Small and medium enterprise leaders say they might must make minor changes to their operations within the quick time period to deal with widespread U.S. tariffs on Canadian items, however extra drastic measures could also be wanted afterward.
Firms say they like measures resembling lowered hours or hiring freezes over important layoffs if they’re pressured to make adjustments as a result of 25 per cent levy, in line with a ballot of fifty small and medium enterprise leaders throughout Canada.
“Nonetheless, many additionally acknowledged that these measures might solely be sustained for six to 12 months earlier than extra important workforce reductions would turn into vital,” stated a report by World Commerce Centre Toronto, the commerce companies arm of the Toronto Area Board of Commerce.
“This creates a possible ‘delayed influence’ state of affairs the place preliminary employment statistics may counsel minimal results, solely to see extra substantial job losses emerge over time if tariff situations persist.”
U.S. President Donald Trump’s blanket 25 per cent tariffs on imports from Canada, with a decrease 10 per cent price for vitality merchandise, took impact March 4.
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Two days later, Trump paused the levy’s software to items and companies compliant with the United States-Mexico-Canada Settlement till April 2.
The report stated industries with excessive mounted prices and restricted capacity to implement partial measures could face earlier strain to make extra “dramatic” workforce changes.
It additionally famous the toll of tariffs on small or medium companies might differ considerably by area, primarily based on the focus of U.S.-dependent companies in numerous areas.
Canadian small and medium companies derive a mean of 31.1 per cent of their income from U.S. gross sales, in line with the survey, which discovered massive disparities in that information amongst respondents.
Whereas some companies have little or no U.S. market dependence, 18 per cent stated they depend on the U.S. for greater than three quarters of their income.
For the latter group, the tariff menace “represents an existential problem requiring speedy and complete strategic response,” the board stated.
“These companies face potential income impacts that would threaten their very viability if not addressed successfully.”
The report stated 63 per cent of companies surveyed anticipate slicing or delaying investments in analysis and growth if tariffs considerably have an effect on their income streams.
It known as {that a} “regarding potential for long-term aggressive erosion,” as analysis and growth investments sometimes drive market competitiveness three to 5 years into the long run.
As federal and provincial governments proceed to navigate tariffs and negotiate with their American counterparts, the board beneficial policymakers give attention to priorities resembling commerce diversification, diplomatic engagement and offering innovation incentives.
In the meantime, it stated companies ought to prioritize various market entry methods, provide chain flexibility and operational effectivity enhancements.
© 2025 The Canadian Press
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