Canada's economic resilience is being tested as business confidence continues to erode, according to the Canadian Chamber of Commerce's Business Data Lab (BDL) Q1 2026 Business Insights Quarterly (BIQ). The report highlights a concerning trend: businesses are increasingly focused on managing uncertainty rather than pursuing growth, ultimately slowing economic momentum. This shift comes as businesses navigate weaker demand, cautious consumer spending, and ongoing trade adjustments.
Patrick Gill, Vice President of the Canadian Chamber of Commerce's Business Data Lab, noted that while the Canadian economy appears stable on the surface, a deeper look reveals that businesses are reacting cautiously to an uncertain environment. The report, released May 5, 2026, indicates that business outlook has remained below neutral for seven consecutive quarters, with exporters showing particularly weakened confidence. This is happening a year after tariffs and disruptions began to reshape the economic landscape.
A key concern is that export growth beyond the U. S. is primarily driven by established exporters, rather than new firms entering global markets. Instead of exploring new markets or supply chains, many businesses are opting to raise prices or delay crucial decisions. This risk-averse approach is hindering overall economic expansion.
The BDL's findings also reveal a growing disparity between larger firms, which continue to hire and expand, and small to mid-sized businesses that are facing constraints. Rising costs, tariff threats, and policy uncertainty are creating a volatile landscape for Canadian businesses. These factors, coupled with the challenge of insufficient demand, are weighing heavily on business owners as ongoing trade uncertainty makes it hard to plan ahead. This underscores the need for policies that foster a more supportive environment for entrepreneurship and business growth across all sectors.
