Canada’s small business leaders are losing confidence in the economy — and fast.

The Canadian Federation of Independent Business ’ business barometer sharply fell in May, as every province and every sector reported a decline.

Overall, the barometer fell below the 50 threshold — meaning a majority of Canadian businesses expect their performance to be weaker over the next three and 12 months — to 46.3, down more than 11 points from April.

“Many small firms are stuck in a grind,” Andreea Bourgeois, CFIB director of economics, said in a news release last week. “Demand is weak, costs — especially fuel — are high and conditions don’t show signs of improving. This environment is not conducive to strong orders or investment.”

CFIB said fuel prices are the top sore spot for small-business owners, while weak consumer demand is also a source of pain.

Gas prices reached 180.4 cents per litre this week, which is down from 187.8 cents last week and from the monthly high of 190.4 cents on May 6, according to the Canadian Automobile Association .

Oil prices have fallen in recent days as United States President Donald Trump has suggested an end to the war on Iran may be on the horizon, but West Texas Intermediate is still above US$90 a barrel.

To address the added cost pressures, small businesses are expecting to raise their prices by an average of 3.1 per cent, outpacing April’s inflation rate of 2.8 per cent.

“This is not the direction we’d like to see this data point go,” Bourgeois said. “Higher oil prices add upward pressure on inflation, while tariffs and other economic challenges are still weighing on economic growth. With the next Bank of Canada interest rate decision only weeks away, it is a tough spot to be in.”

Economic pessimism, however, extends beyond small businesses.

Only 47 per cent of Canadian CEOs believe the global economy is set to improve within the next year, and just 27 per cent believe the Canadian economy will grow within the same time frame, according to a January survey of 133 Canadian CEOs from PwC Canada.

This is a drop from the same survey last year, although PwC said last year’s polling was conducted before it became clear Canada would be embroiled in a trade war with the U.S.

“For the first time in over five years, Canadian CEO sentiment is moving in the opposite direction of global optimism,” Nicolas Marcoux, chief executive of PwC Canada, said in the report. “The headwinds in Canada —trade uncertainty, tariff pressures and slower adoption of transformative technologies like AI — are significant. But they’re also a catalyst. We’re seeing Canadian companies rise to the challenge by entering new sectors to build resilience and unlock growth.”

Sign up here to get Posthaste delivered straight to your inbox.

The surging demand for microchips has brought two more companies into the illustrious “trillion dollar club.”

Both SK Hynix Inc. and Micron Technology Inc. have eclipsed a market capitalization of US$1 trillion on exploding demand, as investors become convinced the AI boom is here to stay.

SK Hynix Inc. is particularly riding the wave, with the stock up 1,000 per cent over the past 12 months, while analysts believe Micron’s stock will double over the next year.

  • 10 a.m.: Bank of Canada financial stability report
  • Today’s data: U.S. first quarter real GDP
  • Earnings: Costco Wholesale Corp., Royal Bank of Canada, Dell Technologies Inc., TD Bank, Canadian Imperial Bank of Commerce, MondoDB Inc., Dollar Tree Inc., Best Buy Co. Inc., BRP Inc.
  • Germany, Canada reach major LNG deal as Europe seeks energy security
  • Canada chooses Swedish-made early warning aircraft over U.S. bids
  • Scotiabank CEO says investors shifting their focus to ‘business-friendly’ Canada
  • BMO beats expectations, hikes dividend on boost from capital markets

Read more here. House flipping can be expensive if you don’t follow the rules. Since 2023, you cannot claim the principal residence exemption to shelter the capital gain realized on the sale of your home if you’ve owned it for less than 12 months. Even though these are fairly new rules, the Canada Revenue Agency can still challenge real estate “flips” that took place prior to 2023 if it feels a taxpayer has speculated and flipped a property for a quick profit. Tax expert Jamie Golombek tells what happened when the CRA questioned the $457,000 gain of one Vancouver taxpayer on the sale of a condo. Find out more

Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors. Sign up here.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com .

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here