FX.co ★ Canada Small Business Sentiment Rises in May

In May 2025, Canada's CFIB Business Barometer, which gauges the 12-month outlook of small businesses, rose by 5.2 points to 40.0, marking a three-month peak following April's reading of 34.8. Despite this uptick, the index is still significantly below the 50-point threshold that indicates optimism. Ongoing uncertainties concerning US-Canada trade relations and the continuing impact of tariffs are affecting small businesses involved in international trade. Expectations showed a slight increase for both exporters (26.4 from 25.3) and importers (28.9 from 28.0). Domestic businesses reported a marginally better outlook, although they too remain below the optimistic benchmark at 34.2 points. The labor market sentiment is subdued, with only 14% of firms planning to hire, while 16% anticipate layoffs. Additionally, the short-term index, reflecting three-month expectations, rose to 42.4 in May, up from 40.1 in April.