The collapse of Canada/U.S. trade talk will have immediate and significant impact of small businesses in Canada, says the Canadian Federation of Independent Business, which is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region.
In a statement released on Saturday, Dan Kelly, President of the CFIB, said: “The new list of new Canadian exports subject to a 50% tariff includes 18 pages of products that are right at the centre of what small businesses sell. A full 40% of small Canadian exporters will be directly hit by these tariffs and nearly one-third expect their revenues will drop by 50% or more as a result.
“This round of tariffs is far more impactful on a far larger swath of small firms than the earlier ones. Small firms most affected by the tariffs include those selling machinery and equipment, wood and building products, plastic and packaging, food and beverages and arts, jewellery and creative products.
“And while retaliatory tariffs are an understandable response from our government, the impact of this move also hits small firms hard. While 20% of small firms export, over 50% import from the US. The burden of retaliatory tariffs ultimately affects consumers, but first to be hit are the small firms that import. Earlier rounds of Canadian retaliatory tariffs had a major negative impact on many small businesses.”
Kelly said the Prime Minister has rightly noted his concern for small businesses and has pledged measures to support Canadian workers and businesses in the coming days.
“CFIB notes that the $25 billion of earlier supports failed to deliver any meaningful relief to Canadian SMEs. Most of the loan programs delivered by Regional Development Agencies specifically excluded small firms from even applying. These programs were shockingly unfair and ineffective,” said Kelly.
“As we did during the pandemic, CFIB stands ready to work with government on ways to offer relief that delivers, including important tax relief for small firms.
“CFIB does not second guess the decision of government to end this round of discussions in pursuit of a lasting deal that removes the threat of the new tariffs and reduces the earlier sectoral tariffs.
“More than anything, small firms are counting on government to resume negotiations as early as possible and ensure the impact on Canadian entrepreneurs is minimized in the interim.”
In a statement, Canadian Prime Minster Mark Carney said trade talk progress has not been enough to meet the government’s objectives for Canadians. As a result, he said he decided to suspend trade negotiations with the U.S. and he directed Canada’s negotiators to return to Ottawa. Carney noted that the U.S. intends to impose a 50% tariff on roughly $28 billion of Canadian goods and “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
“In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly $25 billion in support provided over the past 18 months,” he said.
Carney’s full statement can be found here.
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