TORONTO – Nearly one in five small- and medium-sized businesses (SMEs) are experiencing cancelled or paused orders due to the ongoing uncertainty around the U.S.-Canada tariff situation, finds new data by the Canadian Federation of Independent Business (CFIB).
“The uncertainty around tariffs is almost as damaging as tariffs themselves. It reverberates among business owners right now and businesses are adjusting operations on the fly as a result,” said CFIB’s chief economist and vice-president of research, Simon Gaudreault in a press release. “While we may have a few weeks of reprieve, there is still concern about the long-term impact of tariffs on small businesses.”
According to CFIB, 54 per cent of SMEs say they don’t feel prepared for the impacts of U.S.-Canada tariffs. CFIB data also claims that:
- 24% are looking to delay expansion plans,
- 20% are looking to reduce workforce/hours,
- 45% of small firms are looking for new suppliers to address the tariff situation,
- 62% can pass on costs to customers or clients at varying levels if U.S.-Canada tariffs are imposed.
“Some firms may change their business models and find new markets, but it’ll take some time. Many exporters though are telling us it will be a major struggle to pivot, and they’ll have to decide whether to lay off staff, remain in Canada or explore other markets,” said Gaudreault.
“In some sectors, like retail, many businesses are indicating they’ll be forced to pass on increased costs to customers. Others, like in the agri-business sector, report they will be forced to eat most of the increased costs. Overall, small business owners are sending a clear message that U.S. tariffs and Canada’s retaliatory measures will add further financial strain on businesses and Canadians alike.”
According to CFIB, 81% of small firms said they want Parliament recalled to deal with the tariff threat. in response to that, CFIB is calling for Parliament to immediately reconvene to do the following:
- stop the April 1 carbon tax increase;
- pass legislation to make sure carbon tax rebates for small businesses are tax free; and
- pass proposed legislation to increase the lifetime capital gains exemption threshold to $1.25M and ensuring the Canadian Entrepreneurs’ Incentive stays in place.
Small business owners wishing to share their thoughts and experiences can visit cfib.ca/tariffs.
