Independent Growth: Andreea Bourgeois on Canada’s 3.2 % GDP Surge

Author(s): Scott Douglas Jacobsen

Publication (Outlet/Website): Personal SubStack

Publication Date (yyyy/mm/dd): 2025/02/22

Andreea Bourgeois, Director of Economics at the Canadian Federation of Independent Business (CFIB), discussed Canada’s projected Q1 2025 GDP growth rate of 3.2%, CFIB’s Business Barometer, and the importance of small business sentiment data. She emphasized historical trends, labour shortages, investment rebounds, and potential tariff impacts. Bourgeois highlighted CFIB’s survey methodology and economic modelling, offering a unique perspective on Canada’s economic landscape. The conversation concluded with insights into trade dependencies and economic uncertainty.

Scott Douglas Jacobsen: Facts for the bio too. Today, we’re here with Andreea Bourgeois, the Director of Economics at the Canadian Federation of Independent Business (CFIB). She currently works with CFIB’s Research and Atlantic Legislative teams to conduct surveys and research on various economic and social issues affecting small and mid-sized businesses.

She joined CFIB in 2000 and has authored numerous reports on topics such as the shortage of skills and labour, demographic trends in Atlantic Canada, and, most recently, cyber fraud. She is also responsible for the Monthly Business Barometer, which measures small business optimism.

She earned a Bachelor of Arts in Economics from the Academy of Economic Studies in Bucharest, Romania, with a concentration in international economic relations. She also earned a Master of Science in Administration from HEC Montréal, specializing in international business and statistics.

Thank you for joining us today.

Andreea Bourgeois: Thank you for having me.

Jacobsen: You’re welcome. Regarding the Canadian economy, based on CFIB’s quarterly report, what is the projected growth rate for the first quarter of 2025?

Bourgeois:
Can I provide some background first? I could simply quote a number and move on, but just giving a number is like asking if a restaurant is good and only hearing “yes” without any explanation. You’d want to know why it’s good, what’s on the menu, and what makes it stand out. Economics is similar — you need more than just one number to understand the full picture.

To answer your question, we projected a GDP growth rate of 3.2% for the first quarter of 2025. Our projection for Q4 2024 was also 3.2%, while Q1 2024 was 2.5%.

What I want to highlight — just as when you look at a menu — is that these figures are higher than what we have seen in recent post-pandemic quarters.

After the pandemic, Canada’s GDP growth rate at one point was zero. We even had one-quarter of slightly negative growth.

Following that, as the economy began recovering, quarterly growth rates were typically between 0.7% and 1.2%, which was relatively weak. However, this time, both Q4 2024 and Q1 2025 are projected to show stronger growth.

Now, let me put these numbers into perspective. It’s like asking if a restaurant is good — yes, but how much does the food cost?

Let’s discuss what these numbers actually mean. These projections are based on CFIB’s own economic forecasts. We work with an external Montréal-based firm that specializes in macroeconomic modelling.

They use data from our Monthly Business Barometer survey, which gathers insights directly from small business owners. In a way, this is like a fusion dish — it combines different elements.

There are many different growth projections available. Statistics Canada (StatsCan), for example, has its own projections based on mandatory business and labour force surveys.

These surveys provide reliable macroeconomic data, but our projections incorporate real-time insights from small businesses, giving a more detailed perspective on current economic conditions.

Bourgeois: We don’t conduct mandatory surveys. However, as the Canadian Federation of Independent Business (CFIB), we have 100,000 members across Canada. We are represented in every province, across all sectors of the economy, and in every region — including Nunavut, the territories, the Atlantic provinces, the West Coast, and the Prairies.

Once a month, we survey a randomly selected portion of our membership — not everyone — because we want to be mindful of the survey burden and respectful of our members’ time. We ask about their business optimism, their expectations for the next 12 months and three months, and the current state of their business.

This survey is focused on business sentiment, similar to the way you wake up in the morning and think, “I’m going to have a good week.” We don’t follow up with detailed financial questions like, “What are your exact sales? Take out your ledgers and provide the numbers.” Instead, we focus on the gut feeling business owners have about their operations.

Over time, as we aggregate responses from thousands of business owners, these individual perspectives become a powerful economic indicator. This data, combined with macroeconomic indicators, is fed into a statistical model developed by our external research partner.

This model is also used by the Bank of Canada, and it helps generate economic projections. I wanted to clarify this because CFIB’s business optimism data is the only economic modeling in Canada based on small business survey data. No other organization does this.

Jacobsen: What do you think would make this methodology more robust than just relying on business owners’ gut feelings? To use your analogy, it’s like saying, “I feel like I’m going to have a great day because I anticipate eating at a high-end Japanese restaurant this quarter.”

Bourgeois: Let me give you some history of the survey, which demonstrates its robustness.

This survey predates my time at CFIB — in fact, it started before I even moved to Canada. Initially, it was conducted once a year and had a different name: the Harp Act survey. At that time, it was distributed by mail, requiring business owners to:

1. Open the survey,
2. Read the questions,
3. Fill out the checkboxes,
4. Place it in an envelope,
5. Pay for postage,
6. Walk to the post office,
7. And mail it back to CFIB.

Despite this cumbersome process, we received between 5,000 and 10,000 responses annually. Eventually, the survey became a monthly initiative, analyzed at CFIB’s head office. I worked in CFIB’s Research Department in Toronto, where we reviewed the data and generated projections.

However, at that time, we didn’t yet use an econometric model — so there was still a strong reliance on business sentiment.

That changed when we started integrating specific business metrics, including:

• Optimism levels for the next 12 and three months,
• Staffing plans,
• Operational strategies,
• Pricing strategies,
• Wage projections,
• Supply chain challenges.

This evolution strengthened our economic forecasting, making it more reliable and data-driven while still capturing the real-time experiences of small business owners.

We didn’t ask business owners, “What is your supply chain?” — that’s not terminology they typically use. Instead, we asked them about their inventory levels, their stock availability over time, and their major costs and business limitations. At the time, the survey was several pages long, as I mentioned earlier. That was well before my time at CFIB.

If you recall, during the September 11 attacks in 2001, the Bank of Canada anticipated a recession. The assumption was that the economic fallout from the attack on the Twin Towers would trigger a full-scale recession in Canada, leading to a potential economic crash.

In response, the Bank of Canada wanted to adjust interest rates to stimulate the economy. This happened to coincide with one of our CFIB surveys. At that time, our Chief Economist in Toronto received a call from the Governor of the Bank of Canada, who asked, “What are you hearing from small businesses?”

What we heard was very different from the panic on Bay Street. While the financial sector was experiencing turmoil, Main Street businesses were still operating. The Governor then asked, “Do you have survey data to back this up, or is this just anecdotal?” Because we are a grassroots organization, we were able to quickly adapt.

We took a few key questions from our survey and sent them via fax — which, at the time, was considered cutting-edge technology — using the same methodology and the same questions but running them weekly for six weeks.

This initiative led to the creation of the CFIB Business Optimism Index, which was based on business expectations for the next 12 months. The results showed that optimism remained stable, despite a temporary drop due to uncertainty. Naturally, the global situation created anxiety, but businesses were not shutting down.

For example:

• Hair salons were still operating.
• Coffee shops continued selling coffee beans.
• Laundromats remained open.

At the end of six weeks, after an intense period of data collection, our Toronto team decided it was time to return to normal life — no more sleeping bags at the office. But we learned something critical: There was an enormous demand for real-time small business data.

Statistics Canada (StatsCan) had valuable data, but it was always three years behind. By the time government agencies or policymakers received the data, the economic landscape had already changed. Because of this, we shifted the survey to a quarterly format, running it quarterly until 2009.

However, by 2009, the economy had changed. Technology had improved, and our members had widespread internet access, so we transitioned the survey to a fully online format and began running it monthly.

No more paper. No more fax machines. This survey has a long history — it predates my time at CFIB, and I’ve been here for 25 years. It is strong and robust.

If you visit our CFIB website, you’ll see that we track business optimism over time. But looking at today’s index alone — which is 56.4 — isn’t enough. That’s like saying, “I paid $20 for a meal” without knowing what meal it was, how much it cost yesterday, or what it cost last week. The number alone doesn’t tell the full story.

What matters is that we have 15 years of historical data, allowing us to contextualize trends.

For example, today’s optimism level is higher than during the pandemic, but — let’s be honest — no one is measuring against pandemic-era lows.

Much lower than it was in November and much lower than it could have been if we weren’t dealing with tariff threats and political uncertainty from Ottawa.

I wouldn’t call it a freefall, but optimism has declined sharply since November.

Depending on what happens on February 1st, the February optimism reading could see another steep decline. Unfortunately, optimism is already quite low.

When we run projections for economic growth, we base them on survey data from the last quarter of 2024, which includes October, November, and December.

That said, as with any mathematical model, there are limitations. Economic projections, no matter how robust, can’t account for unpredictable factors — such as what happens on social media, what a president announces, or sudden political resignations.

In other words, political changes do not factor into economic models, no matter how much we wish they did.

Will our projections be accurate? I certainly hope so. But personally, I have doubts that the Canadian economy will maintain a strong growth rate if we face new tariffs next month.

I just wanted to put that in perspective. The numbers are correct, but keep in mind that our projections are based on survey data collected before the latest tariff threats and before the federal government announced an election.

Jacobsen: Even when you were conducting the paper-based survey, your sample size per month was 5,000 to 10,000. So you were bringing in 60,000 responses per year?

Bourgeois: That was a long time ago. The survey wasn’t open indefinitely — we typically kept it open for about six weeks. If a business owner hadn’t responded within that time, the chances of receiving their response were very low.

At that point, we had to begin analyzing the data manually. Although we had statistical software, we still relied on a dedicated research team to process responses. Each survey had to be coded and entered into a database before analysis.

Back then, I can’t give you an exact response rate, but I know for sure that when we moved to a monthly format in February 2009, our sample size was typically around 1,400 responses per month.

Over time, that number declined for various reasons. Before the pandemic, we were receiving around 800 responses per month. Survey participation tends to drop in the summer months, which is common across all survey organizations. Then the pandemic changed everything.

During the early months of COVID-19, business owners suddenly had more time and a greater need for information. We responded by running the survey twice a month, and participation skyrocketed — we were receiving about 2,000 responses every two weeks.

There was an enormous demand for survey data during the pandemic. Governments needed real-time insights to understand:

• How businesses were coping,
• What financial support was needed,
• Which industries were most affected.

We combined this survey with another one, using it as a liaison tool between small business owners and government policymakers.

Many businesses were shut down, but expenses like heating, rent, and property taxes were still due. At the same time, revenues had disappeared, and staff were no longer coming in to operate stores or provide services.

Through our survey, we were able to convey the urgent needs of businesses to policymakers. After the pandemic, as the economy reopened, participation returned to pre-pandemic levels. For example, in January, we received 1,037 responses.

Today, in fact, we released the January edition of the Business Barometer. Our next set of economic projections will be released in April, based on survey data from January, February, and March.

License & Copyright

In-Sight Publishing by Scott Douglas Jacobsen is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. ©Scott Douglas Jacobsen and In-Sight Publishing 2012-Present. Unauthorized use or duplication of material without express permission from Scott Douglas Jacobsen strictly prohibited, excerpts and links must use full credit to Scott Douglas Jacobsen and In-Sight Publishing with direction to the original content.