Most small businesses are absorbing some or all of the costs associated with U.S. tariffs, according to new data by the Canadian Federation of Independent Business (CFIB). With a deadline for a new trade deal looming on Aug. 1, CFIB is calling on Ottawa to release Canada’s retaliatory tariff revenues to support small businesses.
On imports from the U.S., nearly seven in 10 small businesses paid the full Canadian tariff, with the median cost of $9,000. On exports, 63 per cent covered costs directly or shared them with their U.S. customers, paying a median of $25,000. “It is clear that most small exporters have had to eat much of the cost of U.S. tariffs in order to keep their American customers,” said Dan Kelly, CFIB president.
Ottawa has collected billions in additional tariff revenue on U.S. imports compared to last year. “If no deal is reached by Friday, Canada must immediately return the revenue collected from our counter tariffs to small businesses to help them weather the ongoing harm and massive economic uncertainty,” Kelly said. “Many have been holding out, delaying critical decisions hoping for enough certainty to plan for the future. Without an immediate deal, many are facing some terrible choices, including laying off key workers.”
CFIB has sent a letter to the federal government, urging it to consider several options to providing financial relief to businesses. These include a rebate program for affected businesses, a temporary reduction in the small business tax rate from 9 per cent to 0 per cent or lowering Employment Insurance premiums for employers. CFIB’s latest petition, which has 10,000 signatures, also calls on Ottawa to deal with unfinished business and lower the costs of doing business.
“So far, the federal government’s announced support measures and tariff exemptions have fallen short of bringing desperately needed cost relief,” said Corinne Pohlmann, executive vice-president of advocacy at CFIB. “We also hope that the government will take a careful look at its counter-tariff plans when negotiations conclude. Although small businesses have been supportive of Canada’s counter-tariffs while discussions are under way, ongoing tariffs would have permanent consequences on small businesses and the broader Canadian economy.”
