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Canadian Business Confidence Shows Resilience Despite US Tariff Threats, BMO Says

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Canadian business sentiment held up in August despite the threat of additional US tariffs, according to BMO Capital Markets in a Thursday note after the release of CFIB's Business Barometer Index.

Canadian businesses' 12-month outlook fell just one point to 57.6, remaining above the 50-point level that signals expansion, according to the CFIB.

While the indicator isn't strongly correlated with business-sector gross domestic product growth, it remains a useful early signal of how businesses are responding to renewed US tariff threats, wrote BMO Senior Economist Shelly Kaushik in the note.

The timing is particularly important, as the US threats come just as the economy was gaining momentum in the second quarter and business investment was beginning to show some recovery, added the bank.

"If businesses can truly look past the trade headlines going forward-and if we really do get a deal this week -- the resilience narrative may just take off," added the economist.

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