The Trump administration’s 25% across-the-board tariffs are a massive broadside to the Canadian economy and come at a time of great political and economic uncertainty

 

Governments across Canada need to move into action mode. The majority of small business owners support retaliatory tariffs but recognize that they will hit an even broader swath of our economy than the U.S. tariffs themselves.

A third (34%) of small agri-businesses have already experienced higher costs due to the U.S.-Canada tariff situation. Two in five (43%) are looking for new suppliers, while over a quarter (29%) are delaying/cancelling expansion plans. Now that tariffs have been imposed, we expect to see these challenges rapidly escalate

 

 “The federal government should recall Parliament immediately to ensure that Canadian businesses have the support they need and that every dollar Canada collects in tariffs is returned to affected businesses as quickly as possible”

 

A Manitoba agri-business owner who grows corn told us that she’s concerned that a 25% tariff on pork from Canada could force barns to shut down, reducing her ability to sell her corn locally which would then affect her basis and overall profitability. Another farmer from Ontario is worried that the price of spray products for crops will increase, making it challenging to maintain crop quality and recover those costs.

Sadly, this is not the end of it. We may see additional tariffs on steel and aluminum on March 12 and on another round of products on April 2.  

Last week, Nova Scotia Premier Tim Houston followed through on a long-standing CFIB recommendation to break down internal trade barriers by mutually recognizing the rules of other provinces. Ontario Premier Doug Ford signalled he would do the same. Other provinces and territories need to step up now and match these actions to allow for true free trade within Canada. There is no time to waste. 

The federal government should recall Parliament immediately to ensure that Canadian businesses have the support they need and that every dollar Canada collects in tariffs is returned to affected businesses as quickly as possible.

The federal government can also send a clear message that Canada is open for business and investment by providing carbon tax clarity and stopping the April 1 increase, passing legislation to make sure carbon tax rebates are tax free and passing proposed legislation to increase the lifetime capital gains exemption threshold to $1.25M and putting the promised Canadian Entrepreneurs’ Incentive stays in place. Political and policy uncertainty is the last thing the country needs at this moment.

As we mark five years since the start of the pandemic, Canadian businesses have faced two massive economic threats – the pandemic and an emerging trade war with our largest economic partner. All of us need to come together and do all we can to support local, independent Canadian businesses.