Adapting to new rules will not be simple or quick, survey reveals
Confusion around Trump tariffs on Canadian goods escalated Thursday as the president confirmed the levies would come into effect next week, but White House officials suggested the timeline may be reviewed.
But for Canada’s small businesses, even a delay until April – when reciprocal tariffs are due to start – would not give them enough time to prepare for the impact according to the Canadian Federation of Independent Business.
“Our special survey on tariffs shows that over half of exporters expect it will take them more than six months to adapt to new markets and stabilize their operations. The uncertainty, coupled with ongoing inflationary pressures, is weighing down on small businesses, dampening their long-term outlook,” said Andreea Bourgeois, CFIB’s director of economics
The CFIB’s Business Barometer shows further weakening of sentiment among small business owners; the index fell for a third consecutive month in February to 49.5, the first time it has been below 50 in almost a year.
“The threat of tariffs kicking in after all is always in the back of the mind for many small business owners, affecting their long-term plans,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
Businesses said they are planning to hike prices by an average 3.1%, the highest since April 2024, while wage increases of 2.2% is down slightly.
Small business owners cited lack of demand as their biggest barrier to growth, while tax/regulations (67%), insurance (67%) and wage costs (61%) are their top cost constraints.
“Small firms operate on tight margins, and results from our special survey on the impact of US-Canada tariffs released earlier this month show that a majority are not prepared for the impact should the tariffs hit,” added Gaudreault.
Alberta (-3.6 points), British Columbia (-3.7), Manitoba (-3.4) and Ontario (-3.2) saw the biggest decreases in long-term sentiment according to the survey, and manufacturing (48.6), wholesale (46.5) and transportation (52.3), were also at the bottom of the 12-month confidence scale given their outsized exposure to the impact of tariffs.
