Canadian small business sales rise 2% as Alberta leads

Canadian small business sales rose 2.0% year on year in the September quarter, according to new data from Xero, marking a fourth consecutive month of annual growth.

The figures point to a modest improvement after a prolonged weak period, though sales growth remained well below the historical average of 4.0%. Monthly growth was 3.0% in July, 2.5% in August and 0.5% in September, following an upwardly revised 0.4% rise in the June quarter.

Xero's data is based on aggregated, anonymised information from 12,000 Canadian small businesses using its platform. The report tracks sales performance, late payments and time-to-be-paid across the sector.

A regional divide shaped the latest quarter. Alberta recorded the strongest sales growth, up 5.9% year on year, while Ontario posted 2.2% growth. By contrast, the Maritime Provinces reported a 1.4% decline and British Columbia saw sales fall 2.6% from a year earlier.

Higher global oil prices helped Alberta and lifted the national result, the report found. Ontario improved from 0.8% growth in the June quarter, although sales in the province still fell 1.7% year on year in September alone.

British Columbia was weak throughout the quarter, with sales below year-earlier levels in every month. The Maritime Provinces were also dragged down by a sharp 9.5% fall in July.

Ashalee Mohamed, Country Manager for Canada at Xero, said conditions remained difficult for many firms despite the recent improvement. "Four months of growth is encouraging, but sales are still well below historical levels, so it's too early to call this a recovery.

"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 they have a clear view of their cash flow so they're ready to act if pressure builds in the coming months."

Payments pressure

Payment performance changed little in the quarter. Small businesses were paid an average of 10.5 days late, compared with 10.8 days in the June quarter. Time-to-be-paid, which measures the period from invoice issue to payment, edged up to 28.4 days from 28.2 days.

Canada still had the longest payment times among the countries tracked in the Xero series. Within Canada, British Columbia remained the fastest region for payment at 24.6 days, while the Maritime Provinces were the slowest at 33.7 days.

Alberta's time-to-be-paid was 28.0 days for the quarter, but that figure was affected by a rise to 34.1 days in September, its longest payment time since August 2023. Ontario recorded 28.9 days.

Louise Southall, Economist at Xero, said the latest growth figures should be treated with caution. "After a really difficult 18 months for Canadian small businesses, this growth is welcome.

"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 much worse. The US-Canada trade conflict remains the key factor behind these results, and I don't see that changing any time soon."

Trade impact

The report also pointed to a widening confidence gap between exporters and businesses focused on the domestic market. Data from the Canadian Federation of Independent Business showed exporters had a 12-month confidence score of 38.6 points in September 2026, compared with 43.5 points for importers and 52.2 points for businesses not active internationally.

That marks a notable change from two years earlier, when there was no statistical difference in confidence between exporters, importers and non-trading firms. The figures suggest renewed trade tensions with the US are weighing more heavily on businesses exposed to cross-border commerce.

Southall said tariffs were creating pressure for businesses and consumers on both sides of the border. "No one wins from tariffs.

"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 costless. And it's not just Canadians feeling it. US businesses near the border are feeling the effects too."