New research suggests small business confidence in Canada took a nosedive in October, dropping to levels not recorded since early in the pandemic.
The Canadian Federation of Independent Business says its latest business barometer survey found many businesses are struggling to repay debt accumulated during COVID-19 lockdowns as interest rates climb.
The business group says a third of Canadian small business owners now say borrowing costs are causing difficulties, compared with about a fifth of businesses at the start of the year.
Among provinces, it says Ontario saw the lowest short-term outlook and the biggest drop in confidence this month.
The CFIB says businesses in the retail sector posted the biggest short-term drop in optimism and were the least confident of the sectors, despite the holiday shopping season around the corner.
Andreea Bourgeois, economics director at the business group, says typically the retail sector sees a boost in optimism this time of year.
"It's concerning that the sector is showing such a negative outlook for the next three months,'' she said. "It really speaks to the anxiety business owners are feeling about inflation and lower consumer spending intentions.''
The CFIB's monthly business barometer survey in October was based on 752 online responses from business group members.
The polling industry's professional body, the Canadian Research Insights Council, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.