Chinese tariffs are coming at the worst possible time
Small business confidence in the agriculture sector plummeted from 49.1 index points in February to 21.3 in March, according to the latest Canadian Federation of Independent Business (CFIB)’s Business Barometer®.
It’s not just the US tariffs, the agriculture industry is also being impacted by 100% tariffs from China on canola oil, peas and oil cakes as well as 25% tariffs on pork. “Chinese tariffs are coming at the worst possible time given the ongoing uncertainty in our trading relationship with the United States,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
The Canadian Federation of Independent Business (CFIB) has reported an unprecedented decline in small business confidence, with its Business Barometer long-term index plummeting by 24.8 points to 25.0 in March. This drop is the lowest ever recorded, surpassing confidence levels during the 2020 pandemic, 2008 financial crisis, and the aftermath of 9/11.
“Small business owners are feeling pessimistic about their business’s perspectives for the next few months or even beyond. It’s hard to make critical decisions for the long, medium or short term when so much can change within a matter of hours,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “No one knows when the tariff war will end, and businesses are worried the worst is yet to come.”
The economic strain is forcing small businesses to increase their prices, with planned price hikes averaging 3.7%, up from 3.0% in February-the sharpest monthly rise since the pandemic. Wage increase expectations, however, have fallen from 2.2% to 1.9%.
Hiring plans have also taken a hit, with 19% of small businesses anticipating layoffs in the coming months, compared to 13% in February.
Only 11% plan to hire new staff. Additionally, 59% of small firms are now reporting insufficient demand, exceeding the pandemic peak of 53%. All provinces recorded a decline in optimism, with Ontario (23.4), Alberta (24.1), and Quebec (24.9) being the most pessimistic.
“Business confidence is at abysmal levels," said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB. "Now is the time to show strong support to small businesses. Taking proactive actions, such as making carbon tax rebates for small businesses tax free, adopting full mutual recognition right across Canada, increasing the lifetime capital gains exemption, and ensuring there are supports that are accessible to small businesses to help them through this challenging ordeal would significantly boost confidence at a time when small businesses need it the most.”