Business body and unions call on Ottawa to act swiftly to protect businesses and jobs
Canada’s small businesses are suffering from the US-Canada trade war, even without the potential wide-ranging tariffs.
The transient nature of tariff announcements, together with the absence of a firm timeframe for changes to domestic tax policy under the incoming Carney government, add to the confusion and uncertainty for businesses.
Almost two thirds of businesses polled by the Canadian Federation of Independent Business said they are already impacted by the trade war with the US, while a quarter are not yet impacted, and 12% are unsure. Those in manufacturing, wholesale, and transportation are most affected.
The CFIB is calling for parliament to be recalled, rather than wait almost another two weeks for the prorogation to end. It wants MPs to scrap the 19% carbon tax increase, ensure rebates are tax free, increase the lifetime capital gains exemption threshold to $1.25M and protect the Canadian Entrepreneurs' Incentive.
"We cannot wait until Parliament is back on March 24 to sort out the current mess and allow the ongoing uncertainty to drag on for any longer,” said Corinne Pohlmann, executive vice-president of Advocacy at CFIB. “Ottawa owes it to small businesses to provide some clarity and assurance in these turbulent times. The expansion of the EI Work-Sharing Program, announced as part of the federal support measures last Friday, could help businesses avoid layoffs during the uncertain times. But we're not so sure about the other supports.
The CFIB wants Ottawa to ensure that revenue from retaliatory tariffs goes to affected businesses ASAP, and to provide additional support for firms that rely on exports.
“Small businesses need help keeping doors open, not taking on more debt through loans," added Pohlmann. “One thing government could do is help offset high shipping costs for small firms looking to reach a new export market or a supplier outside of the US."
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.
Protect our jobs
Meanwhile, the Canadian Labour Congress is also calling on the federal government to take swift and decisive action to protect the economy and jobs as the trade war escalates.
Speaking after President Trump announced additional tariffs on Canadian steel and aluminum in response to Ontario’s electricity price hike for three US states – but before both measures were withdrawn – the CLC president Bea Bruske made an impassioned plea to lawmakers.
“This is spiraling out of control, and workers across Canada are rightfully alarmed. They are looking to their government for urgent and concrete measures to shield them from job losses and economic uncertainty," Bruske said.
Unions have written to Mark Carney urging his administration to take immediate steps to strengthen Employment Insurance, particularly for high earners who are now at risk of layoffs. The letter also calls for more investment in broadening and strengthening the economy, along with protecting jobs and public services.
"This trade war has exposed serious vulnerabilities in our economy, and it's workers who are bearing the brunt of the impact," Bruske added. "The government must move beyond stopgap measures and commit to real investments that safeguard livelihoods and build a resilient future."
