Canadian companies entered 2026 continuing to navigate cost- and labour-related obstacles, but with a greater sense of optimism, according to a new report from

Statistics Canada

.

The agency’s latest Canadian Survey on Business Conditions, released Friday, asked businesses about operating in the current economic environment and about their expectations for the first quarter of 2026 and beyond.

The survey was conducted from January 2 to February 6, against a backdrop of stalled GDP growth, rising inflation and lower employment. Despite the macroeconomic conditions and a number of other cost and operational challenges cited in the survey, a higher percentage of businesses reported having a positive outlook about the next 12 months than did in previous quarters.

Approximately 73 per cent of respondents said they are either very or somewhat optimistic about their prospects for the year, compared to about 66 per cent in the third and fourth quarters of 2025.

StatsCan said the optimism was likely in part attributable to a smaller percentage of businesses expecting cost-related obstacles, such as

inflation

and

interest rates

, compared to the final quarter of 2025.

Meanwhile, 13 per cent of businesses said they had an increase in Canadian sales in the 12 months prior to the survey, led by companies in manufacturing, retail and wholesale

trade

. Roughly 16 per cent of businesses reported changing their marketing methods to further promote Canadian products.

The report said cost-related obstacles may be easing for more companies, with 59 per cent reporting they expect such pressures in the quarter, compared to 61 per cent in the last quarter of 2025. Statistics Canada identifies cost-related obstacles as those relating to inputs, inflation, interest rates and debt servicing, insurance, real estate and transportation.

The most commonly cited obstacle anticipated by businesses this quarter was inflation, as indicated by nearly 41 per cent of respondents, while finding skilled employees was second, at 25 per cent.

Thirty-two per cent of respondents reported that

tariffs

imposed by the United States had a negative impact on their business in the past year, with manufacturing, agriculture, forestry, fishing, hunting and wholesale trade being the most affected sectors. Roughly 27 per cent of businesses said they had to pass tariff-related cost increases onto customers in 2025.

Overall revenue from 2025 compared to 2024 was roughly split three ways, as 32.3 per cent of businesses reported higher revenues, 37.2 per cent of businesses reported stagnating revenues and 30.6 per cent report lower revenues.

The first quarter results indicate that while cost pressures, labour challenges and tariff impacts remain present for many businesses, expectations have shifted modestly compared to late 2025.

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