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Or sign-in if you have an account.U.S. President Donald Trump greets Canadian Prime Minister Mark Carney during a summit on Gaza in Sharm el-Sheikh on Oct. 13, 2025. (Photo by EVAN VUCCI/POOL/AFP via Getty Images)Confidence among businesses in rural and small-town Ontario during the second quarter reached its highest level in a year, a sharp contrast to the more sombre outlook among their urban counterparts, according to a new survey on business conditions by Statistics Canada.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorClose to 80 per cent of businesses in rural areas reported being either very or somewhat optimistic about their future outlook over the next 12 months, according to the agency, up from 64.2 per cent in the last quarter of 2025 and higher than the 59.9 per cent of urban-based businesses that shared the same positive outlook.Though the survey doesn’t specify the reasons behind businesses’ perceptions, Audra Bowlus, an economics professor at Western University said several factors could be at play to explain the divide, including differences in business composition between rural and urban areas as well as how different sectors may be exposed to trade tensions with the United States.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. 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Please try again“We know that Ontario’s been hit particularly hard by some of these tariffs (but) most rural areas don’t have big manufacturing bases that would be doing a lot of trade (with the U.S.) and be exposed or affected by the uncertainty created by the trade war,” she said.Sectors such as auto and manufacturing, key economic drivers in Southwestern Ontario, have been hit with punitive tariffs by the U.S., but the vast majority of Canadian products going into the U.S., including natural resources and agricultural products that are produced in rural areas, remain exempt from levies under the Canada-U.S.-Mexico Agreement (CUSMA), Bowlus said.For example, 55.4 per cent of Ontario manufacturers and 46.8 per cent of businesses in transportation and warehousing had a positive outlook, significantly lower than the 79 per cent in mining and extraction and 71.1 per cent in agriculture.But Bowlus said the positive outlooks could shift in the coming months since Statistics Canada’s survey was done before the latest round of threats coming from south of the border.U.S. President Donald Trump last Wednesday said he wasn’t looking to renew CUSMA, which has a July 1 deadline. If the trade deal isn’t renewed by then, it will remain in place until 2036 with annual reviews.The uncertain future of the deal will likely continue to weigh heavily on business sentiment, which has been trending lower over the past 12 months, Chris Johnston, chief of special surveys with Statistics Canada, said.Though the combined positive outlook for businesses across the country sat in the 70 per cent to 75 per cent range before trade tensions began, that figure has been hovering around 67 per cent now, he said.But CUSMA isn’t the only issue impacting Canadian businesses, according to the survey. Rising costs and inflation, including those created by higher oil prices due to the war in Iran, labour shortages and businesses’ ability to recruit and retain skilled workers, were listed by businesses as some of the biggest obstacles for growth in the coming months.“I don’t think it’s a big surprise to say that, especially over the last year with some of the trade tensions, it’s been a bit of a more difficult time for businesses,” Johnston said.“Nonetheless, the fact that we’re still seeing roughly two-thirds of businesses say that they are very optimistic or somewhat optimistic speaks to the resiliency of businesses and their ability to adapt and find ways to solve some of the challenges and problems that they’re facing at this point in time.”jjuha@postmedia.com Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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