FreshBooks 2025 Ontario Small Business Snapshot: Owners More Reserved Than U.S. Peers, but Most Say Their Businesses Are Stable

Ontario survey data shows lower optimism and higher interest-rate sensitivity than U.S. counterparts, while operating conditions stay steady for most businesses

TORONTO — January 27, 2026 — Ontario small business owners are entering 2026 with a more reserved outlook than their U.S. counterparts, reflected in lower economic optimism, softer financial sentiment, and greater sensitivity to interest rates, according to a new Ontario snapshot from FreshBooks’ 2025 State of Small Business Survey.

Based on responses from small business owners and solo operators in Ontario, the data shows lower confidence relative to the U.S., alongside steady day-to-day operations for most businesses as owners navigate ongoing economic pressure.

Overall sentiment in Ontario is restrained. Just 23% of Ontario respondents said they feel optimistic about the economy, compared to 38% of U.S. small business owners. At the same time, 69% of Ontario respondents said they are doing just fine, indicating stability despite a more reserved outlook.

This cautious outlook extends to financial sentiment as well. 41% of Ontario respondents rated their financial health as positive, compared to 56% of U.S. respondents. Ontario business owners were also more likely to say their financial situation is worse than a year ago, at 31% versus 23% in the U.S.

Key Ontario findings include:

• Lower economic optimism, with 23% of Ontario respondents reporting optimism compared to 38% of U.S. small business owners.
  
• More reserved financial sentiment, with 41% of Ontario respondents rating their financial health as positive compared to 56% in the U.S., despite 69% of respondents saying they are “doing just fine.”
  
• Greater sensitivity to interest rates, with a lower percentage of Ontario owners reporting no major impact from rate increases (25% vs. 32% in the U.S.).
• Inflation pressures are broadly in line with the U.S., with roughly 26% of Ontario respondents reporting higher input costs 

“Ontario small business owners are taking a measured approach as they navigate ongoing economic pressure,” said Faye Pang, Chief Growth Officer at FreshBooks. “What we see in the data is lower optimism paired with steady decision making. Many owners are focused on managing costs, protecting their time, and being thoughtful about when and how they invest in growth.”

Interest rates appear to weigh more heavily on Ontario businesses. Compared to U.S. respondents, fewer Ontario owners said rate increases had no major impact on their business. More reported increased stress tied to their work and greater difficulty staying financially stable, pointing to greater sensitivity to borrowing costs.

On inflation and trade, Ontario businesses reported increases in input costs, broadly in line with what was seen in the U.S., with roughly 26% citing higher expenses. However, Ontario respondents were slightly more likely to report making no major changes in response to inflation. When changes were made, raising prices was the most common response in both regions, though Ontario businesses tended to take a more conservative approach overall.

Despite this more reserved position, most Ontario business owners remain committed to their businesses. The findings point to a small business environment defined by stability and restraint, with owners balancing uncertainty against the need to remain operational, competitive, and financially prepared.

The Ontario snapshot is part of FreshBooks’ broader 2025 small business research program. The published FreshBooks 2025 State of U.S. Small Business Report is based on U.S. findings, while this release highlights results from a dedicated Ontario sample.

About the research
FreshBooks’ 2025 small business research is based on surveys conducted in August 2025, including a U.S. sample of approximately 750 small business owners and solo operators and an Ontario sample of approximately 250 small business owners and solo operators. The Ontario study examined financial and economic sentiment, challenges, and areas of positivity among some daunting economic headwinds. Margin of error: +/-6.2% at a 95% confidence interval.

About FreshBooks

FreshBooks is a leader in small business management software, purpose-built to help small business owners simplify the financial complexity of running their business—from invoicing and expenses to payroll and payments—bringing together the tools they need to manage finances, save time, and stay organized. Headquartered in Canada, FreshBooks supports small business owners around the world. Follow FreshBooks on social media: LinkedIn | Instagram | Facebook | X.

Press Contacts

FreshBooks 

Chloe Matcham, Senior Manager, Communications 

chloe.matcham@freshbooks.com