Confidence among Canadian small business owners has fallen to its lowest level in four years, according to Zensurance’s latest Small Business Confidence Index.
Only 58% of respondents expressed optimism for the remainder of 2025, down from nearly 70% in 2024, as inflation and rising operating costs continue to weigh heavily on the sector.
One of the more concerning findings for the insurance sector is a 24% decline in the number of small businesses maintaining coverage. For brokers and carriers, this signalled shrinking premium volumes in a segment traditionally seen as a growth opportunity.
The survey, based on responses from more than 1,000 small business owners and independent professionals nationwide, points to a fragile outlook.
Almost two-thirds (62%) said the economy is hurting their business, citing higher expenses and softer demand. Just 3.7% reported strong revenue growth, an 81% decline from last year, while more than half said revenues were flat.
Zensurance noted that Canadian small business confidence is eroding as entrepreneurs struggle to keep up with rising costs, shifting markets, and policy shocks while attempting to stay afloat in a tougher economy.
According to the survey, many owners are dropping insurance policies out of necessity rather than preference. This leaves them exposed to potential disruption at a time when risks are elevated. The pullback could increase uninsured losses in the event of claims, while also limiting insurers’ ability to spread risk across a broad base of small accounts.
For insurers, the challenge is balancing pricing discipline in a high-inflation environment while keeping coverage accessible to smaller firms. Brokers may face added pressure to demonstrate value and help clients navigate cost trade-offs without leaving themselves unprotected.
Finally, the survey also underscored the importance of microbusinesses in Canada’s economy. Nearly two-thirds of respondents operate solo, while another 37% employ teams of just two to four people. Top sectors include professional services, retail, e-commerce, hospitality, and trades.
Zensurance pointed out that these figures highlight the everyday realities of Canadians working to build businesses, stressing that the data reflects their experiences and should not be overlooked.
