How are small businesses doing?

Operating a business continues to involve challenges, from rising costs to uncertainty surrounding the current trade environment. To better understand how businesses are navigating these pressures, the Canadian Survey on Business Conditions (CSBC) recently surveyed businesses about their current experiences and outlook.

Here’s what the latest key CSBC data tell us about small businesses (ranging from 1 to 99 employees), broken down by three ranges of employee counts.

When asked in the third quarter of 2026 about their most challenging obstacle over the next three months, answers differed by employee count.

For example, businesses with 5 to 19 (14.3%) and 20 to 99 (13.6%) employees were more than three times as likely as those with 1 to 4 employees (4.4%) to cite recruiting skilled employees as their most challenging obstacle.

In contrast, businesses with 1 to 4 employees (14.6%) cited inflation as their most challenging obstacle, while those with 5 to 19 (10.3%) and 20 to 99 (8.2%) employees were less likely to do so.

Businesses with 20 to 99 employees (10.9%) were more likely to cite the cost of inputs as their most challenging obstacle than those with 5 to 19 (7.6%) and 1 to 4 (6.1%) employees.

In the third quarter of 2026, over one-quarter (27.8%) of businesses with 1 to 4 employees said that US tariffs on imports of their goods would have either a major or minor negative impact in the next 12 months, while those with 5 to 19 employees (36.9%) and 20 to 99 employees (38.7%) were more likely to report the same anticipated impacts.

Similarly, slightly over one-quarter (26.2%) of businesses with 1 to 4 employees expected a major negative impact in the next 12 months from Canadian tariffs on goods purchased from businesses in the United States, while higher proportions of businesses with 5 to 19 (35.3%) and 20 to 99 (44.0%) employees expected the same.

Relatively smaller proportions of small businesses (ranging from 12.1% to 16.2%) expected positive impacts, whether major or minor, from the elimination of trade barriers between provinces or territories.

In the third quarter of 2026, a majority of small businesses with 1 to 4 (72.9%), 5 to 19 (67.1%) and 20 to 99 (69.6%) employees said their business was profitable in each of the past three years.

As well, most small businesses said their future outlook over the next 12 months was either very optimistic (ranging from 20.2% to 24.7%) or somewhat optimistic (ranging from 48.4% to 53.7%). 

The third week of October marks Small Business Week, an annual celebration of Canadian entrepreneurship. If you own or operate a business, our colleagues at Innovation, Science and Economic Development Canada offer a range of tools and resources on their Supports for business page.