The long-term small business confidence level in Ontario has fallen to an all-time low at 23.4 points from 30.2 amid Canada’s trade war with the US, the Canadian Federation of Independent Business (CFIB) said in a media release.
Ontario’s current score – which is the second worst among the country’s provinces – is lower than its scores in the times of the financial crisis in 2008, the September 11 attacks in 2001, and the COVID-19 pandemic in 2020, the CFIB’s media release said.
The typical economic climate would see a score of about 60, considering the long-term (12-month) historical average of the CFIB’s Business Barometer® index, the media release explained.
“It’s impossible to make decisions on hiring, expanding and other operational matters against the backdrop of ever-changing tariffs,” said Julie Kwiecinski, the CFIB’s director of provincial affairs for Ontario, in the media release.
Apart from the issues with US tariffs, Canada’s agri-business industry is also dealing with Chinese tariffs on canola oil, peas, and oil cakes (100 percent), as well as pork and aquatic products (25 percent), the media release noted.
“To survive tariff uncertainty, businesses have to plan for the worst possible scenarios,” Kwiecinski said in the media release.
According to the CFIB, among small businesses in the province that responded to its survey:
- inadequate demand for their products and services was the biggest obstacle to sales or growth for the past 19 consecutive months
- 31 percent still have pandemic-related debt, with a median debt of $80,000
- 16 percent have plans to lay off within the next few months
- 11 percent are interested in hiring
- business confidence levels are lowest in the sectors of hospitality (17 percent), manufacturing (18.6 percent), transportation (21 percent), and agriculture (21.3 percent)
Small business tax
“Small businesses urgently need all the help they can get to weather this storm,” Kwiecinski stressed in the CFIB’s media release.
“The Ontario government can best help with measures like lowering the Small Business Tax Rate and increasing its threshold, and keeping the campaign commitment to provide $3B in Employer Health Tax and WSIB surplus funds relief as part of the province’s tariff mitigation measures,” Kwiecinski added in the media release.
The CFIB shared that it personally surveyed 1,812 small business owners during Ontario’s recent electoral campaign. Among the survey’s respondents, a lower small business tax rate emerged as the top priority for Ontario’s next government and the top measure to combat US tariff effects.
In its media release, the CFIB called on the provincial government to immediately lower this rate from 3.2 percent to two percent then gradually to zero percent. The CFIB also urged Ontario to raise the threshold to access the rate to at least $700,000 from $500,000 and index it to inflation annually.