Canada's Trade War Takes Toll on Small Businesses

Canada's small businesses are facing significant challenges due to the ongoing trade war with the US. According to new data from CFIB, EDC, and Statistics Canada, small exporters and importers are struggling to cope with the tariffs imposed by both countries. The data shows that exports to the US dropped 6.6% in July, while the country's trade surplus with the US narrowed to $5.9 billion, its lowest level since February 2026.

The broader goods trade surplus with the world also shrank from $4.2 billion in June to $769 million in July. However, exports to countries other than the US rose 7.4% in July to reach a record high of $25.6 billion. This shift towards non-US markets is seen as a positive development for Canada's export economy.

CFIB president Dan Kelly warned that small businesses are being put on the front lines of the trade war and need urgent government support. He proposed a dedicated Small Business Tariff Relief program offering initial support of up to $70,000 CAD for eligible exporters and importers. CFIB also called for a cut in the small business corporate tax rate from 9% to 6%, retroactive to January 1, 2026.