Bank of Canada Survey Reveals Businesses Diversifying Trade

Article content A small but growing share of Canadian businesses has increased sales to markets outside the United States in response to trade tensions that continue to weigh heavily on sales and staffing decisions, according to the Bank of Canada. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others. Daily content from Financial Times, the world's leading global business publication. Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. Daily puzzles, including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others. Daily content from Financial Times, the world's leading global business publication. Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. Daily puzzles, including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Sign In or Create an Account Email Address or Article content In its fourth-quarter survey of business sentiment, the central bank said most firms expect export growth to be modest, with layoffs more likely than new hires for more than half the businesses surveyed. Article content We apologize, but this video has failed to load. Try refreshing your browser, or tap here to see other videos from our team. Back to video Article content Article content “With demand expected to remain soft, the majority of businesses plan to maintain or decrease current staffing levels,” the survey said. Article content One-third of businesses surveyed reported a decline in sales volume over the past 12 months, above the historical average of one-quarter of firms. In the fourth-quarter survey, more than 52 per cent of exporters said their sales to the U.S. had decreased, a slight dip from the previous quarter with a greater share reporting slight rather than significant declines. Article content Despite falling sales to the U.S. for many Canadian businesses, firms cited barriers to diversification, such as the need for specialized equipment, additional regulatory compliance and transportation costs. However, some exporters already active in non-U.S. markets have increased their focus there, leading to higher sales, the fourth-quarter survey found. Nearly nine per cent of exporters said they had slightly increased sales to non-U.S. markets, up from 1.2 per cent in the third-quarter survey. Article content Overall sentiment remained subdued as 2025 drew to a close. However, the survey found that businesses were less pessimistic than in the second quarter of the year when firms were digesting escalating tariff threats from the administration of U.S. President Donald Trump. Article content Article content “Businesses continue to cite uncertainty surrounding financial, economic and political conditions, slowing demand, and cost pressures as their most pressing concerns,” the survey said, adding that while tariff-related cost increases continued to affect businesses in the fourth quarter, they reported fewer such pressures than in the preceding three-month period. Article content Read More Article content There were a few positive signs in the survey results, among them a finding that a greater number of firms see improved indicators than those that see deteriorated ones. In addition, the share of firms planning or budgeting for a recession in Canada over the next 12 months eased to 22 per cent from 33 per cent, the lowest level reported in 2025. Article content “While businesses continue to report negative effects — some coming directly from tariffs but even more coming indirectly from trade tensions — they do not expect these effects to worsen further,” the Bank of Canada said.