Soft market demand and government policy making have got Canadian executives on edge
Canadian business executives are an anxious lot, according to the latest findings of the Conference Board of Canada’s Index of Business Confidence. Only once in the study’s 11-year history has the result been this poor — the first quarter of 2020, as Covid took hold.
The index fell 1.5 points to 63, relative to the 2014 baseline score of 100. It has been on the wrong side of 80 for more than three years now. The most recent survey was in field June 23 to July 11.
“It’s a very uncertain environment,” said Jake Lenarduzzi, senior economist, economic forecasting at the Conference Board of Canada in an interview. “Business leaders, with respect to investment at least, are taking a risk-averse approach.”
U.S. President Donald Trump announced on July 10 that he would raise the tariffs charged on a range of Canadian goods from 25% to 35% — a move that took effect Friday. Given that this news hit on the second-to-last day of polling, the index may be even lower if respondents were surveyed today.
The erosion of executive confidence predates Trump’s inauguration, but he’s clearly got business leaders rattled. The index fell from 74.5 in December 2024 to 64.5 in March 2025.
“Since Trump’s presidency came into effect, there haven’t been a lot of positives,” Lenarduzzi said.
Respondents highlighted two keep-them-up-at-night worries: government policies and poor market demand. Greater than 40% of business leaders noted both in their survey answers.
The former reflects more than the risk-off environment prompted by the White House’s aggressive trade negotiations. The Conference Board’s report highlighted Middle East conflicts and weakening economic forecasts in multiple markets.
“This uncertainty has also spilled into commodity markets central to Canada’s resource sector, where oil and agricultural prices have shown marked volatility in recent months,” the report read.
What’s striking about this precipitous fall in confidence is that this is not a group known for catastrophizing. Since its launch 11 years ago, the survey has reflected the sure-footed, generally optimistic nature common among those occupying Canada’s executive suites.
In the fall of 2009, less than a year into the Great Recession, the index came in at 97.8. The Canadian Press reported at the time that “63% of business leaders surveyed said they expect the economy to improve over the next half-year, as opposed to only 7% who thought it will deteriorate.”
The outlook now? About 46% told pollsters that the economy will weaken in the next six months. Just 15% are projecting improvement.
Seven in 10 respondents — nearly 69% according to the report — said their company is operating below capacity. More than half (54.4%) said it’s a bad time to invest in new facilities. And just 15.2% of firms projected an increase in profitability in the months ahead. That’s a new record low, according to the report.
“We’re not at the point yet where we’re ready to see some kind of sustainable recovery,” Lenarduzzi said.
