A new report from the Canadian Federation of Independent Business (CFIB) reveals a significant erosion of trust in cross-border trade relations, with over half of Canada's small businesses now viewing the United States as an unreliable trading partner. This sentiment comes as the country marks one year into President Donald Trump's trade war, creating massive uncertainty for entrepreneurs.
Survey Highlights Widespread Impact of Tariffs
According to data released Wednesday, small businesses continue to bear the brunt of the ongoing trade conflict. The CFIB survey found that 68% of Canadian small business owners report being negatively impacted by American tariffs, with three-quarters stating that ongoing tariff battles have strained their relationships with American clients or partner businesses.
"Small business owners have been dealing with the whiplash of trying to keep up with sudden changes and threats, including many that don't happen or are revised within hours," said CFIB president Dan Kelly. "With CUSMA (the Canada-U.S.-Mexico Agreement) coming up for review in the months ahead, the stakes are even higher."
Supreme Court Ruling Offers Limited Relief
The report notes that a recent U.S. Supreme Court decision provides only partial relief. On February 20, a 6-3 ruling determined that President Trump lacked authority to impose tariffs under the International Emergency Economic Powers Act, declaring that tariffs are taxes requiring Congressional approval.
While this decision brings relief to the 27% of businesses impacted by tariffs on goods that don't comply with CUSMA, it means little for most Canadian exports. Trump described the ruling as "deeply disappointing," accusing Supreme Court justices of being "very unpatriotic and disloyal" to the U.S. Constitution.
Government Support Programs Largely Unknown
Despite government initiatives designed to help businesses weather the tariff storm, awareness remains critically low. The CFIB determined that fewer than 1% of surveyed businesses had applied for relief under Ottawa's Regional Tariff Response Initiative.
This program, launched in 2025, provides $1 billion over three years to support small and medium-sized businesses. However, the CFIB found that 77% of Canadian small businesses had no knowledge of the program's existence.
Restrictive Eligibility Requirements
Even for those aware of available support, restrictive eligibility rules make programs inaccessible to many of the hardest-hit businesses. The report highlights significant regional variations in qualification criteria:
- In British Columbia, businesses must employ at least 10 full-time workers to qualify
- In Quebec, applications were limited to manufacturing firms with annual revenues of $2 million or more
- Eligibility in Quebec is now closed to new applicants
CFIB Calls for Comprehensive Support Measures
The business federation is urging the federal government to implement more effective support measures. Their recommendations include:
- A 3% decrease in the small business tax rate
- A rebate program ensuring refunds aren't taxed as income
- Enhanced focus on maintaining CUSMA stability
- Better communication about existing support programs
"Small business owners are telling us they feel abandoned in dealing with tariff costs," said CFIB's Michelle Auger. "With fewer people starting businesses, we can't afford to overlook the ones we have. Ottawa needs to step up and find better ways to help."
The strained trade relationship represents a significant challenge for Canada's economic landscape, particularly as businesses face ongoing uncertainty about future trade policies and international relations.
