Toronto, July 16, 2025 – Almost half (49%) of all automotive businesses in Ontario have paused or cancelled investments due to the U.S.-Canada trade war, translating to a potential $2.9B in missed investment over the next year, finds a new report from the Canadian Federation of Independent Business (CFIB). The report also revealed that nearly two in three businesses (65%) within the Ontario auto sector have been impacted by U.S. tariffs, with the average business experiencing a 13% drop in sales.
“Uncertainty, market volatility, and increased costs are forcing auto business owners to make difficult decisions to keep their doors open,” said Joseph Falzata, the report’s co-author and CFIB’s policy analyst for Ontario. “The desire to grow is there, but with such massive revenue losses, businesses are more focused on keeping their doors open than expanding their operations.”
The report also discovered that Ontario government programs to help auto businesses overcome tariff challenges will likely have no impact on the average small business. The Ontario Automotive Modernization Program (O-AMP) and the Ontario Vehicle Innovation Network (OVIN), which were allocated a combined $85M in funding, are expected to be used by only 1-2% of small auto business owners. The newly created $50M Ontario Together Trade Fund (OTTF) is expected to be used by a mere 1% of small businesses.
“While these programs were created with good intentions, the reality is that many small business owners have never heard of them and are not eligible,” said Falzata. “The Ontario government needs to focus their efforts not just on the major auto manufacturers, but also on the many small businesses that feed into the province’s auto eco-system.”
CFIB recommends that the Ontario government improve small business access to auto-focused programs, and/or use some program funds to reduce Ontario’s Small Business Tax Rate and/or elevate the threshold to access this rate.
The report also includes federal government recommendations, such as quickly returning the money collected through Canadian counter-tariffs to impacted small businesses and providing clear guidance on the rules of product origin to help small businesses determine if a product is compliant with the Canada-United States-Mexico Agreement (CUSMA).
For media inquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
Methodology
CFIB’s Survey on Ontario’s Auto industry and supply chain was conducted from May 22 to June 10 and received 500 responses from Ontario business owners in the automotive industry. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/- 4.4%, 19 times out of 20.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small- and medium-sized businesses with 100,000 members across every industry and region, including over 39,000 in Ontario. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
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