Almost a year after U.S. President Donald Trump's Liberation Day tariffs, more than half of Canadian small businesses no longer consider the U.S. a reliable trading partner.
"Small businesses have faced massive uncertainty since the trade battle began last year," said President of the Canadian Federation of Independent Business, Dan Kelly. "Small business owners have been dealing with the whiplash of trying to keep up with sudden changes and threats, including any that don't happen or are revised within hours."
That uncertainty showed up in a recent survey commissioned by the federation.
Three-quarters of respondents said the tariff fight has strained their relationships with American partners and clients. That's up sharply from 49 per cent one year ago. More than two-thirds of business owners, 68 per cent, report being negatively impacted by American tariffs.
Recently, the U.S. Supreme Court ruled the tariffs are illegal, and on Wednesday, the U.S. Court of International Trade ruled businesses that paid the tariffs must be reimbursed by the U.S. government.
Unfortunately, the federation says that the ruling doesn't change the situation for most Canadian exporters, although it will bring needed relief for 27 per cent of small businesses hurt by tariffs on non-CUSMA-compliant goods.
Research also found few small businesses are accessing the federal Regional Tariff Response Initiative. Only one per cent have applied, and 77 per cent were unaware the program existed. Restrictions on eligibility also make the program inaccessible to many small businesses.
The CFIB has written Prime Minister Mark Carney, Finance Minister Francois-Philippe Champagne, and Canada's Regional Development Agencies, questioning the program's effectiveness.
"We keep hearing the same things from business owners; they're too small to qualify, they didn't know about the program, or that the required paperwork isn't worth the time and resources," said CFIB executive vice president of advocacy, Corrine Pohlmann. "Many retailers and wholesalers were hit hard by counter-tariffs, but they still didn't qualify. The program was poorly designed for the very small businesses it was supposed to help."
The CFIB wants Ottawa to consider a reduction in the small business tax from 9 per cent to 6 per cent, implement a rebate program for tariff-impacted businesses, ensure rebates and refunds are non-taxable, and stay focused on maintaining CUSMA to restore stability.
"Small business owners are telling us they feel abandoned in dealing with tariff costs," said Michelle Auger, CFIB director of trade and marketplace competitiveness. "With fewer people starting businesses, we can't afford to overlook the ones we have."
The survey was conducted in February and involved 1,379 respondents. It has a margin of error of +/- 2.4 per cent 19 times out of 20.
