Top Risks for Canadian Businesses in 2025: Economic Concerns Dominate

Canadian business leaders are entering 2025 with a clear consensus on their biggest challenges, as highlighted in Marsh’s Global Risks Report 2025. Based on insights gathered from over 900 global leaders across business, government, and academia, the report underscores a strong focus on economic risks, with concerns about a prolonged economic downturn taking center stage.

What Is an Economic Downturn?

The report defines an economic downturn as a period of slow or near-zero global growth spanning several years or an outright global contraction, such as a recession or depression. Canadian leaders are particularly wary of such scenarios and the cascading effects they could have on the country’s economy.

Top Five Risks for Canadian Businesses

Economic challenges dominate the list of concerns for Canadian business leaders, but other pressing issues also made the cut. Here’s a breakdown of the top five risks identified in the report:

1. Economic Downturn
   The primary concern is the uncertainty surrounding global growth and the potential for prolonged stagnation or recession, which could significantly impact businesses and households alike.
2. Labour and Talent Shortages
   Closely following is the ongoing struggle to attract and retain skilled talent. Many industries are grappling with workforce shortages, which could hinder productivity and long-term growth.
3. Inflation
   Rising costs remain a significant worry. Persistent inflation continues to erode purchasing power and increase operational expenses for businesses, making it harder to maintain profitability.
4. Poverty and Inequality
   Wealth and income inequality are increasingly seen as critical challenges, not just from a social perspective but also as economic risks that could undermine long-term stability and growth.
5. Tied Concerns: Artificial Intelligence and Misinformation
   Two emerging risks share the fifth spot. First, the unintended consequences of artificial intelligence (AI), including job displacement and ethical concerns, are weighing on leaders’ minds. Second, the pervasive influence of misinformation and disinformation poses a threat to trust and decision-making across sectors.

Cross-Border Trade Tensions and Tariff Risks

Adding to the economic risks, Canada faces unique challenges due to its trade relationship with the United States. The Marsh report highlights potential vulnerabilities as the U.S. administration explores higher tariffs, which could disproportionately affect Canadian businesses. Restrictive trade measures, coupled with supply chain disruptions, higher costs, and delayed shipments, create additional layers of uncertainty for Canadian enterprises.

Insurance Implications of Economic Risks

Economic downturns often lead businesses and individuals to reduce their insurance coverage as a cost-cutting measure. With rising expenses across the board, some clients may view insurance as a discretionary expense and look for ways to scale back, potentially leaving themselves underinsured in the face of growing risks.

Preparing for the Future

Canadian business leaders must remain proactive in the face of these challenges. Whether it’s adapting to economic shifts, investing in workforce strategies, or mitigating the risks associated with emerging technologies and misinformation, businesses will need to develop resilience and agility. For the insurance industry, staying attuned to these risks is critical to helping clients navigate an increasingly complex landscape.

As 2025 unfolds, the alignment of Canadian leaders on these key risks highlights the urgency of addressing both long-standing economic concerns and emerging challenges in an interconnected world.

Jenny is a business insurance broker with Waypoint Insurance. She can be reached at 604-317-6755 or jhansen@waypoint.ca. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

Jenny Holly Hansen is a cohost with Chris Sturges of the Langley Impact Networking Group. You are welcome to join us on Thursday’s from 4pm to 6pm at: Sidebar Bar and Grill: 100b - 20018 83A Avenue, Langley, BC V2Y 3R4

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