CFIB's long-term index fell from 57.6 in August, a bigger move than the gradual declines seen through much of the summer.

CFIB's Business Barometer, released September 18, shows small business confidence falling to 53 in September, down from 57.6 in August — a sharper single-month drop than the gradual erosion that's characterized much of the year so far. A reading above 50 still signals net optimism, but this is the lowest level the long-term index has touched since the acute shock earlier in the year tied to the outbreak of conflict in the Middle East.

What's driving it

The timing lines up closely with Canada's own counter-tariffs on U.S. goods, which took effect September 8 covering roughly $27.6 billion in imports across steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. For businesses that rely on any of those categories as inputs, the countermeasures raise costs at the same time they're meant to pressure Washington — a dynamic that shows up directly in how owners rate their own near-term outlook, independent of how the broader economy is performing.

It also follows a Bank of Canada decision on September 2 that held rates steady while explicitly warning that tariffs and oil prices could push inflation higher — language that tends to weigh on sentiment even without an actual rate change, since it signals the Bank sees less room to offer relief if conditions worsen.

Reading it against the rest of the data

The confidence drop sits at odds with some of the harder economic numbers — GDP grew 3.3% in the second quarter, unemployment eased to 6.4% in July, and the TSX has been setting fresh highs. That gap is common during periods of trade uncertainty: aggregate economic data reflects what already happened, while a confidence survey captures how owners feel about what's coming, and right now what's coming includes a fresh layer of tariff-driven cost pressure that hasn't fully worked its way into the broader numbers yet.