Canada’s counter-tariffs against U.S. exports are set to take effect on Sept. 8, and Merchant Growth says its new poll shows the tariffs war with the U.S. will be detrimental to Canadian small businesses.
According to the study by the Canadian online financing solution for small business, over 69% have U.S. ties they rely on, whether that’s a supplier, customer or partner,
The survey found 20% said their U.S. ties are core to their operations and revenue while 19% say they are important but not critical.
Another 16% said tariffs are already among the cost pressures significantly impacting their business this summer.
The poll also found that in response to economic or trade pressures, 61% have cut spending, 34% have delayed hiring, 30% have reduced staff, 30% have paused or cancelled expansion plans and 27% have raised prices.
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Some businesses already moving away from U.S. exposure
Additionally, the survey said some businesses are already moving away from U.S. exposure, with 14% switching to Canadian or non-U.S. suppliers and 11% stopping work with U.S. suppliers altogether.
“Small businesses aren’t waiting for the full impact of tariffs to hit before changing how they operate,” Hash Aboulhosn, chief growth officer for Merchant Growth, said in a statement to the Toronto Sun . “They’re pulling back on spending and hiring, reconsidering supplier relationships and, in some cases, moving away from U.S. partners altogether.”
“That tells us just how cautious business owners have become. With Canada’s counter-tariffs taking effect on Sept. 8, it’s important to remember that these costs don’t simply stop at the border. They can move through suppliers, distributors and customers, reaching businesses that may not import anything themselves.”
“But the bigger challenge is the uncertainty. When a small business owner doesn’t know what their inputs will cost a few months from now or how customers will respond, it becomes much harder to invest, hire or plan for growth. The instinct becomes protecting the business and preserving flexibility until there’s more clarity,” Aboulhosn added.
45% say weaker consumer demand impacting summer biz
The poll found that 45% say weaker consumer demand is significantly impacting their business this summer, followed by fuel costs (39%), utilities (39%), labour costs (34%) and commercial rent or lease increases (28%). Tariffs were cited by 16%.
Another finding in the survey is that 80% believe Canada is either already in an economic downturn or likely heading toward one within the next 12 months.
On government support, 72% cited access to low-interest small business loans, 64% permanent tax relief and 16% tariff rebates or import-cost relief.
Merchant Growth’s 2026 Small Business Survey was open from May 1-19 and received 130 responses nationally, with 126 completed responses, including 64 respondents in Ontario.
jstevenson@postmedia.com