TORONTO — The Canadian Federation of Independent Business says small business confidence dropped to an all-time low in March as the trade war with the U.S. ramped up, with the outlook further darkened by new Chinese tariffs.
The federation says its business barometer long-term index fell 24.8 index points to 25.0 in March, worse than the lows it reached during the COVID-19 pandemic in 2020, the 2008 financial crisis or the 9/11 terror attacks.
Measured on a scale between zero and 100, an index reading below 50 means more owners are expecting their business's performance to be weaker over the next three or 12 months than those expecting stronger performance.
Simon Gaudrealt, the federation's chief economist, said in a release Thursday that small business owners are feeling pessimistic about the months ahead.
"It’s hard to make critical decisions for the long, medium or short term when so much can change within a matter of hours," he said.
"No one knows when the tariff war will end, and businesses are worried the worst is yet to come."
CFIB said the dismal mood is translating into lower hiring plans, with 19 per cent of small firms planning layoffs in the next few months compared with 13 per cent in February. Eleven per cent of firms said they were looking to hire.
The organization said small businesses plan to raise prices by an average of 3.7 per cent, up from three per cent in February, as they look to recoup losses. It's the biggest month-over-month spike in price increase intentions since the pandemic, the group said.
Wage increase plans dropped to 1.9 per cent from 2.2 per cent a month ago.
The CFIB said confidence among all sectors fell, with hospitality, manufacturing, transportation and agriculture bearing the brunt.
“Chinese tariffs are coming at the worst possible time given the ongoing uncertainty in our trading relationship with the United States,” Gaudreault said.
Agriculture businesses are facing 100 per cent tariffs from China on canola and peas, as well as a 25 per cent levy on pork and some seafood products. The move is in retaliation for Canada's tariffs on Chinese-made electric vehicles, steel and aluminum, which former prime minister Justin Trudeau said have an unfair advantage that's hurting the Canadian auto sector.
The CFIB is calling on government to help buffer the turmoil, including making carbon tax rebates tax-free, removing more interprovincial trade hurdles, increasing the lifetime capital gains exemption and offering supports to small businesses.
“Business confidence is at abysmal levels. If this doesn’t send a strong warning signal to policy-makers that businesses urgently need all the help they can get to weather this storm, including a much-improved business environment here in Canada, then I’m not sure what will,” said Corinne Pohlmann, the federation's executive vice-president of advocacy.
The report is based on 1,065 responses from a stratified random sample of CFIB members from March 5 to 7.
This report by The Canadian Press was first published March 20, 2025.
The Canadian Press
