From the beginning of January to early February 2023, Statistics Canada conducted the Canadian Survey on Business Conditions to better understand the current environment businesses in Canada are operating in and their expectations moving forward. Based on the results of the survey, obstacles expected by small businesses in the coming months are centered around rising inflation, rising cost of inputs, and rising interest rates and debt. Small businesses were also more likely to expect a decrease in profitability and to expect supply chain problems but less likely to hire new employees and to increase prices for goods and services. 

Some of the obstacles smaller businesses expected to face in the coming months are different than those expected by larger businesses.  The top five expected obstacles for businesses with 1 to 19 employees over the next three months were rising inflation (57.5%), rising cost of inputs (44.7%), rising interest rates and debt costs (40.6%), recruiting and retaining skilled employees (35.6%), and cost of insurance (34.1%). In comparison, the top five expected obstacles for businesses with 100 or more employees over the next three months were recruiting and retaining skilled employees (67.2%), rising inflation (59.3%), rising cost of inputs (55.5%), shortage of labour force (55.3%), and rising interest rates and debt costs (33.6%).  While obstacles related to rising costs were expected to be significant for both smaller and larger businesses, larger businesses were more likely to expect challenges related to labour.

More than one-third (35.6%) of businesses with 1 to 19 employees expected to have obstacles related to recruiting and retaining skilled employees over the next three months, compared to around two-thirds of businesses with 20 to 99 employees (66.3%) and with 100 or more employees (67.2%).