Canadian business owners are sharing growing fears that things could go from bad to worse if the U.S.-imposed trade war doesn’t end soon.
New data from the Canadian Federation of Independent Business (CFIB) shows those business owners are being hit the hardest, particularly in B.C.
“Two-thirds of B.C. businesses import or export directly to the United States, and when you look at those who do so indirectly, so they buy from importers or exporters, that number jumps up to 80 per cent of all businesses exposed to trade with the United States. So, that’s a huge number,” Ryan Mitton, director of Legislative Affairs in B.C. at the CFIB, told 1130 NewsRadio.
He adds that the situation appears even more grim for hard-hit industries like steel and lumber.
“We also heard one-third in B.C. have been impacted by steel tariffs and one in five by softwood lumber tariffs, and that’s the highest rate of all the provinces in Canada. As we know, we have a very forest-dependent industry here in B.C.,” he adds.
“They tell us the uncertainty is really what’s killing them at the end of the day.”
Mitton points out there’s a domino effect to all this.
“If a mill is being impacted by tariffs, it’s also the small businesses around that community as well. Your local store, your supplier that sells hardware to workers. It all trickles down through the system, and that’s what we’re hearing from small businesses across the board. They tell us the uncertainty is really what’s killing them at the end of the day.”
Across the country, he says one in five small businesses say they’ll shutter within six months, blaming it on the trade war, but also lower revenues, higher costs and supply chain disruptions.
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“One in three small businesses say they’ve had orders paused, and a further one in four small businesses say they’ve had orders actually cancelled when it comes to the trade war.”
The CFIB is calling on the federal government to intervene by reducing the small business tax and offering a tariff rebate.
“They need help. They need cost relief. It also includes the tariff revenue from Canadian counter-tariffs being returned to small businesses so they can endure longer.”
Until a deal is reached between Canada and the U.S., Mitton is imploring people to shop and buy locally as much as possible.
“That is one of the issues [small businesses] face, is reduced customer demand. People just aren’t coming into stores right now, and that’s because we have affordability problems. People are holding onto their wallets.”
Deadlines have come and gone for firming up a trade deal with the U.S. The two nations were expected to reach an agreement on Aug. 1, but that didn’t happen. Instead, U.S. President Donald Trump increased tariffs to 35 per cent on Canadian exports not covered under the Canada-United States-Mexico Agreement (CUSMA).
Prime Minister Mark Carney says talks would likely continue into August, and perhaps beyond, adding Canada will only accept a “fair” deal.
The Trump administration claims Canada’s supposed higher rate of levies was a response to fentanyl trafficking and its decision earlier in the year to impose counter-tariffs.
“The United States has justified its most recent trade action on the basis of the cross-border flow of fentanyl, despite the fact that Canada accounts for only 1 per cent of U.S. fentanyl imports and has been working intensively to further reduce these volumes,” said Carney at the beginning of the month.
“Canada’s government is making historic investments in border security to arrest drug traffickers, take down transnational gangs, and end migrant smuggling. These include thousands of new law enforcement and border security officers, aerial surveillance, intelligence and security operations, and the strongest border legislation in our history. We will continue working with the United States to stop the scourge of fentanyl and save lives in both our countries.”
Meanwhile, Foreign Affairs Minister Anita Anand is set to have her first official meeting with U.S. Secretary of State Marco Rubio in Washington, D.C.
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The two have previously spoken on the phone, including back in June, ahead of the G7 summit.
The Canada-U.S. trade minister was in the U.S. capital last month for trade talks with U.S. Commerce Secretary Howard Lutnick. He was hoping to reach a deal on tariffs, but, again, that didn’t happen.
Anand’s meeting comes one day after the State Department slapped sanctions on a Canadian judge who sits on the International Criminal Court.
—With files from Dean Recksiedler