Small businesses prefer workforce adjustments over layoffs to deal with tariffs: poll

Toronto residents Douglas Bloomfield, from right, his son Phoenix and wife Ame, who are on vacation in Washington, hold a Canadian flag and an ice hockey stick to show their support for Canada regarding trade tariffs in front of the White House in Washington, Thursday, March 13, 2025. (AP Photo/Ben Curtis)

TORONTO — Small and medium business leaders say they could have to make minor adjustments to their operations in the short term to cope with widespread U.S. tariffs on Canadian goods.

The poll of 50 small and medium enterprise leaders across Canada, conducted by the trade services arm of the Toronto Region Board of Trade, found measures such as reduced hours or hiring freezes are preferred over significant layoffs if those companies are affected by the 25 per cent levy.

However, the World Trade Centre Toronto says 63 per cent of surveyed businesses anticipate cutting or delaying investments in research and development if tariffs significantly affect their revenue streams.

The survey says Canadian small and medium businesses derive an average of 31.1 per cent of their revenue from U.S. sales.

U.S. President Donald Trump’s blanket 25 per cent tariffs on imports from Canada, with a lower 10 per cent rate for energy products, took effect March 4. Two days later, Trump paused the levy’s application to goods and services compliant with the United States-Mexico-Canada Agreement until April 2.

The board’s report recommends policymakers focus on trade diversification, diplomatic engagement and providing innovation incentives, while businesses should prioritize alternative market entry strategies, supply chain flexibility, and operational efficiency improvements.

This report by The Canadian Press was first published March 25, 2025.

U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:

• CTVNews.ca will have in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
• CP24.com will report on any developments out of Queen’s Park and what the tariffs means for the people of the GTHA.
• BNNBloomberg.ca will explain what this means for the business community, investors, and the market.