Despite persistent inflation and rising tariff threats, most Canadian businesses were relatively optimistic heading into the latest trade conflict, according to the latest survey of business conditions by Statistics Canada.
The survey, which predates the latest trade spat with the U.S. administration that intensified in mid-August, found that 72.6% of businesses said that they are “very” or “somewhat” optimistic about their outlook for the next 12 months. This was up from the second quarter (66.8%), and in line with the first quarter reading (72.3%).
The optimism came against the backdrop of three straight months of GDP growth and rising employment, but also stronger inflation readings, the national statistical agency noted.
Rising input costs had most businesses (59.8%) expecting to face cost-related obstacles over the next three months, although that was down from the second quarter (64.3%). And, 41.6% said that they expect inflation to represent a headwind in the next three months.
The survey, which was carried out from July 2 to Aug. 6, also found that 32.2% said they expected U.S. tariffs on Canadian exports to have a negative impact on their business in the next 12 months. Almost half (46.9%) said they expected no impact, 19.8% were unsure and 1% expected a positive impact, the agency said.
Additionally, the research found that while Canadian businesses are increasingly planning to use AI tools in the next 12 months, most companies still have no plans to use AI.
Statistics Canada reported that just over half (52.7%) have no plans to deploy the technology — primarily because they don’t see an application for AI in their industry (79.1%), followed by privacy and security concerns (10.8%) and a lack of knowledge about AI (9.9%).