Canadian small business sales up for four months straight, a glimmer of hope after a tough 18 months

Toronto, ON. — October 29, 2026 —Xero, the global small business platform, today released its quarterly Xero Small Business Insights (XSBI) report, a snapshot of the health of the Canadian small business (SMB) sector based on actual aggregated and anonymized data from 12,000 Canadian small businesses using Xero, including sales performance, late payments, and time-to-be-paid.

The latest XSBI data shows Canadian small businesses had one of their better quarters in recent times, with sales up 2.0% year-over-year in the September quarter and four consecutive months of growth. While results remain well below the historical average, they offer early signs of recovery after a difficult 18 months, even as US trade tensions and elevated fuel prices continue to weigh on conditions. Payment times were largely unchanged at 10.5 days late on average (10.8 days in the June quarter), and Canada continues to have the longest late payment times of the countries tracked by XSBI.

“Four months of growth is encouraging, but sales are still well below historical levels, so it’s too early to call this a recovery,” said Ashalee Mohamed, Country Manager for Canada at Xero. “With ongoing trade tensions with the US and higher-than-normal fuel prices, many small businesses are still facing tough trading conditions. Now is a good time for owners to review their pricing, check where costs are creeping up and make sure that they have a clear view into their cash flow so they’re ready to act if pressure builds in the coming months.”

Four consecutive months of sales growth

Canadian small business sales rose 2.0% year-over-year (y/y) in the September quarter, following an upwardly revised 0.4% y/y rise in the June quarter. It is the first time sales have grown for four consecutive months since April to July 2025.

Monthly results showed a 3.0% y/y rise in July, a 2.5% y/y rise in August and a 0.5% y/y rise in September. While these results remain well below the historical average of 4.0% y/y sales growth, they follow many months of declining sales and point to some improvement in performance.

“After what has been a really difficult 18 months for Canadian small businesses, this growth is welcomed,” said Louise Southall, Economist at Xero. “These are still tepid results, and Canada continues to trail the other countries we track on sales growth, but there are some early signs of recovery. Alberta is doing a lot of the heavy lifting thanks to higher oil prices, and without it the national picture would probably look a lot worse. The US-Canada trade conflict remains the key factor behind these results, and I don’t see that changing any time soon.”

Payment times little changed

Canadian small businesses were paid on average 10.5 days late in the September quarter, similar to the June quarter (10.8 days). Time to be paid, the length of time from when an invoice was issued to when it was paid, was 28.4 days, compared to 28.2 days in the June quarter, largely due to a 29.8-day result in September. Canada continues to have the longest late payment times of the countries tracked in XSBI.

Regional picture: Alberta leads as B.C. lags

Sales results for the September quarter were:

• Alberta (+5.9% y/y) was the best performing of the regions tracked, benefitting most from higher global oil prices.
• Ontario (+2.2% y/y) improved from the June quarter (+0.8% y/y), and could have been higher if not for a 1.7% y/y decline in September.
• The Maritime Provinces (-1.4% y/y) had lower sales than a year ago, largely due to a 9.5% y/y fall in July.
• British Columbia (-2.6% y/y) recorded lower sales than a year ago in every month of the quarter. However, B.C. remains the fastest place for small businesses to be paid (24.6 days).

The other provincial results on time to be paid for the September quarter were 28.0 days (Alberta), 28.9 days (Ontario) and 33.7 days (Maritime Provinces). Alberta’s result was pushed up by a rise to 34.1 days in September, its longest payment time since August 2023, which may be revised as more data becomes available.

Trade tensions hit exporter confidence hardest

The impact of renewed US trade tensions is falling hardest on small businesses that trade internationally. The Canadian Federation of Independent Business (CFIB) September Business Barometer found no statistical difference in 12-month confidence between exporters, importers and non-traders in September 2024. By September 2026, exporters reported a confidence score of 38.6 points, compared to 43.5 points for importers and 52.2 points for businesses not active internationally.

“No one wins from tariffs,” added Southall. “Consumers on both sides of the border pay more for the same goods, and exporters find it harder to make a sale against products that don’t carry the same tariff. The obvious response for Canadian exporters is to find new markets, but that takes time and isn’t a costless exercise. And it’s not just Canadians feeling it. US businesses near the border are feeling the effects too.”

To access the latest data, visit xero.com/xerosbi.

ENDS

Media Contact

Xero Canada

Rola Tfaili

rola.tfaili@xero.com

About Xero

Xero is a global small business platform and a trusted financial operating system for the AI era. Xero’s purpose is to make life better for people in small business, their advisors, and communities around the world. By unifying core financial operations (including accounting, payroll and payments) underpinned by insights and a robust ecosystem into autonomous workflows, we empower 5 million small businesses and accountants and bookkeepers across 180+ countries to move from managing records to making informed decisions. For further information, please visit xero.com.

About Xero Small Business Insights

The aim of Xero Small Business Insights is to create insights to help inform decision makers in support of the small business economy as a whole. The principal source of small business insights in this report is customer data from Xero, a small business platform that supports online accounting and a range of other applications. Xero is a responsible custodian of our customers’ sensitive data and does not release any data that could identify individual businesses. The data used is aggregated and anonymized to ensure the privacy of Xero subscribers, and their counterparts.

As part of the program, we publish regular blogs and research notes and deep-dive special reports on specific small business topics. These can all be found at xero.com/xerosbi.

Methodology

Changes were made to the XSBI methodology in 2025. This includes changing the definition used for a small business and the way we identify regional-based businesses. Full details of the methodology used to construct Xero Small Business Insights can be found here.