According to the 4th annual Small Business Confidence Index from Zensurance, Canada’s leading small business insurance provider, confidence among Canadian small business owners has taken a steep dive this year, with just 58% expressing optimism about the rest of 2025 – a 10-point drop from 2024.
The national survey of more than 1,000 small business owners and independent professionals reveals an increasingly fragile economic outlook, driven by relentless inflation and surging operating costs.
The survey was released on Tuesday.
Danish Yusuf
“This year’s index sends a clear warning: Canadian small business confidence is eroding,” said Danish Yusuf, CEO and Founder of Zensurance. “Entrepreneurs are telling us they’re struggling to keep up with rising costs, shifting markets, and policy shocks – all while trying to stay afloat in a tougher-than-ever economy.”
Key Findings:
- Only 58% of small business owners feel confident about the year ahead – down from 69.9% last year.
- 62% say the state of the economy is negatively impacting their business, citing rising costs and weaker demand.
- Just 3.7% report soaring revenues, an 81% year-over-year decline, while 51.5% say they’re simply ‘holding steady,’ a 130% year-over-year increase
- Nearly half of respondents (43.2%) say rising operational costs are now their no. 1 challenge – well ahead of any other issue, including:
- 34.5% says economic slowdowns or growing economic uncertainty
- 22.4% cite shrinking profit margins;
- Nearly 4 in 10 (38.9%) are actively exploring new markets to offset these challenges
- The survey also reveals a 24.2% decline in the number of small businesses carrying insurance
“We’re seeing a growing number of businesses choosing to go without coverage – not because they want to, but because they feel they have no choice,” said Yusuf. “That leaves them dangerously exposed at a time when the risk of disruption is higher than ever.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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