quarter. Uncertainty, in other words, isn’t just about whether support exists — it’s about whether business owners can actually count on it when they’re making decisions today.
Our Take
We think the September numbers matter less as a single data point than as confirmation of a trend CFIB itself has flagged since July: small business confidence in Canada has been eroding steadily, not spiking downward in reaction to one headline. That distinction matters. A one-month dip might reflect a temporary shock that resolves itself; a multi-month slide with both long-term and short-term indices below 50 suggests business owners have stopped expecting resolution and started planning for a prolonged period of friction.
The layering of pressures is what makes this moment harder to read than a typical trade dispute. Tariffs on nearly $28 billion of Canadian goods, retaliatory measures from Ottawa, an incoming ban on Canadian liquor and dairy exports, the loss of the de minimis exemption, and rising energy costs are hitting small businesses simultaneously rather than sequentially — which helps explain why relief measures like Joly’s $1.5-billion package or Nova Scotia’s $200-million contingency fund haven’t yet shown up as a turnaround in sentiment. Money that is announced but not deployed, as Robertson’s comments about the seven-month wait in Nova Scotia illustrate, may do little to restore confidence among owners who need to make hiring, pricing and inventory decisions now.
The more interesting question, in our view, is what happens if this uncertainty becomes the baseline rather than the exception. Small businesses don’t have the balance sheets of larger exporters to absorb prolonged tariff volatility, and CFIB’s construction findings suggest that even domestic policy priorities like infrastructure growth are landing as costs rather than benefits for many of these owners. For Canadian consumers, a sustained pullback in small business confidence could eventually show up as slower hiring or price pass-through; for policymakers at both the federal and provincial level, the CFIB data is effectively a running scorecard on whether announced relief is actually translating into certainty on the ground. So far, by CFIB’s own measure, it isn’t.
This is a Commentary piece: analysis and editorial perspective from Canadian Business News, clearly distinguished above from the reported facts it’s based on. It is not financial, investment, or legal advice.
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