CA BOC Business Outlook Survey

The Business Outlook Survey was conducted by in-person, video and phone interviews from May 1 to 21, 2026. The Business Leaders’ Pulse is conducted online every month; the latest results are from April, May and June 2026. This quarter’s publication also includes results from special consultations with business leaders and industry experts in the oil and gas sector. • Overall business sentiment has deteriorated after improving over the past three quarters. • Sales outlooks have softened slightly, reflecting a slowdown in business and consumer spending associated with rising fuel-related costs and heightened geopolitical uncertainty in the Middle East. • Firms’ export outlooks have improved. Fewer firms said trade uncertainty and hesitancy among US customers are constraining exports, and more firms reported strong demand for commodity exports. • Most firms did not report binding capacity constraints or labour shortages. Reports of difficulties sourcing critical inputs increased this quarter, but these were generally not viewed as limiting firms’ ability to meet demand. Canadian Survey of Consumer Expectations—Second Quarter of 2026 Consumers’ perceptions of current inflation and expectations for inflation over the next 12 months were little changed, while two-year-ahead expectations rose slightly (Chart 1, blue, yellow and green lines). Near-term expectations remain above levels seen before the start of trade tensions. Expectations for inflation over the next five years edged up after easing in recent quarters (Chart 1, red line). The share of consumers expecting inflation to be above 3% over the next 12 months increased slightly from last quarter (Chart 2, red and orange bars). Consumers continued to cite tariffs and trade tensions as the most important factor affecting inflation (Chart 3). In follow-up interviews, one respondent said, “Where I work, a lot of raw material is used. ... [Tariffs have raised] substantially the price of the item itself plus the cost to ship it, so we have to pass that cost on to our customers.” BoC Business Outlook Survey: Business Sentiment Weakens, Inflation Expectations Edge Higher BANK OF CANADA BUSINESS SENTIMENT INDEX -0.39 IN Q2 VS. -0.35 IN Q1, (REVISED FROM -0.36 PREVIOUSLY), -2.41 IN Q2 2025 #Canadaecon #canada #business #economy

The Business Outlook Survey (BOS) was conducted by in-person, video and phone interviews from February 5 to 25, 2026, before the war in the Middle East began. The Business Leaders’ Pulse is conducted online every month; the latest results are from January, February and March 2026. This quarter’s publication also incorporates results from follow-up calls with BOS participants conducted between March 18 and 27, after the start of the war in the Middle East, with firms selected based on their exposure to the economic effects of the war. These results are supplemented by targeted consultations with industry leaders in highly affected sectors. Canadian Survey of Consumer Expectations—First Quarter of 2026 The Canadian Survey of Consumer Expectations was conducted through an online panel from February 5 to 25, 2026, before the war in the Middle East began. Follow?up phone interviews took place from February 24 to March 2, 2026. This quarter’s publication incorporates results from a special survey, conducted between March 26 and April 2, 2026, on how the war in the Middle East is affecting consumers' views and behaviours. Overview • In the first quarter of 2026, before the war in the Middle East, consumers’ spending plans remained muted, held back by concerns about high prices and economic uncertainty. Still, consumers became less negative about their spending plans than in the previous quarter as downward pressure from trade tensions eased. BOC SURVEY SHOWS Q1 BUSINESS SERVICE INDICATOR AT -0.36, UP FROM -1.78 IN Q4 (NO CHANGE).

The Business Outlook Survey was conducted by in-person, video and phone interviews from November 6 to 26, 2025. The Business Leaders’ Pulse is conducted online every month; the latest results are from October, November and December 2025. This quarter’s publication also includes results from special consultations with business leaders and industry experts in the oil and gas sector. Overview • Business sentiment is subdued but remains above its survey low from the second quarter of 2025. • Firms reported that sales growth has been weak over the past year largely due to the economic effects of trade tensions. They expect sales growth to improve slightly going forward. • Export sales growth is expected to be modest. A small but increasing share of businesses reported higher sales to non-US markets in response to trade tensions with the United States. Canadian Survey of Consumer Expectations—Fourth Quarter of 2025 The Canadian Survey of Consumer Expectations was conducted through an online panel from October 30 to November 18, 2025. Follow?up phone interviews took place from November 21 to 27, 2025. Overview • Concerns over high prices and economic uncertainty related to the trade conflict continue to have a negative impact on consumers. • In this quarter’s survey, consumers perceived a higher likelihood of missing a debt payment and a slightly greater chance of losing their job. In this context, consumers reported weaker spending plans. Still, they perceive a greater chance than last quarter of finding a job or voluntarily leaving their job. BoC Overall Business Outlook Survey Q4: -1.8 (prev -2.3) - Business Outlook Future Sales: 13.00 (prev -2.00) Breaking | Bank of Canada’s Q4 business outlook survey indicates weakened sentiment and sluggish sales growth over the past year. BoC Survey: 22% of firms expect Canada to be in a recession over the next year, down from 33% in Q3.

The Business Outlook Survey was conducted by in-person, video and phone interviews from August 7 to September 3, 2025. The large majority of interviews were conducted before the announcement of the removal of certain Canadian counter-tariffs. The Business Leaders’ Pulse is conducted online every month; the latest results are from July, August and September 2025. This quarter’s publication also includes results from Governing Council outreach as well as special consultations with businesses and industry organizations in trade-sensitive sectors. Overview • Firms’ outlooks and intentions remain subdued despite a gradual improvement in sentiment and a slight easing of perceived uncertainty. Expectations for growth in domestic and export sales remain soft due to concerns about the broad economic effects of trade tensions. Canadian Survey of Consumer Expectations—Third Quarter of 2025 The Canadian Survey of Consumer Expectations was conducted through an online panel from July 31 to August 21, 2025. The survey took place before the Canadian government announced it would remove some counter-tariffs. Follow-up phone interviews took place from August 22 to 28, 2025. Overview • Tariffs and trade tensions continue to affect consumers’ spending plans and perceptions about their financial health. Many survey respondents expressed a desire to prioritize spending on Canadian goods and vacations in Canada. • Consumers saw a further deterioration in the labour market in the third quarter, driven in part by a sharp drop in job-finding prospects for public sector workers. • Consumers continue to think tariffs will generate inflationary pressures. Expectations for short-term inflation remain above their pre-pandemic averages, and expectations for longer-term inflation have picked up again. A large share of survey respondents cited tariffs as the most important factor affecting the Bank of Canada’s ability to control inflation. BoC Survey: Q3 business service indicator -2.28 from -2.40 in Q2 (revised from -2.42). BANK OF CANADA SURVEY: 27% OF FIRMS REPORTED OUTRIGHT DECLINE IN SALES OVER PREVIOUS 12 MONTHS, UP FROM 24% IN Q2 || 18% OF FIRMS EXPECT INFLATION TO BE ABOVE 3% FOR NEXT 2 YEARS, DOWN FROM 23% IN Q2 BANK OF CANADA SURVEY: 33% OF FIRMS EXPECT CANADA TO BE IN A RECESSION OVER THE NEXT YEAR, UP FROM 28% IN Q2 || 35% OF FIRMS EXPECT LOWER LABOR COSTS OVER NEXT 12 MONTHS, 14% SEE HIGHER LABOR COSTS

Tariffs and trade tensions continue to weigh on the outlooks of many firms. In some cases, the negative effects on costs and sales that most businesses predicted last quarter have materialized, and firms expect them to persist. At the same time, firms have moderated their expectations for negative impacts, as the worst-case trade scenarios they anticipated last quarter now appear less likely (Chart 1). For example, around two-thirds of firms expected higher tariff-related costs last quarter compared with only one-third this quarter. Last quarter, firms described the economic environment as highly unpredictable, which made it difficult for them to form a clear outlook for the year ahead. This quarter, more firms can now form an outlook with greater confidence, although they still report that it is hard or somewhat hard to do so. Fewer businesses are considering extremely negative scenarios in their planning. Canadian Survey of Consumer Expectations—Second Quarter of 2025 The CSCE indicator summarizes the opinions of Canadian consumers about their spending plans, the labour market and their personal finances (Box 1).1 This measure fell for the second consecutive quarter as the impact of tariffs and related uncertainty continued (Chart 1).2 Since the start of 2025, the decline in the indicator has been driven mainly by weaker spending intentions (Chart 1, green bars) and growing pessimism among Canadians about their financial health (Chart 1, yellow bars). This is particularly true for respondents in regions heavily dependent on trade with the United States. The labour market index remained nearly unchanged after falling sharply in the first quarter of 2025 (Chart 2). Consumers, especially young people, continued to report a higher-than-average chance of losing their job. This elevated concern is largely because of the trade conflict with the United States. In follow-up interviews, an employee of a manufacturing company said, “Tariffs are impacting my job a little bit. They are affecting my industry a lot, and many companies are laying off their employees.” Bank of Canada Q2 Business Sentiment Index Falls to -2.42 from -2.12 in Q1, revised from -2.14 . BOC Survey Says Tariffs and Uncertainty Still Significantly Affect Business Expectations Canada: BOC Survey Shows 64.5% of Canadians Expect Recession Next Year, Down from 66.5% in Q1

The Business Outlook Survey was conducted by in-person, video and phone interviews from February 6 to 26, 2025. The Business Leaders’ Pulse is conducted online every month; the latest results are from January, February and March 2025. This quarter’s publication also includes results from Governing Council outreach as well as special consultations with businesses and industry organizations in trade-sensitive sectors. This survey and consultation period was characterized by pervasive uncertainty created by the sudden and unpredictable shifts in US trade policy. The Business Outlook Survey (BOS) indicator—a summary measure of results from key questions in the BOS—reversed its upward trend this quarter and remains below average. This decline is due primarily to lower balances of opinion on employment, investment and measures of future sales, and, to a lesser extent, fewer significant capacity pressures (Chart 1). However, these decreases are partially offset by higher expectations for increases in input prices, with firms expecting costs to rise due to tariffs. This follows more than two years when slowing price increases contributed negatively to the BOS indicator. BoC Survey: 65% of firms believe costs would be pushed higher if widespread tariffs are implemented; as a result, 45% of all firms would increase selling prices. BoC Survey: Overall sentiment has deteriorated amid trade war with US, and uncertainty is widespread. BoC Survey: 32% of firms expect Canada to be in a recession over the next year, up from 15% in Q4.

Overall business sentiment remains subdued, but firms are beginning to anticipate improvements in sales activity. Meanwhile, businesses expect growth in costs to continue to ease and growth in selling prices to stabilize. • After a period of weak demand, firms expect their sales growth to improve over the coming year. This expectation is largely driven by recent interest rate reductions and the anticipation of further cuts ahead. • With lower financing costs and improving demand outlooks, intentions to increase investment have become more widespread among firms. Part of this is a resumption of previous plans that were postponed. BoC Business Outlook Future Sales Q4: 31.0 (prev 13.0) - Overall Business Outlook Survey: -1.2 (prev -2.3) BOC CONSUMER SURVEY: EXPECTATIONS FOR 5-YEAR INFLATION HAVE DROPPED TO 2.99% FROM 3.03% IN Q3. BOC Q4 SURVEY OF CONSUMER EXPECTATIONS SHOWS 46.5% OF CANADIANS EXPECT A RECESSION, DOWN FROM 49% IN Q3.