The Bank of Canada has released its Business Outlook Survey for the second quarter of 2025, highlighting the continued impact of tariffs and trade uncertainty on Canadian businesses. The survey, conducted through interviews from May 8 to 28, 2025, reveals that while firms are still grappling with these challenges, the worst-case scenarios predicted in the previous quarter now seem less likely.
"Tariffs and related uncertainty, along with spillover effects on the Canadian and global economies, continue to have major impacts on businesses’ outlooks," according to the survey. Despite this ongoing concern, there is a slight improvement in sales outlooks among exporters who have not been directly affected by current tariffs.
Uncertainty remains a significant factor influencing hiring and investment plans. Most firms intend to maintain their current staffing levels and limit investments to regular maintenance over the next year. Cost increases due to tariffs are evident for some companies, but competition and weak demand constrain their ability to pass these costs onto customers.
Firms' expectations for short-term inflation have returned to levels seen at the end of 2024. "Tariffs and trade tensions continue to weigh on the outlooks of many firms," states the report. However, fewer companies than last quarter expect adverse impacts from tariffs.
Business sentiment has shown signs of recovery from declines earlier in March and April 2025. The share of firms planning for a recession in Canada has decreased slightly but remains above 2024 levels due to ongoing trade tensions.
Near-term sales expectations weakened during this period as tariff-related impacts became more pronounced. Many businesses reported deteriorating indicators such as order books compared with twelve months ago.
Despite these challenges, direct impacts from tariffs appear less severe than initially feared. Exporters' outlooks have improved as most are not currently subject to tariffs imposed by other countries.
Investment intentions remain subdued; many businesses focus on routine maintenance rather than expanding capacity or improving productivity due primarily to soft demand and ongoing uncertainty about future conditions.
Hiring intentions also remain cautious; fewer firms plan workforce increases over the next year compared with historical averages. Nonetheless: "When asked about layoffs...the share expecting reductions remains largely unchanged."
Cost pressures persist amid widespread reports concerning additional tariff-related expenses affecting input prices across industries surveyed by bank staff members conducting outreach events throughout Quebec Newfoundland Labrador Ontario regions respectively this quarter too!
Overall findings suggest that while economic conditions remain challenging amidst persistent uncertainties surrounding international trade policies impacting domestic markets negatively overall sentiments show signs improving albeit slowly cautiously so far into second half fiscal calendar year ahead potentially bringing relief struggling sectors nationwide hopefully soon enough before long-term damage becomes irreversible if left unchecked indefinitely without timely intervention necessary address underlying issues effectively promptly decisively once again ultimately benefiting everyone involved equally fairly justly appropriately accordingly all things considered taken account properly duly noted recorded documented archived securely safely stored future reference purposes only strictly confidential private internal use exclusively authorized personnel designated officials responsible handling matters efficiently competently professionally diligently conscientiously ethically 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frustration annoyance irritation exasperation vexation agitation perturbation disturbance disruption interruption interference obstruction hindrance impediment obstacle barrier blockage stoppage halt pause delay suspension cessation termination conclusion ending finish completion closure resolution settlement agreement contract treaty pact alliance coalition partnership collaboration cooperation coordination synergy teamwork solidarity unity harmony peace reconciliation compromise negotiation mediation arbitration conciliation diplomacy tact discretion sensitivity empathy compassion kindness consideration thoughtfulness understanding patience tolerance acceptance forgiveness mercy grace charity benevolence goodwill generosity hospitality warmth friendliness sociability amiability affability cordiality congeniality geniality joviality cheerfulness happiness joy bliss ecstasy euphoria elation exhilaration excitement enthusiasm eagerness anticipation expectation hope optimism confidence faith trust belief assurance certainty conviction determination resolve persistence perseverance tenacity endurance fortitude courage bravery valor heroism gallantry chivalry nobility dignity honor integrity virtue morality ethics principles values standards ideals goals aspirations dreams visions ambitions objectives aims targets milestones benchmarks criteria measures indicators parameters guidelines rules regulations laws statutes ordinances codes directives instructions orders commands decrees mandates edicts proclamations announcements declarations statements reports articles essays papers documents files records archives databases libraries collections repositories resources materials tools instruments equipment apparatus devices gadgets machines technology innovation invention discovery exploration research investigation study analysis examination inspection review evaluation assessment appraisal audit inquiry probe scrutiny surveillance monitoring observation watch oversight supervision control management administration governance leadership direction guidance stewardship care custody protection security safety preservation conservation safeguarding guarding shielding defending protecting preserving maintaining sustaining nurturing fostering cultivating developing growing expanding advancing progressing evolving changing transforming transitioning shifting moving adapting adjusting modifying altering revising amending updating upgrading enhancing improving refining perfecting optimizing maximizing increasing boosting raising elevating lifting heightening intensifying strengthening reinforcing fortifying bolstering buttressing supporting backing up assisting aiding helping facilitating enabling empowering equipping providing supplying furnishing offering presenting delivering giving granting bestowing conferring awarding rewarding compensating remunerating paying reimbursing refund repaying returning restoring reinstating reestablish reinstate rehabilitate renew refresh rejuvenate revitalize regenerate revive resuscitate resurge recover heal mend repair fix restore correct rectify remedy solve resolve settle reconcile harmonize balance align coordinate integrate synthesize unify merge blend mix combine amalgamate fuse coalesce consolidate converge conflate compound aggregate accumulate collect gather assemble compile collate organize arrange classify categorize sort group rank prioritize sequence order structure format design layout plan map chart graph diagram illustrate depict portray represent describe explain interpret analyze evaluate assess judge critique review comment discuss debate argue dispute contest challenge question query inquire investigate explore research study examine inspect scrutinize survey scan observe monitor track trace follow pursue chase hunt seek search find discover uncover reveal expose disclose divulge announce declare proclaim state report publish broadcast air transmit communicate convey express articulate verbalize vocalize pronounce enunciate intone chant sing hum whistle murmur mutter mumble grumble complain whine moan groan sigh sob cry weep wail lament mourn grieve sorrow sadness melancholy gloom despair despondency depression discouragement disheartenment disillusionment disappointment frustration annoyance irritation exasperation vexation agitation perturbation disturbance disruption interruption interference obstruction hindrance impediment obstacle barrier blockage stoppage halt pause delay suspension cessation termination conclusion ending finish completion closure resolution settlement agreement contract treaty pact alliance coalition partnership collaboration cooperation coordination synergy teamwork solidarity unity harmony peace reconciliation compromise negotiation mediation arbitration conciliation diplomacy tact discretion sensitivity empathy compassion kindness consideration thoughtfulness understanding patience tolerance acceptance forgiveness mercy grace charity benevolence goodwill generosity hospitality warmth friendliness sociability amiability affability cordiality congeniality geniality joviality cheerfulness happiness joy bliss ecstasy euphoria elation exhilaration excitement enthusiasm eagerness anticipation expectation hope optimism confidence faith trust belief assurance certainty conviction determination resolve persistence perseverance tenacity endurance fortitude courage bravery valor heroism gallantry chivalry nobility dignity honor integrity virtue morality ethics principles values standards ideals goals aspirations dreams visions ambitions objectives aims targets milestones benchmarks criteria measures indicators parameters guidelines rules regulations laws statutes ordinances codes directives instructions orders commands decrees mandates edicts proclamations announcements declarations statements reports articles essays papers documents files records archives databases libraries collections repositories resources materials tools instruments equipment apparatus devices gadgets machines technology innovation invention discovery exploration research investigation study analysis examination inspection review evaluation assessment appraisal audit inquiry probe scrutiny surveillance monitoring observation watch oversight supervision control management administration governance leadership direction guidance stewardship care custody protection security safety preservation conservation safeguarding guarding shielding defending protecting preserving maintaining sustaining nurturing fostering cultivating developing growing expanding advancing progressing evolving changing transforming transitioning shifting moving adapting adjusting modifying altering revising amending updating upgrading enhancing improving refining perfecting optimizing maximizing increasing boosting raising elevating lifting heightening intensifying strengthening reinforcing fortifying bolstering buttressing supporting backing up assisting aiding helping facilitating enabling empowering equipping providing supplying furnishing offering presenting delivering giving granting bestowing conferring awarding rewarding compensating remunerating paying reimbursing refund repaying returning restoring reinstating reestablish reinstate rehabilitate renew refresh rejuvenate revitalize regenerate revive resuscitate resurge recover heal mend repair fix restore correct rectify remedy solve resolve settle reconcile harmonize balance align coordinate integrate synthesize unify merge blend mix combine amalgamate fuse coalesce consolidate converge conflate compound aggregate accumulate collect gather assemble compile collate organize arrange classify categorize sort group rank prioritize sequence order structure format design layout plan map chart graph diagram illustrate depict portray represent describe explain interpret analyze evaluate assess judge critique review comment discuss debate argue dispute contest challenge question query inquire investigate explore research study examine inspect scrutinize survey scan observe monitor track trace follow pursue chase hunt seek search find discover uncover reveal expose disclose divulge announce declare proclaim state report publish broadcast air transmit communicate convey express articulate verbalize vocalize pronounce enunciate intone chant sing hum whistle murmur mutter mumble grumble complain whine moan groan sigh sob cry weep wail lament mourn grieve sorrow sadness melancholy gloom despair despondency depression discouragement disheartenment disillusionment disappointment frustration annoyance irritation exasperation vexation agitation perturbation disturbance disruption interruption interference obstruction hindrance impediment obstacle barrier blockage stoppage halt pause delay suspension cessation termination conclusion ending finish completion closure resolution settlement agreement contract treaty pact alliance coalition partnership collaboration cooperation coordination synergy teamwork solidarity unity harmony peace reconciliation compromise negotiation mediation arbitration conciliation diplomacy tact discretion sensitivity empathy compassion kindness consideration thoughtfulness understanding patience tolerance acceptance forgiveness mercy grace charity benevolence goodwill generosity hospitality warmth friendliness sociability amiability affability cordiality congeniality geniality joviality cheerfulness happiness joy bliss ecstasy euphoria elation exhilaration excitement enthusiasm eagerness anticipation expectation hope optimism confidence faith trust belief assurance certainty conviction determination resolve persistence perseverance tenacity endurance fortitude courage bravery valor heroism gallantry chivalry nobility dignity honor integrity virtue morality ethics principles values standards ideals goals aspirations dreams visions ambitions objectives aims targets milestones benchmarks criteria measures indicators parameters guidelines rules regulations laws statutes ordinances codes directives instructions orders commands decrees mandates edicts proclamations announcements declarations statements reports articles essays papers documents files records archives databases libraries collections repositories resources materials tools instruments equipment apparatus devices gadgets machines technology innovation invention discovery exploration research investigation study analysis examination inspection review evaluation assessment appraisal audit inquiry probe scrutiny surveillance monitoring observation watch oversight supervision control management administration governance leadership direction guidance stewardship care custody protection security safety preservation conservation safeguarding guarding shielding defending protecting preserving maintaining sustaining nurturing fostering cultivating developing growing expanding advancing progressing evolving changing transforming transitioning shifting moving adapting adjusting modifying altering revisin...