Businesses across Canada race against the clock amid 90-day tariff pause

Amidst a 90-day pause, small businesses in Canada scramble to prepare for an uncertain future as tariffs loom over the country.

At the time of publication, Canada remains in a fragile state of grace, as the Trump administration lowered the global tariff rate to 10 per cent for three months to generate negotiations with world leaders.

But while that 10 per cent tariff does not apply to Canada or Mexico, Canada still endures a 25 per cent tariff on vehicle imports and their corresponding materials. Anxiety has also been brewing since U.S. President Donald Trump threatened 25 per cent tariffs on all goods from its North American neighbours shortly after he was elected. The tariffs, reportedly an emergency response to fentanyl trafficking, have been paused, implemented, and rolled back several times since Feb. 1.

A survey from Merchant Growth — a Canadian company specializing in nationwide finance — found that, on a large scale, most small businesses still fear the worst if tariffs return in full swing.

Data collected found that if aggressive tariffs returned tomorrow, 32 per cent of businesses in Canada feel that they would suffer immediate financial effects within weeks, with another 53 per cent citing that they would likely feel the impact within six months.

As a result, Canadian small business operators have been overhauling their operations to — hopefully — stay ahead of an ever-changing and ever-aggressive curve.

Specifically, by removing any U.S.-influenced structure on supply, transportation, and other engines of industry.

“Many of these businesses are looking to diversify. They don’t want to pass on higher costs. But, when you are faced with no choice but to eat said cost or pass it off to the consumer, you’ll pass on that cost. To survive, businesses are looking for ways to reduce impact,” Joel Cote, Merchant Growth’s executive VP on revenue, tells INsauga.com.

Cote noted that, while the perceived immediacy of tariffs and their impact are split, it is only a matter of time until they work their way through the entire chain of players in Canadian commerce, big or small.

Based on client feedback, Cote noted several actions most small business owners have applied to maneuver in a climate dominated by on-and-off economic threats.

The first step is acquiring emergency capital, the second is reducing overall costs, and the third is looking for non-U.S.-based suppliers and trading partners.

“How everyone is trying to keep pace through this is understanding the best way to position themselves, because some of them already have that natural anxiety and fear associated with what could be around the corner,” says Cote.

Outside the purview of what small-scale operators can do, and with a federal election only a few days away, Cote notes that whoever ends up in the big chair in Ottawa should enact policy as soon as possible to help small businesses.

“We have this wonderfully ripe opportunity with the various election campaigns that are taking place right now, where we can start generating conversations around dismantling interprovincial trade barriers, tax reform, and opening up the market to offset these anticipated lower revenues,” says Cote.

Even with this sentiment ringing through the Canadian financial landscape, not all are convinced that tax breaks are the silver bullet for tariff woes, as other experts have chimed in on their inefficacy.

However, Cote still urges Canadians struggling to make their voices heard in the days leading up to the election, even with the Trump administration alternating between the gas and brakes on tariffs.

“If anything, there was a sense of excitement when the tariffs were paused, yet ongoing confusion, especially concerning the small business owner, and we have been continuously hearing from them asking what is going to happen next, what we know is there is a 90-day pause but the other 25 per cent tariffs are still there,” says Cote.

As Cote notes that select businesses have restructured their import/export rhythm around other global partners (most in China), he remains firm in his convictions that the federal government needs to do a lot more to make Canada a valid trade prospect in the current global market.

“We are hearing these grandiose plans about infrastructure, yet at the same point and time, we are not talking about how we are going to attract foreign and domestic business growth into Canada,” says Cote.

Until the feds make major moves, Cote says that all small-scale businesses in Canada can do is strategize until the game clock reaches zero, as major concerns surrounding the impact of global tariffs are likely to return.

“When you continue to suffer over the next 90 days, the challenges do not go away — all it does is kick the can down the road.”