The State of Canadian Small Business Health: Q1 2025 Performance
Canada: Uncertainty impeded improvements
Canadian Small Business Health Index, Q1 2025
99.3
Year-over-year difference
+0.9%
Difference over the previous quarter
-1.5%
The improving economic landscape pushed the national index above 100 at the end of 2024. However, significant economic and market uncertainty has since brought it closer to its historical average. In Q1 2025, the national index dipped to 99.3, down 1.5 per cent from the previous quarter, but still up 0.9 per cent from the Q1 2024 level. Despite a generally better business environment and improved confidence since last year, SMBs are still struggling financially. Economic and market uncertainties are clouding the outlook for the remainder of the year. Read the full report here.
Atlantic: Starting 2025 with momentum
In the Atlantic region, the index indicates 2025 started positively with a quarter-over-quarter improvement of 2.6 per cent. All components in the Atlantic index rose by over 3 per cent, aside from credit performance, which fell by 0.2 per cent, driven by increasing revolving credit usage, insolvencies, and 90 days or more non-financial trade delinquencies. Read the full report here.
Quebec: Back to average after a year of recovery
Business health in Quebec returned to average levels in Q1 2025. Overall, the Quebec index stood at 100.4, an increase of 2.8 per cent compared to Q1 2024. However, it declined 1.7 per cent from the previous quarter. This suggests that growing economic uncertainty showed its effects early in the year. Read the full report here.
Ontario: Business environment progress hampered by credit challenges
Despite quarterly and annual improvements in environmental factors, Ontario’s index declined to 99.0 in Q1 2025. This marked a 2.3 per cent drop from the previous quarter, primarily driven by weakening credit performance, lower business growth expectations and a decline in overall sentiment. Ontario’s economy is particularly exposed to market fluctuations in the automobile sector. Read the full report here.
Manitoba and Saskatchewan: Resilience despite uncertainty
The index for Manitoba and Saskatchewan stood at 104.0, a 2.7 per cent drop from the previous quarter. Tariffs imposed by China on Canadian canola meal and oil are affecting Saskatchewan’s exports of farm and fishing products, which fell by 17.5 per cent in Q1 2025. On the other hand, Manitoba’s economy is highly exposed to market uncertainty, with 77 per cent of its exports going south of the border. Despite the decline, the index remains relatively high and shows strong growth momentum in the second half of 2024. Read the full report here.
Alberta: Prepared to handle uncertainty
Alberta’s businesses were prepared to tackle the challenges posed by economic and market uncertainty and lower oil prices. The Alberta index has been above the historical average since Q2 2024 and has remained above this mark, evidence of businesses’ strong position in the province. Despite a slight decline in the last quarter (-1.5 per cent), the index stood at 101.0, showing growth of 1.3 per cent over the year-ago level. Read the full report here.
British Columbia: Behind the pack
The index in British Columbia was the lowest among the regional indices last quarter. Despite rising slightly at the end of 2024 to 97.8, it has since fallen somewhat below its average, to 95.0. Read the full report here.
