Canadian small businesses already feel tariff pinch

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Most Canadian small businesses are feeling the pinch due to Canada’s trade war with the United States, but it could get worse in short order.

Sixty-two per cent of Canadian small and mid-sized businesses said they are taking a hit in the trade dispute, according to a recent survey by the Canadian Federation of Independent Business (CFIB). Another quarter said they haven’t felt the impacts yet and 12 per cent were unsure if their business had been hurt.

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“To say that small businesses are feeling worried is an understatement,” Simon Gaudreault, CFIB’s chief economist and vice-president of research, said in a release. “No one likes to be strung along, small businesses least of all. The ever-changing news developments and the constant on-again, off-again tariff threats are exhausting and just very bad for the economy, investment and long-term business planning.”

Canada is mired in a trade war with the U.S. that currently impacts roughly 62 per cent of Canadian goods exported to the U.S., though U.S. President Donald Trump has pledged tariffs on all Canadian exports by April 2.

Despite some tariff reprieves, prime minister-designate Mark Carney has pledged to maintain Canada’s retaliatory tariffs until “the Americans show us respect.”

Today Trump imposed a 25-per-cent tariff on steel and aluminum imports from all countries.

To support affected businesses, the CFIB is urging the federal government to scrap an incoming carbon tax hike, ensure carbon tax rebates are tax free, increase the lifetime capital gains exemption threshold to $1.25 million and ensure the promised Canadian Entrepreneurs’ Incentive remains in place.

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It is also recommending all money collected from Canadian tariffs be returned to local businesses.

“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,” Corinne Pohlmann, CFIB’s executive vice-president of advocacy, said. “Ottawa owes it to small businesses to provide some clarity and assurance in these turbulent times.”

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While still early, Canadian stocks are on track to outperform their U.S. counterparts for the third straight quarter, which hasn’t happened since 2022.

As of Tuesday morning, the S&P/TSX Composite Index has fallen down less than the S&P 500 Index to start 2025 as big losses among the largest tech stocks has slumped the index.

Canada’s stock market has seen a boost from copper and gold miners. Gold has been an added standout, in part because the commodity is seen as a stable option in times of economic turmoil.

Read more here. 

• 9:45 a.m.: Bank of Canada interest rate announcement
• Today’s Data: U.S. consumer price index for February, U.S. treasury budget for February
• Today’s earnings: Volkswagen St., Dick’s Sporting Goods Inc.

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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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