Canadian businesses became less optimistic after Canada–United States trade talks collapsed in August, partly reversing an earlier improvement, the Bank of Canada reported Monday, October 19.

The timing matters: its third-quarter Business Outlook Survey interviewed firms from August 6 to September 2, with about three-quarters of interviews completed before the breakdown. Later responses and monthly polling capture a less favourable picture.

An earlier improvement, followed by renewed pressure

The quarterly results showed better sales expectations overall. But evidence collected after negotiations broke down pointed to weaker export and investment outlooks, alongside higher inflation expectations as tariffs and energy costs rose.

The Bank described a partial reversal, not a fundamental shift: sentiment remained stronger than during the most intense trade tensions in 2025.

Reuters’ October 19 report similarly emphasized the difference between the earlier survey improvement and the deterioration after the talks failed.

Hiring plans remain subdued

Most firms in the quarterly interviews expected to keep staffing unchanged. Businesses also reported changing suppliers, seeking new markets and using technology to manage trade-related pressures.

These are respondents’ expectations and reported adjustments, not a tally of jobs already created or lost. The publication does not establish what any particular Hamilton employer will do, nor does it announce an interest-rate decision.

The distinction is important for readers weighing apparently conflicting headlines: an average covering a quarter and responses gathered after a disruptive event describe different observation windows.

Sources: Bank of Canada, Business Outlook Survey—Third Quarter of 2026, October 19; Reuters, October 19.

Lead image: Editorial illustration of a business manager reviewing survey paperwork beside a freight-loading area; not a photograph of a surveyed firm.