Following the latest round of U.S and Canadian tariffs since August 2026, businesses across Canada face higher costs and greater uncertainty, but not all are affected equally. While nearly half of small businesses report lower profits since August 2026, the impact varies widely by province and industry. Using results from CFIB’s October 2026 Your Voice Survey [1,2] of Canada’s small and medium-sized businesses, this blog looks at which provinces and industries are hit hardest, how businesses are responding, and which policies would help.
Nationally, since August 2026 about one business in three reports a high impact from U.S. tariffs (30%) and Canada’s counter-tariffs (32%). Overall, nearly half of business owners (47%) have experienced a decrease in their profits. At first glance, profit losses appear to exceed the share of businesses most directly affected by tariffs. This suggests that the effects of the trade war may extend beyond those businesses reporting a high tariff impact, possibly through rising costs, weaker demand, or disruptions elsewhere in the supply chain.
These national findings, however, mask important provincial differences in how tariff pressures translate into business outcomes. While the intensity of tariff pressures is broadly similar across provinces, the source of those pressures differs. In seven of the eight shown in Table 1, between 27% to 36% of businesses report a high impact from at least one of the two tariffs, and New Brunswick stands out at 43%. But the mix differs sharply. Manitoba and Ontario are hit mainly by Canada’s counter-tariffs (36% and 35%, against 20% and 31% for U.S. tariffs), while New Brunswick and British Columbia are hit mainly by U.S. tariffs (43% and 33%, against 36% and 27% for counter-tariffs). Alberta and Quebec are affected about equally by both (Alberta 32% and 34%, Quebec 30% and 28%).
Table 1: High impact from U.S. tariffs and Canadian counter-tariffs, by province
Source: CFIB, Your Voice survey, October 2026, final results; n = 1,478 (profits), 902 and 874 (tariff ratings).
Question: (1) On a scale from 1 to 10, to what extent have U.S. tariffs and Canadian counter-tariffs affected your business operations?
(2) High impact = rating of 8 to 10. (3) *Fewer than 40 businesses rated one of the tariffs. (4) Jurisdictions with fewer than 10 responses are not shown (PE, NT, YT). (5) Main source of tariff impact: the tariff that at least 4 percentage points more businesses rate as high impact; otherwise both (roughly equal).
The source of tariff pressure varies across provinces, but does that translate into different outcomes? Figure 1 compares provincial tariff pressures with reported profit losses.
Four provinces (in blue) sit at or above the national average (47%) for businesses reporting lower profits: Ontario (53%) and Alberta (52%). The source of tariff pressure differs, with Ontario hit mainly by Canada’s counter-tariffs and Alberta by both tariffs about equally, but the result is the same: above-average profit losses. Quebec and Saskatchewan appear more resilient: their businesses are about as exposed to tariffs as the national average, yet a smaller share report lower profits (36% and 35%).
Figure 1: Main tariff pressure and profit losses, by province
Source: CFIB, Your Voice survey, October 2026, final results; n = 1,478 (profits), 902 and 874 (tariff ratings).
Questions: (1) On a scale from 1 to 10, to what extent have U.S. tariffs and Canadian counter-tariffs affected your business operations?
(2) Since the escalation of the trade war in August 2026, what changes have you noticed in overall business profits?
Notes: (1) Each bubble is a province. Its position shows the share of businesses rating each tariff as high impact: above the diagonal, U.S. tariffs weigh more; below it, Canadian counter-tariffs. Bubble size and the percentage shown are the share of businesses reporting lower profits; dark bubbles are at/above the national average (47%). (2) High impact = rating of 8 to 10. (3) *Fewer than 40 businesses rated one of the tariffs. (4) Jurisdictions with fewer than 10 responses are not shown (PE, NT, YT).
The national picture hides even larger differences across sectors than across provinces. Some industries are far more exposed to tariffs than others, and the source of the pressure varies from one industry to the next (Table 2).
In ten of the thirteen sectors shown in Table 2, between 25% and 47% of businesses report a high impact from the tariff that affects them most. Manufacturing stands apart as the only sector hit hard from both sides, with nearly half of businesses reporting a high impact from U.S. tariffs (47%) and Canada’s counter-tariffs (46%). Wholesale is almost as exposed, but mainly through counter-tariffs (45%), as are retail (33%) and enterprise and administrative management (17%). Agriculture (32%), arts, recreation and information (29%) and professional and business services (20%) are hit mainly by U.S. tariffs. The remaining sectors, including construction, accommodation and food, and other services, are affected about equally by both.
Table 2: High impact from U.S. tariffs and Canadian counter-tariffs, by sector
Source: CFIB, Your Voice survey, October 2026, final results; n = 902 (U.S. tariffs) and 874 (Canadian counter-tariffs).
Questions: (1) On a scale from 1 to 10, to what extent have U.S. tariffs and Canadian counter-tariffs affected your business operations?
(2) High impact = rating of 8 to 10. (3) *Fewer than 40 businesses rated one of the tariffs. (4) Mining, quarrying and oil and gas extraction is not shown (fewer than 10 responses). (5) Main source of tariff impact: the tariff that at least 4 percentage points more businesses rate as high impact; otherwise both (roughly equal).
To see how U.S. tariffs and Canada’s counter-tariffs affect different parts of the economy, we compare the share of businesses reporting a high impact from each tariff with the share reporting profit losses, by sector (Figure 2).
Nine sectors (in blue) sit above the national average (47%) for businesses reporting lower profits: manufacturing (63%), transportation and utilities (60%), accommodation and food (54%), arts, recreation and information (53%), agriculture (51%), other services (51%), retail (48%), wholesale (48%) and health and education (48%). In most of these sectors, high tariff exposure goes hand in hand with profit losses.
Figure 2: Main tariff pressure and profit losses, by sector
Questions: 1. On a scale from 1 to 10, to what extent have U.S. tariffs and Canadian counter-tariffs affected your business operations? 2. Since the escalation of the trade war in August 2026, what changes have you noticed in overall business profits?
Notes: (1) Each bubble is a sector. Its position shows the share of businesses rating each tariff as high impact: above the diagonal, U.S. tariffs weigh more; below it, Canadian counter-tariffs. Bubble size and the percentage shown are the share of businesses reporting lower profits; dark bubbles are above the national average (47%). (2) High impact = rating of 8 to 10. (3) *Fewer than 40 businesses rated one of the tariffs. (4) Mining, quarrying and oil and gas extraction is not shown (9 responses).
The reverse is also true. Finance, insurance and real estate (26%), professional and business services (23%), and enterprise and administrative management (33%) all report fewer profit losses and relatively low tariff impacts. Construction, despite exposure close to the national level (33% and 30%), also has a below-average share of businesses reporting lower profits (42%).
The trade war is not affecting all businesses in the same way. Provincial differences shape the outcomes, while industry differences shape the exposure. How are businesses responding?
Faced with the challenges from the trade war, about three businesses in five (62%) reported taking action in response since August. The most common response has been raising prices (40%), followed by shifting to Canadian suppliers or markets (28%), absorbing tariff costs (24%) and promoting Canadian-made products more prominently (23%) (Figure 3).
Figure 3: Businesses raise prices first, and one in five has shelved investment
Actions taken since August 2026
Source: CFIB, Your Voice survey, October 2026, final results; n = 1,530
Questions: Since the escalation of the U.S.-Canada trade dispute in August 2026, which of the following actions has your business taken in response? (Select all that apply)
Note: The share of businesses who have selected “Not applicable - We do not import/export with the U.S. and have not taken any actions” = 26%; “Not applicable - We import/export with the U.S. but have not taken any actions” = 5%, “Don’t know/Unsure” = 7% and “Other (please specify)” = 5% are not displayed.
Many of these responses involve difficult trade-offs. For instance, higher prices can weaken demand, while absorbing the tariff protects sales but cuts into margins. Shifting suppliers may reduce tariff exposure, but often require businesses to find new products, renegotiate contracts, or pay higher prices.
Some businesses are making more consequential adjustments. One in five businesses (20%) have delayed or cancelled investments, 14% have considered closing, selling, or winding down their operations, 12% have reduced workforce costs, and another 12% have taken on additional debt. Unlike changes to pricing or sourcing, these decisions can have longer-lasting consequences for business growth and capacity.
At the same time, take-up of existing tariff relief measures remains low. Only 3% of businesses overall, and 10% of manufacturers, have applied for tariff relief, exemptions, or remissions. This raises an important question: if firms are facing significant pressure yet relatively few are accessing available support, are the programs missing the mark? Low participation may suggest that awareness, accessibility, eligibility requirements, or the design of the programs themselves are limiting their usefulness for the businesses they are intended to help. Understanding what businesses need is critical in addressing their challenges.
When asked what would help their business succeed, owners put lower taxes and lower business costs at the top of the list (Figure 4). Two-thirds of businesses (65%) say reducing the overall tax burden would have a significant positive impact on their success, while 58% say the same about addressing rising prices and the cost of doing business. Support is even broader when moderate and small positive impacts are included with 95% and 94% of businesses respectively, expecting at least some benefit from these measures.
Figure 4: Overall expected impact of ten policy measures on the success of businesses.
Source: CFIB, Your Voice survey, October 2026, final results; n = between 1,388 and 1,398
Questions: What impact would each of the following measures have on the success of your business? (Select one for each line)
Note: This question was asked to all business owners in the survey. Not only businesses affected by tariffs.
The trade war is not producing a single Canadian business experience. Provincial and industry differences matter, and so do the channels through which businesses are affected. As the dispute continues, the challenge for policymakers will be to address both the direct and indirect pressures weighing on Canadian small businesses. While targeted tariff support remains important for the most exposed sectors, the strongest message from businesses is broader: lower taxes and lower operating costs would do the most to support their success.