Léger Poll Reveals Uncertainty Among Canadian Businesses

Chloe Fitzgerald

4 min read

Post on May 14, 2025

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Key Findings: Economic Outlook and Business Confidence

The Léger poll paints a picture of cautious optimism, with a significant portion of Canadian businesses expressing uncertainty about the economic outlook. While some businesses remain optimistic, a considerable number harbor pessimistic views, highlighting the prevailing uncertainty within the Canadian business community. For example, the poll revealed that only 35% of businesses felt confident about the next 12 months, a significant drop from previous years. This sentiment is driven by several key concerns:

• Inflation and Rising Costs: Soaring inflation is a major concern, eroding profit margins and forcing businesses to raise prices, potentially impacting consumer demand. Many businesses are struggling to manage escalating costs for raw materials, energy, and transportation.

• Supply Chain Disruptions: Ongoing disruptions to global supply chains continue to create bottlenecks and delays, impacting production schedules and increasing costs. The lack of reliable access to necessary inputs remains a significant challenge.

• Labour Shortages: The persistent labour shortage across various sectors is hindering business growth and productivity. Businesses struggle to find and retain qualified employees, leading to increased recruitment costs and operational challenges.

• Interest Rate Hikes: The Bank of Canada's interest rate hikes, while intended to curb inflation, are increasing borrowing costs for businesses, making investments more expensive and potentially slowing down expansion plans.

Investment Plans: A Cautious Approach Among Canadian Businesses

The Léger poll indicates a cautious approach to investment among Canadian businesses in the coming year. Many businesses are delaying or scaling back their investment plans due to the prevailing economic uncertainty. Compared to previous years, there's a noticeable decrease in planned investments across various sectors. This trend is particularly evident in:

• Capital Expenditures (machinery, equipment): Businesses are hesitant to invest in new machinery and equipment due to high costs and uncertainty about future demand.

• Hiring and Expansion: The labour shortage and economic uncertainty are leading many businesses to postpone hiring and expansion plans. This could have long-term consequences for job creation and economic growth.

• Research and Development (R&D) Investment: Investment in R&D, crucial for long-term innovation and competitiveness, is also being impacted, with businesses prioritizing short-term cost-cutting measures over long-term growth strategies.

Impact on Different Sectors: Varying Levels of Uncertainty

The Léger poll reveals that the impact of economic uncertainty varies across different sectors of the Canadian economy. While all sectors are affected to some degree, some are facing more significant challenges than others:

• Manufacturing: The manufacturing sector is particularly vulnerable to rising raw material costs and supply chain disruptions, impacting production and profitability.

• Retail: Retail businesses are facing challenges related to consumer spending, with consumers becoming more price-sensitive amid high inflation. This is impacting sales and revenue growth.

• Technology: The technology sector is experiencing some concerns about securing funding in the current economic climate, as well as increased competition.

Government Policies and Business Response: Seeking Support and Stability

The Léger poll also explored how Canadian businesses perceive government policies and their impact on economic uncertainty. Many businesses expressed a need for greater government support and stability. Their requests for assistance include:

• Tax policies and incentives: Businesses are seeking tax breaks and incentives to stimulate investment and encourage growth.

• Support for small and medium-sized enterprises (SMEs): SMEs, the backbone of the Canadian economy, are particularly vulnerable to economic shocks and require targeted government support.

• Regulations and compliance: Businesses are calling for simpler and more streamlined regulations to reduce compliance costs and administrative burdens.

Conclusion: Navigating Uncertainty: The Future of Canadian Businesses

The Léger poll clearly reveals a significant level of uncertainty among Canadian businesses. Concerns regarding inflation, supply chain issues, labour shortages, and interest rate hikes are impacting investment plans and overall business confidence. The varying impacts across different sectors highlight the need for tailored support measures. The future of Canadian businesses hinges on navigating this uncertainty effectively. To do so, it's crucial to stay informed about the latest Léger polls and other relevant economic data. For further guidance and resources, explore government websites dedicated to supporting Canadian businesses and consult with financial advisors specializing in navigating economic uncertainty. Understanding the insights provided by the Léger poll is a crucial first step in building resilience and ensuring the long-term health of the Canadian economy.