Bank of Canada surveys: 21% of firms plan job cuts, while recession budgeting drops to 22% from 33%

By Tahani Elghazaly
Published January 21, 2026

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Bank of Canada surveys indicate business and consumer pessimism persists as trade-related uncertainty and tariff concerns weigh on decisions, Reuters reported, citing the central bank’s Q4 2025 Business Outlook Survey and Consumer Expectations Survey released on Monday, Jan. 19, 2026.

In the Business Outlook Survey, 21% of firms said they plan to reduce their workforce over the next 12 months, the highest share since 2016. Meanwhile, the share of firms planning or budgeting for a recession over the next year fell to 22% from 33% in the previous quarter. The overall business outlook indicator improved slightly to -1.78 from -2.27, but remained negative as firms stayed cautious amid soft demand and trade pressures.

In the Q4 2025 Canadian Survey of Consumer Expectations, the Bank said concerns over high prices and economic uncertainty related to the trade conflict continue to weigh on households. Consumers reported a higher perceived likelihood of missing a debt payment and a slightly greater chance of losing their job, alongside weaker spending plans, despite some improvement in labour market conditions.