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June 17, 2025
Canadian CEOs’ Outlook Shows Cautious Improvement In May, Amid Skepticism Over What Comes Next
The Canadian business community is facing significant headwinds amid ongoing trade negotiations with the U.S. and a new cabinet taking office on Parliament Hill.
According to our Canada CEO Confidence Index—a quarterly poll of CEOs from around the country on their sentiment for business and what they forecast and plan for the year ahead—business conditions have been trending down since we launched the Index in Q3 of 2024.
In our latest survey, conducted in May in partnership with MacKay CEO Forums, CEOs ranked current business conditions at 4.6 out of 10, on a scale where 1 is Poor and 10 is Excellent. That is down 4 percent from their March rating (4.8 / 10) and 14 percent off where we started the year (5.4 / 10).
When asked to explain their rating, U.S.-driven factors were most commonly cited by the nearly 200 CEOs polled (44 percent), followed by general uncertainty (31 percent) and the overall state of the Canadian economy (30 percent).
Perhaps a bit of good news in the data: CEOs forecast business conditions by this time next year will have improved, by 8 percent from what they are today, to 5.0 out of 10. That is 5 percent better than what they had forecasted in March (4.8), which indicates optimism is growing—albeit cautiously. Their outlook still remains 16 percent off January forecasts (5.9 / 10).
The reason for the uptick, polled CEOs say, is hope that a new trade deal with the U.S. will be made in the near future and that the newly elected government will rise to the challenge.
“We seem to be sitting in a time of limbo right now due to the current political environment. I believe that something will happen to make a shift within the next year, and it will help us to bring back levels that we have not experienced in a while,” said one CEO participating in the poll.
“Optimistically, Trump’s tariff plans will self-destruct within six months,” forecasted a CEO in Ontario, adding that the U.S., when faced with the economic effect of its trade war, will “come to the realization that they need their allies, and a spirit of free trade will hopefully prevail, getting rid of the unfair tariffs and returning world trade to a more normal—or a new normal—level.”
“Dealing with the tariff disruption is a significant issue. Hopefully by next year, normalcy will return to the market,” said another, echoing several of the CEOs polled.
Overall, 43 percent expect improvements in the business landscape in the coming months, vs. 36 percent who felt the same when polled in March. The proportion of those expecting deteriorating conditions also decreased, from 40 percent in March to 27 percent in our May polling—back to December levels.
The uptick in optimism is also partly explained by the fact that 62 percent of CEOs believe the newly elected federal government will be able to advance policies that will support Canadian businesses’ competitiveness nationally and on the world scene.
“There is nothing like a good crisis to get governments moving in the right direction. The federal government will need to take a ‘national’ approach, and this government is signaling that it will,” said one of the CEOs, echoing sentiment among those hopeful for improvements.
“Mark Carney is a pretty smart guy whose business chops have sadly been missing in the PM role for the last while. Moving from social mindset to business mindset in government has me very optimistic,” said Terry Gillis, CEO of talent management consultancy Ahria Consulting.
“I think we have a few tough years ahead as we reorient our economic partnership models away from the USA with a greater focus on internal trade and new markets beyond North America,” added another CEO. “I am extremely optimistic that the long-term impact for Canada will be very positive.”
Of course, many remain cautious in their expectations.
“Guarded would be a better description,” said one CEO.
“Cautiously optimistic,” said another. “Carney is the right guy with the right brain. Question is whether the Liberal party and minority government will let him work his magic that he is capable of.”
“I am hopeful a banker recognizes the stark reality the numbers are telling and puts results ahead of ideology for the first time in 10 years,” said one CEO.
Meanwhile, some are carefully monitoring progress, skeptical change will come.
“I hope I am wrong but so far, the Liberal policies are the Liberal policies that were led by Trudeau,” said one CEO.
“The same people have been unable to accomplish anything for 10 years. Why would that change?,” commented a CEO.
“We need to see defined direction and policies before we will know what’s in store for the next 12 to 24 months,” said another CEO.
“If governments will work together there is a chance, however history tells me this won’t be the case,” said one CEO.
Michael Polo, president of Hall Telecommunications Supply, says this doesn’t all fall on Carney: “We have the right leader in place. His caucus will need to stand with him,” he said.
Agreed another CEO: “My view is that both the Conservatives and the Liberals are capable and able to advance necessary policies to support Canadian competitiveness to a certain degree. However, special interest groups and personal agendas always seem to get in the way.”
The Buy Canadian movement has gained momentum among Canadians in general, but for business leaders who are already dealing with the financial repercussions of the tariffs and rising prices, this is easier said than done.
When asked how their purchasing behaviour had changed in light of the U.S.’s approach to trade with Canada, 40 percent of the CEOs polled said there had been no change in their respective companies’ use of U.S. vendors if those vendors continue to have the most competitive products or services. Another 35 percent said they do favour Canadian businesses but up to a premium of 15 percent.
When it comes to their personal consumption, however, a greater proportion of CEOs say they are, indeed, favouring Canadian vendors (77 percent).
As for how long this situation would last, the majority of those who have changed their buying habits in favour of the Buy Canadian movement say they will continue to do so at least “until a trade deal is struck with the U.S.” Only 8 percent say there is no going back.
When asked how all of this will affect their respective companies:
Please note: If you would like an in-depth look at those numbers by sector, province or relative exposure to the U.S., please request a report at research@chiefexecutivegroup.com.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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