In its latest survey, the Canadian Chamber of Commerce’s Business Data Lab (BDL) revealed that while short-term business sentiment in Canada dipped during the third quarter, long-term optimism reached its highest level in nearly three years.
The findings are part of the Canadian Survey on Business Conditions (CSBC) report, which tracks key business outlooks across the country.
According to Stephen Tapp, chief economist at the Canadian Chamber of Commerce, the third quarter marked the third consecutive rise in longer-term business optimism. "This is now the best showing for the 'year-ahead' outlook in nearly three years," Tapp said, highlighting the ongoing improvements in economic confidence despite some short-term challenges.
Businesses are increasingly optimistic about the future, driven by signs that interest rates are falling in developed markets and that the Bank of Canada is gaining ground in its fight against inflation. Tapp added that businesses expect a "soft landing" for the economy, with modest employment growth over the next few months.
However, the report also flagged ongoing concerns, particularly regarding fragile supply chains. Labour disputes within Canada’s transportation network—across rail, ports, and airlines—continue to pose risks. Exporters, in particular, are bracing for potential supply chain disruptions, as many expect obstacles to worsen soon.
The short-term business sentiment, meanwhile, saw a decline of 3.4 points in Q3, driven by weaker outlooks for both sales and employment. Nonetheless, the report revealed that cost pressures are easing, and businesses' pricing behaviour is beginning to normalize. Tapp suggested that if this trend continues, it could prompt the Bank of Canada to introduce more aggressive interest rate cuts to support the weak economy.
Regionally, businesses in Ontario and British Columbia expressed a more pessimistic view, especially in major cities like Toronto and Vancouver, where high housing prices, rising debt levels, and upcoming mortgage renewals dampen consumer spending. In contrast, businesses in Quebec and Atlantic Canada showed stronger optimism, as housing affordability remains less of a concern.
Indigenous-owned businesses emerged as particularly optimistic, showcasing a positive outlook for future business opportunities.