Nearly a quarter of Canadian businesses expect their costs to increase as United States President Donald Trump takes office, according to a new survey from the Bank of Canada.
The central bank surveyed more than 900 business leaders in December. The results of its “Pulse of Business Leaders” were published on Monday.
The survey indicates that 18% of these companies expect their sales prices to increase as Donald Trump takes office, while 11% expect their prices to fall.
Overall, 40% of companies anticipate that Donald Trump’s rise to power will have a negative impact on their businesses, while a third said it was too early to tell.
The Bank of Canada also surveyed senior executives at about 100 companies, but virtually all of the companies were surveyed before Donald Trump first threatened to impose 25% tariffs on Canada — although His rhetoric on the United States’ economic relations with its global trading partners was prominent throughout his election campaign.
In November, Canadian businesses expected sales growth to improve through 2025, boosted by anticipation of further interest rate cuts to come.
Consumer expectations
The growth in sales expectations coincided with the Bank of Canada’s survey of consumer expectations for the fourth quarter of 2024, during which consumer sentiment was improving on anticipation of further rate cuts .
Fewer consumers say they are spending less or plan to reduce their spending than in the previous quarter.
-Yet high costs of goods and housing and economic uncertainty still weigh on consumers and their purchasing decisions. The source of uncertainty has shifted from changes in interest rates and government policy to the new US administration.
“During follow-up interviews (conducted between November 25 and December 3), consumers continued to mention the ways in which they adjust to these factors when making their decisions, including changing their purchasing behaviors” , we can read in the summary of the investigation.
There was also an increase in the number of consumers who reported a likelihood of losing their job.
“Job security is very low because there are so many people who can do the same job,” said one respondent.
However, only 12% of businesses said they expected employment levels at their companies to decline, which is close to historical averages. The number of companies planning for higher levels increased slightly, to 45%.
Businesses expect annual inflation of between 2% and 3% over the next two years, with some companies mentioning that U.S. tariffs could push their inflation forecasts upwards.
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