Canadian CEOs are feeling strong headwinds in the current business environment, from the threat of U.S. tariffs to a shakeup in Ottawa and an ever-increasing cost of living (and doing business), but most are optimistic things will improve in 2025.
When asked to rate current conditions, on a 10-10 scale where 1 is Poor and 10 is Excellent, the 209 CEOs polled January 20-24, as part of our quarterly Canada CEO Confidence Index conducted in partnership with MacKay CEO Forums, gave them an average of 5.4, a decrease of 5 percent from when we polled them in November.
When asked to forecast conditions 12 months from now, however, they gave an average of 6.1 out of 10, up 2 percent since November—and a 12 percent increase from what they are today.
Overall, 51 percent of Canadian CEOs polled say they expect business conditions to improve in 2025, up 9 percentage points from 42 percent in our last poll in November. The proportion who expects conditions to deteriorate remained flat, at 26 percent, while those who forecast no change decreased from 31 percent to 22 percent this January.
“Positive change will take time, but over-taxation and over-bureaucratization has had a significant negative effect on business overall, with less investment, less growth and an overall shrinking private market,” commented Dan Moseley, managing partner of McQuarrie, a law firm in Surrey, BC.
Moseley isn’t alone in pointing to goings-on in Ottawa to explain his forecast. Most of those who foresee improvements in the year ahead cited the change in leadership at the federal level as an impetus for their optimism: 57 percent say they are optimistic it will help support better conditions for businesses across the country—and a full third of them say the change will be “significantly positive.”
“Conservative policies are much more business-friendly for Canadians and global investors,” said Iain Sewell, president and general manager at South Fork Energy Services in Alberta.
“This is entirely dependent on exactly whom we elect,” added Marv Thielmann, CEO of Timberstone Properties in Edmonton.
“Until there is a party change, things [will] continue to spiral out of control for business in a multitude of ways,” said Joe Strang, CEO of The Showcase Group, a Calgary-based audio visual and smart home automation company. “Otherwise, Canada will be a complete business disaster.”
Then, there are headwinds coming from south of the border. Most CEOs say they are factoring into their forecast the likelihood that the U.S. will impose tariffs on Canadian goods and services, though 58 percent say it’s probably not going to be the full 25 percent the Trump administration has proposed.
“Any rational person cannot predict what the USA will actually do under Trump. He likes to throw countries off balance, and he is as fickle as they come unless it’s in his own personal interests,” said David Jevons, president of Ontario-based industrial manufacturer CDM Jevons.
Still, Pete Baran, the founder of business consultancy Blueneck Consulting, says he’s preparing for the eventuality that the tariffs do transpire as planned. “Two days in, anyone who thought Trump was ‘just kidding’ on anything outrageous, has been proven wrong,” he said.
An astounding 87 percent say they are prepared to deal with those tariffs and that even if they may impact the course of business initially, they will be able to pivot and adjust accordingly. Only 13 percent said it would be devastating for their companies.
“Numode Transport Ltd is somewhat prepared for this. However, with the uncertainty in Ottawa it is difficult to deal with,” said Numode’s president and CEO, Andrew Kronquist.
“We intend to focus on the Canadian market and Europe for new customer acquisition and wait and see what happens in the U.S.,” said Angella Hughes, owner and president of Glomalin, a personal care products company out of Ontario.
For many, how long the tariffs will stay in place before a new trade agreement is reached is key to the conversation.
“The tariffs are not the issue. The length of time they are in place is the important fact and then, what, if any, response is necessary,” said Chris Tambakis, CEO of Adgar Canada, an active, long term real estate investor, developer and manager with holdings in Canada, Israel and Europe.
Another major headwind for Canadian businesses: the ever-increasing cost of living—and doing business. Nearly half (45 percent) of CEOs polled cited rising costs, excluding the proposed U.S. tariffs, as their main challenge this year—and 39 percent said dealing with the U.S. tariffs, if implemented, would be a top challenge as well.
One of the strategies to counter these rising expenses entails increasing prices on goods and services: 71 percent of the CEOs polled say they plan to increase their pricing in 2025, up from 61 percent who did so in 2024. For most of those CEOs, the increases will be by less than 7.5 percent.
Despite these price increases, 51 percent of CEOs say their profit margins have remained flat. Only 35 percent said changing their pricing strategy had led to greater profitability (and the vast majority of those CEOs say the change was minimal)—perhaps due to the fact that 51 percent plan to increase their capital expenditures this year, and 43 percent expect to add to their headcount.
Overall, this means that for 2025, nearly two-thirds are either keeping their target margins the same as in 2024 or slightly higher, which, according to our data, is less than 15 percent.
With representation from most provinces and sectors, it is only natural that some CEOs disagree with the average outlook reported above. For instance, on the rating of business conditions 12 months from now, CEOs in the transportation and energy sectors are expecting the biggest change in 2025, forecasting improvements in business conditions by 58 and 49 percent, respectively, from what they are today.
Still, agriculture/forestry and construction CEOs stand out from the group with expectations that business conditions by the end of 2025 will rank as 7 and 6.9 on our 10-point scale, respectively—the highest rankings of the group.
We’re seeing similar variations across provinces, with CEOs in Western Canada and the Prairies being significantly more optimistic than their peers.
Differences were also present by company size and ownership type, as can be expected. A full report of the findings across these variables is available upon request.
Chief Executive Group polls hundreds of C-Suite and board members throughout the year to build our CxO Confidence Index series. The Index provides insightful data into business trends and what will likely shape strategies for the year ahead. In August 2024, we expanded the series to Canada. Our January 2025 edition of the Canada CEO survey was the third one in the series. It received 209 responses.
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