The S&P Global Canada Services Business Activity Index rose to 48.3 in September 2026 from 46.8 in August, remaining below the critical 50.0 no-change mark. Canada’s service sector continued to face a challenging business climate, with activity and new business falling at slower rates amid uncertainty over tariffs and the war in Iran. Tariffs and elevated energy prices also drove a sharper increase in operating costs, but strong competitive pressures limited firms’ ability to pass these costs on to clients, with output price inflation falling to a seven-month low. Staffing levels declined in response to weaker activity and new business, exacerbated by difficulties finding suitably skilled workers. However, firms became more confident about the outlook, with sentiment reaching its highest level since April.