Canadian businesses are preparing for fresh turbulence after the United States imposed a 50 % tariff on billions of dollars’ worth of Canadian goods. The duties took effect on Saturday following the breakdown of negotiations between Ottawa and Washington. Prime Minister Mark Carney declared that Canada was “walking away from a bad deal” and promised to match the US measures with dollar‑for‑dollar retaliatory tariffs. For firms large and small, the immediate concern is how the new costs will affect prices, sales, jobs and the availability of government support.
Impact on Small Manufacturers
Ela Onisto, who runs Wick’ed Fragrance House in Innisfill, Ontario, described the pressure already being felt at her workshop. She makes small‑batch natural candles, fragrances and home décor and tries to keep her supply chain domestic. Yet she said she is already paying more for some inputs while customers are tightening their purse strings.
“It’s difficult because you need to determine where you’re going to add the cost… you don’t want to scare the customer; so as a small business owner, your margins go down,” Onisto said.
She added that sourcing locally does not fully insulate her operation because several Canadian suppliers still rely on the US market.
“It’s a domino effect,” she said.
The Canadian Federation of Independent Business notes that 40 % of small exporters sell products that appear on the tariff list, and one‑third of those firms anticipate sales dropping by half or more.
Industry Voices Warn of Policy Volatility
Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, highlighted the broader pattern of uncertainty that has plagued cross‑border trade.
“In 2025, there were over 52 different changes to the American tariff and tax code. That’s more than one a week,” Holmes told Global News.
He explained that the constant flux has led many companies to freeze major investment decisions, postpone hiring and delay the launch of new products. While a “no‑deal” outcome was undesirable, Holmes argued that governments are reacting appropriately by treating the situation as a crisis and readying support measures for affected businesses and workers.
Geoff Stewart, founder and president of Alberta‑based Rig Hand Craft Distillery, offered a concrete example of how the volatility is reshaping operations. Concerns over prospective tariffs prompted the distillery to close its packaging facility in Texas, which in turn cost contracts in that state as well as Arizona and Alaska.
Rig Hand has since shifted focus toward the Canadian market and other destinations, recently completing its first shipments to Japan. Stewart cautioned, however, that moving away from the United States is not a simple fix for distilleries that depend heavily on US exports. His firm also sources certain materials from the US, leaving it exposed to any retaliatory duties Canada might impose.
“The idea that there’s no tariffs today, and then in three days there are tariffs, and then seven days later, it might come off, then four days later it might come back. We can’t run our businesses with that amount of uncertainty there,” Stewart said. “And so we just need to know what the path forward is.”
Government Response and Provincial Support
Ottawa has pledged additional assistance for businesses and workers caught in the trade dispute, with Prime Minister Carney indicating that further details will be announced in the coming days. Ontario Premier Doug Ford has publicly backed the federal decision to walk away from the proposed agreement, arguing that the deal would have harmed the province’s auto, steel and manufacturing sectors.
Other premiers have echoed Ford’s stance while urging the government to provide targeted support for industries and workers expected to bear the brunt of the new tariffs.
For small enterprises like Onisto’s, the immediate strategy is to ride out the uncertainty and appeal to Canadians to shop locally.
“Support the small guys… we really depend on customers to support us,” she said.
Why it Matters
The re‑imposition of steep US tariffs threatens to disrupt integrated North American supply chains that have evolved over decades. For Canadian manufacturers, especially small and medium‑sized firms, the combination of higher input costs and weakening demand could erode profitability, jeopardise jobs and stall growth plans. The prevailing uncertainty — marked by frequent shifts in US trade policy — makes long‑term investment risky and hampers strategic decision‑making. While governmental retaliation and promised aid aim to cushion the blow, the ultimate outcome will hinge on whether Ottawa and Washington can restore a predictable trading environment or whether businesses will be forced to permanently reorient their markets away from their largest neighbour. The stakes extend beyond balance sheets; they touch the livelihoods of countless workers and the competitiveness of key sectors such as automotive, steel and agri‑culture.
