Trade War And Recession Concerns Grip Canadian Businesses: New Poll Data

Omar Yusuf

4 min read

Post on May 14, 2025

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Key Findings of the New Poll on Trade War and Recession Fears

The CFIB poll, conducted in late October 2023, surveyed over 1,000 Canadian businesses across various sectors and regions. The results paint a concerning picture of widespread anxiety about the future economic landscape.

• Trade War Concerns: A significant 70% of respondents expressed substantial concern regarding ongoing trade disputes and their potential impact on their businesses. This anxiety is particularly pronounced within the manufacturing (82%) and agriculture (78%) sectors.

• Recessionary Fears: An equally worrying 75% of businesses indicated significant concern about a potential economic recession within the next 12 months. This fear is widespread across all sectors, but especially high among small and medium-sized enterprises (SMEs).

• Geographic Variations: While concerns are widespread, the poll revealed higher levels of anxiety in Ontario and British Columbia, provinces heavily reliant on international trade.

• Industry Breakdown: The manufacturing sector is most impacted, with 85% expressing worry about both trade wars and recession. The agriculture and technology sectors reported comparable, albeit slightly lower, levels of concern.

[Insert a bar chart or graph here visualizing the percentage breakdown of concerns by industry sector and region]

Impact of Trade Wars on Canadian Businesses

Trade wars inflict significant damage on Canadian businesses through various channels:

• Increased Input Costs: Tariffs and trade barriers inflate the price of imported raw materials and components, squeezing profit margins and making Canadian goods less competitive internationally.

• Reduced Export Opportunities: Trade disputes often lead to retaliatory tariffs and reduced market access for Canadian exporters, diminishing sales and revenue. The Canadian lumber industry, for example, has faced significant challenges due to US trade restrictions.

• Supply Chain Disruptions: Trade wars create uncertainty and instability within global supply chains, leading to delays, shortages, and increased costs for businesses.

• Loss of Competitiveness: Higher input costs and reduced export opportunities erode the competitiveness of Canadian businesses against foreign rivals, potentially resulting in market share losses.

"The escalating trade tensions are significantly impacting our ability to compete," laments Sarah Miller, CEO of a Canadian automotive parts manufacturer. "Increased costs and uncertain access to key materials are jeopardizing our future."

Recessionary Fears and Their Implications for Canadian Businesses

The prospect of a recession amplifies the challenges faced by Canadian businesses:

• Reduced Consumer Spending: A recession typically leads to decreased consumer spending, impacting sales and revenue across various sectors.

• Increased Unemployment: Job losses during a recession can further reduce consumer spending and create a negative feedback loop impacting business profitability.

• Difficulty Accessing Credit: Banks and financial institutions become more cautious during economic downturns, making it harder for businesses to secure loans and financing for expansion or working capital.

• Impact on Investment Plans: Uncertainty surrounding a recession can lead to businesses postponing or cancelling expansion plans and investment projects.

To mitigate recessionary risks, many businesses are adopting cost-cutting measures, diversifying their product offerings, and exploring new markets. The Canadian government has also announced programs like the Wage Subsidy to support businesses during economic uncertainty.

Government Response and Policy Recommendations

The Canadian government has implemented several measures to address trade challenges and bolster economic stability. These include negotiating new trade agreements, providing financial support to affected industries, and promoting diversification of export markets. However, many businesses believe these measures are insufficient.

Policy recommendations to alleviate business concerns include:

• Increased investment in trade diversification programs: Helping businesses explore new export markets and reduce reliance on specific trading partners.

• Enhanced support for SMEs: Offering targeted financial assistance and training programs to help SMEs navigate economic uncertainty.

• Strategic investments in infrastructure: Modernizing infrastructure to improve competitiveness and facilitate international trade.

Business associations are advocating for more aggressive government action, including substantial tax cuts and more robust trade dispute resolution mechanisms.

Navigating Trade War and Recession Concerns in the Canadian Business Landscape

The CFIB poll clearly demonstrates the pervasive anxiety surrounding trade wars and potential recession among Canadian businesses. The impacts are significant, affecting input costs, export opportunities, supply chains, and overall competitiveness. Recessionary fears exacerbate these issues, further impacting consumer spending, employment, and investment.

It's crucial for Canadian businesses to proactively mitigate these risks. This includes developing robust business continuity plans, diversifying operations, exploring government support programs, and staying informed about evolving economic conditions. To learn more about managing trade war and recession risks, visit the CFIB website and explore resources from the Department of Finance Canada. Don't let trade war uncertainties dictate your future; prepare your business today.