Published 23 Oct 2026
Fewer Firms Fear a Recession, but Hiring Stays Soft: What the Bank of Canada's Q3 Business Survey Means for Your Income
Business sentiment improved, then slipped again after trade talks broke down. Here is what that means for wages, prices and your plan.
The Bank of Canada's Business Outlook Survey for the third quarter of 2026, published October 19, shows a more hopeful business community than in the spring, but one that is wary again after Canada-U.S. trade talks broke down on August 21. For households, the survey is a useful preview of wages, hiring and the prices you will pay.
Key takeaways
The share of firms planning for a Canadian recession over the next 12 months fell from 17% to 6%, the lowest since the question was added in 2023, though later responses show sentiment weakening.
Hiring intentions remain soft. Most firms expect to keep headcount unchanged, and some plan to use automation to meet higher demand.
Wage growth expectations are roughly unchanged, with cost-of-living adjustments the main driver.
Price expectations eased from Q2 but remain elevated because of high oil prices and trade tensions, and roughly half of firms plan to pass on some or all of their tariff- and Middle East-related cost increases.
What it means for your finances
Wage growth that mostly tracks the cost of living means real raises may be modest, so a projection that assumes your pay outpaces inflation could be too optimistic. Meanwhile, if about half of firms pass costs along, expect some of those increases to show up in store prices, which pressures your monthly expenses.
Modeling it in AffordaFlow
Set your income growth close to expected inflation rather than above it, and run a second scenario with higher expense growth for goods affected by tariffs and energy. Comparing the two shows how much cushion your plan really has. If your employer is in a trade-exposed sector, add a scenario with delayed raises or reduced hours.
Source: Bank of Canada, Business Outlook Survey, Third Quarter of 2026