This is the first positive reading in the Canadian services PMI since last November, though it wasn’t exactly robust and the commentary in the report was poor:

• Latest prices data showed another round of steeply rising
  operating expenses, although competitive pressures meant
  the degree of cost pass through to clients remained relatively
  subdued.
• Suppliers were reported to
  be raising their charges
• Staffing levels
  also fell as firms generally chose not to replace any leavers
• new business declined for an eleventh month
  running
• Backlogs of work
  declined steeply whilst confidence in the outlook was again
  below trend

Paul Smith, Economics Director at S&P Global Market
Intelligence, said:

“October’s survey data signalled a return to (admittedly
marginal) growth of Canada’s service sector amid some
evidence of a stabilisation in the business environment.
However, whilst welcome, growth realistically failed
to make up for the sustained period of contraction
seen through much of 2025 and should be viewed in
the context of the continued uncertainty and client
hesitancy that still plagues market demand.

“Political and economic uncertainty, especially in
relation to trade policies, also continues to dominate
the outlook with confidence amongst firms remaining
sub-par in October. That helped to explain why
companies were again reluctant to replace any leavers,
especially given evidence of continued spare capacity
in the sector.

“Against this backdrop of soft employment and
economic activity trends, and with selling price
inflation remaining below trend, the latest PMI data
once again provide a timely reminder of why the Bank
of Canada loosened monetary policy again last week.”

The inflation commentary should make the Bank of Canada anxious. If they’re forced to reverse course and hike rates, it would certainly plunge the economy into a recession.