PwC Canada’s 29th Annual CEO Survey paints a stark picture of Canadian business sentiment in January 2026. Confidence among Canadian chief executives has fallen sharply, diverging not only from last year’s outlook but from global peers as well. Geopolitical instability, looming CUSMA trade negotiations, and renewed uncertainty around U.S. trade policy are weighing heavily on executive decision-making, and the data suggests that hesitation around AI execution is compounding the problem.
Only 47 percent of Canadian CEOs now expect the global economy to improve over the next 12 months, compared with 61 percent globally. In the 2025 survey, 55% of Canadian CEOs expected global economic growth to improve, up significantly from just 31% the survey prior, and 42% expected Canada’s economy to grow, up from 25% the previous year. Those figures reflected cautious optimism in the face of trade and macro uncertainty. Confidence in the domestic outlook is even weaker. Just 27 percent of Canadian CEOs expect Canada’s economy to improve. This widening confidence gap signals a leadership class that is increasingly defensive at a moment when reinvention may be required.
Trade policy is a central concern. More than half of Canadian CEOs, 53 percent, cite U.S. trade policy as a major risk to their business, and 35 percent expect profit margins to decline as a result. With Canada’s economy deeply integrated with U.S. supply chains and demand, the possibility of renewed tariffs or restrictive trade terms is driving a cautious, cost-focused posture across sectors. “We’re worried about the US market,” one CEO we spoke with said, bluntly, asking not to have their name used. In other words, are going into headwinds, and it’s hard for executives to know how to interpret the data and the behaviour together.
That posture is reflected in how Canadian executives are approaching artificial intelligence. While experimentation is widespread, execution at scale remains limited. According to the survey, 94 percent of Canadian CEOs report having experimented with AI in some form. Yet only 29 percent have implemented AI at scale, well below the global average of 43 percent. The result is a growing execution gap between intention and impact. In the 2025 survey, 79% of Canadian CEOs planned to adopt AI within the next 12 months, trailing the global average but still a clear majority. Canadian executives also expected efficiency gains and profitability improvements from AI, though realized gains lagged expected ones.
The difference is not experimentation or awareness, but strategy. Just 37 percent of Canadian CEOs report having a defined AI roadmap, compared with 51 percent of global leaders. Without a clear plan for integration, governance, and value capture, AI initiatives tend to remain stuck at the pilot stage, delivering incremental efficiency gains rather than structural advantage. While not atypical (Canadian leaders tend to be slower to adopt new technology and more conservative than their global peers as a rule), it’s a little surprising given the significant role Canada has played in the genesis of AI and the startup landscape to date.
This gap also shapes how Canadian leaders perceive AI’s role. The survey finds that most Canadian CEOs still primarily view AI as a cost-cutting tool, focused on automation and efficiency. Globally, a larger share of CEOs are already positioning AI as a driver of new revenue, new products, and competitive differentiation. That framing matters. Cost-cutting can protect margins in the short term, but it rarely creates durable growth.
PwC’s report argues that closing this gap will require what it calls a “reinvention mindset.” In practical terms, that means moving beyond isolated use cases and embedding AI into core operating models, decision systems, and customer-facing processes. It also means treating AI as a strategic capability rather than a technology experiment delegated to innovation teams.
Ironically, nearly two-thirds of Canadian CEOs, 64 percent, say they are actively looking to enter new sectors, including areas such as defense and energy, in search of growth outside their traditional businesses. This is unprecedented, and reflects concern with stability of core business, while downplaying the opportunities AI could bring. Entering unfamiliar sectors without strong data, automation, and intelligence capabilities raises execution risk. “There’s so much instability that diversification seems like a reasonable strategy,” said the earlier quoted CEO.
What emerges from the data is not a lack of ambition, but a hesitation to commit. Canadian CEOs are clearly aware of the risks ahead, but many remain anchored to defensive strategies at a time when their global peers are already shifting toward offense. The result is a paradox: high awareness of disruption paired with low confidence in execution.
What stands out in this year’s survey is not just declining confidence, but a pattern of strategic dislocation. Canadian CEOs appear caught between caution and urgency, resulting in uneven decision-making. While leaders express concern about trade policy, margin pressure, and geopolitical risk, many are simultaneously signalling intentions to enter entirely new sectors in search of growth. In a stable environment, diversification can be a rational long-term strategy. In a volatile one, it often reflects uncertainty about how to defend existing positions rather than confidence in new opportunities.
This is particularly notable in a Canadian context, where executive culture has historically favoured incremental expansion, risk management, and deepening of core competencies. The survey’s finding that 64 percent of CEOs are looking to move into sectors such as defense and energy suggests not strategic conviction, but analysis paralysis, a state in which leaders acknowledge disruption but lack a clear path forward within their current operating models. Rather than committing to execution in known domains, decision-making becomes fragmented, oscillating between defensive cost controls and speculative growth initiatives.
The same pattern appears in AI adoption. High levels of experimentation alongside low levels of scaled deployment indicate hesitation, not rejection. AI becomes another area where activity substitutes for commitment. Pilot projects, proofs of concept, and exploratory investments create the appearance of progress without forcing hard choices about operating model change, governance, or risk ownership. In that sense, AI is less a driver of strategy than a mirror reflecting broader uncertainty.
Taken together, the data points to a leadership environment under strain. The challenge for Canadian CEOs is not simply whether to adopt AI or enter new markets, but how to regain strategic coherence in a period where external volatility is limiting clear signals. Until that coherence returns, erratic shifts between caution and expansion may continue, increasing risk rather than reducing it.