A new Statistics Canada survey finds more than a third of businesses expect US tariffs to hurt operations, even as overall optimism holds above 70 per cent
Canadian businesses are feeling the squeeze from US tariffs and persistent inflation, but most are holding the line on their outlook, according to a quarterly survey released by Statistics Canada.
The Canadian Survey on Business Conditions for Q3 2026 found that 32.2 per cent of businesses expect American tariffs on Canadian imports to negatively affect their operations over the next 12 months.
Manufacturers are feeling the pressure most acutely with 49.7 per cent of those in the sector flagging tariffs as a concern, followed by transportation and warehousing at 47.3 per cent and wholesale trade at 45.1 per cent.
Despite those headwinds, overall sentiment remains cautiously positive. Nearly three-quarters of respondents (72.6 per cent ) reported optimism about their 12-month outlook, even as the share expecting near-term sales growth slipped to 14.5 per cent, down from 19.4 per cent in Q2.
Cost pressures remained the dominant operational concern. Just under 60 per cent of businesses anticipate cost-related obstacles in the coming quarter, though that figure has eased from 64.3 per cent three months earlier.
Inflation was singled out by 41.6 per cent of respondents as the most commonly expected obstacle, with businesses in accommodation and food services (58.3 per cent), construction (51.8 per cent) and manufacturing (48.7 per cent) most exposed.
Average hourly wages rose 2.8 per cent year-over-year in July, according to Statistics Canada, adding to cost pressures for employers already navigating higher input costs.
Clients in trade-exposed sectors may need help stress-testing cash flow projections, particularly as 30.4 per cent of businesses said they plan to pass future tariff-related cost increases on to customers, a potential inflationary signal. Another 27.4 per cent had already done so over the prior 12 months.
On the labour side, 25.2 per cent of businesses expect difficulty recruiting skilled workers in the months ahead, with manufacturers (38.2 per cent), accommodation and food services (33.6 per cent), and health care and social assistance (31.7 per cent) among the most challenged sectors.
Tight labour markets have broader implications for wage inflation and, in turn, household spending power, a variable closely watched by advisors tracking the Bank of Canada's rate path.
What the AI surge means for business clients
One of the survey's more notable findings was a sharp jump in planned artificial intelligence adoption.
One in four businesses said they intend to use AI tools within the next 12 months, up from just 14.5 per cent in Q3 2025. Despite this surge, 52.7 per cent of businesses have no current plans to adopt AI, and among non-adopters, 79.1 per cent believe AI is simply not relevant to their operations.
For advisors with entrepreneurial clients, the data underscores a growing divide between early adopters and the broader business community — one that could translate into competitive and productivity gaps over time.
Cybersecurity risk rounded out the survey's concerns. Some 2.7 per cent of businesses reported theft of sensitive data in the past 12 months. Among those affected, 67.2 per cent experienced unauthorised system access and more than half saw cybersecurity costs climb as a result.
Carney convenes business leaders amid trade uncertainty
The survey landed the same day Prime Minister Mark Carney gathered executives from 23 major Canadian companies including RBC, Enbridge, CN Rail, Bombardier, Suncor, Bell Canada and Nutrien, to discuss the ongoing Canada-US trade file, according to a statement from the Prime Minister's Office.
Discussions covered "recent developments on the file and the government's priorities to spur economic growth and investment in Canada," with industry representatives sharing perspectives from their respective sectors.
The meeting followed the appointment of Dominic Barton as chair of Invest in Canada.
The convergence of government trade diplomacy and deteriorating business confidence surveys will be closely watched by advisors and portfolio managers tracking Canada's economic resilience amid tariff-driven uncertainty.
Some analysts have cautioned that sustained trade disruption could tip the economy toward contraction; concerns flagged earlier this year when GDP's rebound gave the Bank of Canada room to hold rates steady but that window may narrow if business investment slows.
Statistics Canada noted this was the final iteration of the Canadian Survey on Business Conditions.
