Canada's Businesses Stuck in Neutral as Uncertainty Holds Back Investment

Canada's economy is showing signs of improvement, but businesses are still hesitant to invest. Despite lower interest rates and eased inflation, many companies are delaying major investment decisions until they have more certainty about the future.

The Business Data Lab's latest report reveals that only 1% of businesses plan to move operations or investments to the United States due to ongoing trade uncertainty. Instead, most businesses are choosing to wait rather than relocate production outside Canada.

Manufacturing is particularly affected, as this sector is closely tied to international trade. Even manufacturers are more likely to delay investment and expansion plans rather than relocate production elsewhere.

The cost of waiting is significant, with delayed investments slowing productivity, weakening competitiveness, and making it harder for the Canadian economy to grow in the long term. The Business Data Lab has introduced a new tool, the Business Investment Momentum Index (BIMI), which tracks where businesses plan to invest and helps understand investment trends across industries.