Key Trends currently affecting Canadian Businesses

🇨🇦 1. 🇺🇸 Trade tensions & “Buy Canadian” resurgence

• Tariffs on steel, aluminium, autos, etc., from the U.S. are squeezing margins—many Canadian firms are absorbing higher input costs and holding off on price increases Financial Times+15The Wall Street Journal+15Bank of Canada+15.

• Yet the same tariffs have fueled a resurgence of the “Buy Canadian” movement, with strong public support and grassroots campaigns encouraging domestic consumption Shopify+3Business Insider+3Wikipedia+3.

• To reduce dependency on the U.S., Canada is pursuing new trade pacts—including with Mercosur, the EU, and Pacific partners—and interprovincial trade barriers are being dismantled via the One Canadian Economy Act (Bill C‑5) Statistics Canada+14Reuters+14Wikipedia+14.

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🌐 2. Trade deal negotiations & diversification

• High-level diplomacy continues with U.S. senators visiting Ottawa, and Canada rescinded its Digital Services Tax to resume U.S. talks by July 21, 2025 AP News.

• Exploring free trade with Mercosur, along with renewed ties with China, India, UAE and beyond to pivot from reliance on the U.S. The Wall Street Journal+7Reuters+7Politico+7.

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📉 3. Macroeconomic caution & interest‑rate dynamics

• Firms are cautious about raising prices, absorbing cost pressure; many are pausing hiring or investment Bank of Canada+4The Wall Street Journal+4Shopify+4.

• Business sentiment has softened (Bank of Canada outlook index recently negative), but fears of worst-case tariffs have eased Business Insider+6Reuters+6The Wall Street Journal+6.

• Inflation outlook has moderated, keeping interest rates steady for now. Central bank eyes potential rate cuts in fall 2025 The Wall Street Journal.

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🤖 4. Technology adoption, AI & digital finance

• AI-powered content and automation tools are surging among SMBs—leveraging generative AI for marketing, imagery, product descriptions, and customer targeting Checkout.com+4Shopify+4Shopify+4.

• Fintech adoption is growing: ~60% of Canadian businesses plan to invest further in digital payments, with 77% prioritizing real-time payment systems Bank of Canada+5plooto.com+5EMARKETER+5.

• Government-backed Canada Digital Adoption Program continues nudging SMBs to integrate digital systems with grants and expert support Wikipedia.

• As digital adoption rises, so do concerns over cybersecurity risks, especially for firms expanding cloud and AI usage arXiv.

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🧑‍💼 5. Workplace change & skills evolution

• Businesses face a persistent labour shortage, and employee engagement remains a springboard for retentionGreat Place to Work.

• Companies report struggle bridging the AI skills gap—31% see AI as top concern, but only 17% are investing in training Great Place to Work.

• Middle managers are pivotal in this AI transformation—but 70% of organizations aren’t equipping them Great Place to Work.

• Financial well-being benefits (housing support, savings plans), DEIB evolution, and mental health support are increasingly woven into workplace strategies Great Place to Work.

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📈 6. Digital marketing shifts

• Digital ad spending remains dominant (~77% of total ad budgets), though growth is slowing under trade-related uncertainty EMARKETER.

• Canadians spend over six hours daily online; businesses rely heavily on search (46%) and social media (26%) advertising Made in CAmarkage.ca.

• Brands are doubling down on storytelling, personalization, privacy compliance, and community building to stand out LinkedInBusiness Link.

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🌱 7. Sustainability & carbon transition

• The federal government is working with Alberta’s oil sector on carbon capture and storage (CCS) projects—another attempt to balance growth and net-zero goals AP News+2Financial Times+2arXiv+2.

• Consumers are increasingly skeptical of greenwashing; businesses must align sustainability claims with transparency and action LinkedIn.

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🔍 Summary for Canadian business leaders

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Canada FREEBusinessWorld.com’s Suniltams recommends leveraging these trends through proactive digital adoption, workplace upskilling, and targeted marketing to seize market opportunities & strengthen resilience.

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