### The Impact of U.S.-Canada Tariff Uncertainty on SMEs

**Toronto, February 13, 2025** – Recent findings from the Canadian Federation of Independent Business (CFIB) reveal that an alarming 18% of small- and medium-sized businesses (SMEs) are facing cancelled or paused orders due to the ongoing uncertainty surrounding tariffs between the U.S. and Canada. The situation is even more grave for exporters, where this figure rises to a concerning 34%.

### Insight from the CFIB

“Businesses are primarily suffering from the uncertainty around tariffs, which can be just as detrimental as the tariffs themselves. Each day that passes leads to more adjustment in operations by business owners due to this unpredictability,” expressed Simon Gaudreault, CFIB’s chief economist and vice-president of research. “While we might get a temporary break in hostilities, the long-term implications of these tariffs on small businesses remain worrisome.”

### Readiness for Tariff Implications

A striking 54% of SMEs have admitted that they do not feel prepared for the repercussions of U.S.-Canada tariffs. The CFIB data underscores several key statistics, including:

– **24% of businesses** are contemplating delaying their expansion plans.
– **20% of SMEs** are considering reducing their workforce or hours.
– **45% of small firms** are actively looking for alternative suppliers in response to the tariff challenges.
– **62% of these businesses** believe they can transfer costs to customers or clients, albeit to varying degrees, should tariffs be enforced.

### Business Adaptation Strategies

“While some companies may adapt their business models and explore new markets, this transition requires time and effort. Many exporters, however, indicate that pivoting will be a significant challenge, leaving them to make tough choices about whether to let go of staff, stay in Canada, or seek out foreign markets,” Gaudreault elaborated. “In sectors such as retail, a substantial number of businesses are indicating their necessity to pass increased costs onto consumers. Conversely, sectors like agri-business are suggesting they will absorb most of these added costs. This scenario sends a clear message: tariffs imposed by the U.S. and retaliatory measures from Canada will increase the financial burdens on businesses and, by extension, on Canadians as well.”

### Call to Action for Parliament

A resounding **81%** of small firms are urging that Parliament be recalled to address the looming tariff crisis. CFIB is advocating for the government to take immediate action to assist small businesses during this period of instability through several measures:

– **Halt the upcoming carbon tax increase scheduled for April 1.**
– **Pass legislation making carbon tax rebates available to small businesses tax-free.**
– **Implement proposed legislation that raises the lifetime capital gains exemption threshold to $1.25 million, while ensuring the Canadian Entrepreneurs’ Incentive remains intact.**

### Alarm Bells for Policymakers

“A staggering one in five businesses believes they could only survive less than three months without governmental support if tariffs are enforced. This is a clarion call for policymakers to take action. Now is the crucial moment to reduce taxes, adopt mutual recognition to tackle interprovincial trade barriers, and advocate for local purchasing,” Gaudreault concluded. “If Canada retaliates against U.S. tariffs, it is imperative that any support programs effectively address the needs of small businesses and ensure that the revenue from these tariffs returns swiftly to both importers and exporters.”

### Seeking Support and Guidance

To voice their concerns and share experiences, small business owners can connect with CFIB through cfib.ca/tariffs, illustrating the importance of a collective response to the situation.

### The Role of AI legalese decoder

In light of the tariff uncertainty, navigating legal documents can become convoluted for small business owners trying to understand their rights and obligations. This is where the **AI legalese decoder** comes into play. By using advanced AI technology, this tool can simplify and clarify complex legal jargon, making it easier for business owners to comprehend the implications of tariffs and other regulations affecting them. This understanding can empower owners to make informed decisions and strategically navigate their operational challenges.

### Media Inquiries and Contact Information

**For media inquiries or interviews, please contact:**
Dariya Baiguzhiyeva, CFIB
647-464-2814
[email protected]

### Methodology

**Methodology:**
The preliminary results for the Flash Survey on the impact of the U.S.-Canada tariff situation on businesses (conducted from February 6 to February 11, 2025) are derived from responses from 2,236 CFIB members who are owners of Canadian independent businesses across various sectors and regions. For comparative purposes, a probability sample with the same number of participants would have a margin of error of at most ±2.1%, 19 times out of 20.

### About CFIB

**About CFIB:**
The Canadian Federation of Independent Business (CFIB) represents Canada’s largest association of small and medium-sized businesses, counting 100,000 members from diverse industries and regions. CFIB is committed to enhancing the success of business owners by advocating for policy changes across all government levels, offering expert guidance and tools, and negotiating exclusive savings. To learn more, visit cfib.ca.