Amid the widespread business disruption caused by US-Canada tariffs, almost half of small businesses in Canada do not consider the US a reliable trading partner, the Canadian Federation of Independent Business (CFIB) has revealed based on new survey data.
“Small business optimism is at historically low levels,” said Dan Kelly, the CFIB’s president, in a media release.
“Businesses need more certainty, it’s simple as that,” said Simon Gaudreault, CFIB’s chief economist and vice president of research, in the media release. “As one business owner told us, the unpredictability of the current situation is making surviving the pandemic look like a walk in the park.”
Due to the disruption, Canada’s small business owners have been shifting their suppliers and investments to non-US domestic and international markets, promoting Canadian-made products, delaying or cancelling expansions, and considering international alternatives, revealed the CFIB’s research.
“As we gear up for the April 2 reciprocal tariffs, no one knows where the U.S.-Canada trade war is heading in the long term,” Gaudreault said in the media release. “For some businesses, making drastic changes is not feasible, but others are taking actions to offset the current impacts.”
Survey results
According to the CFIB’s media release, among small business owners surveyed:
- Almost 90 percent are struggling with business planning even though 70 percent support Canada’s retaliatory tariffs
- About 30 percent are confident that the actions that they have been taking will help them offset the trade war’s fallout
- 33 percent plan to restrict efforts in the US in the next six months
- 32 percent of business owners have shifted to suppliers or markets in Canada
- 27 percent intend to increase their investment in Canada
“With the federal election now underway, we’re calling on all political parties to include small business policies in their platforms,” Kelly said in the CFIB’s media release. “That includes commitments to eliminating remaining internal trade barriers and reducing the tax burden on small businesses.”
The CFIB’s media release shared that, among survey respondents:
- Half would appreciate government support in dealing with paperwork relating to the Canada-United States-Mexico Agreement (CUSMA), given that 30 percent of exporters are uncertain about whether they comply with the CUSMA
- Almost a third of exporters use the de minimis rule, which permits companies to export a maximum of US$800 in goods to consumers without needing to pay duties and tariffs
The CFIB’s media release noted that the de minimis rule may be phased out.
“We need to instill confidence in business owners and strengthen our economy if we want to get through the next few uncertain months,” Kelly said in the media release.
The CFIB began its survey relating to the trade war on Mar. 13 and shared the results as of Mar. 20, based on nearly 3,000 responses from its members.