Small businesses are anything but small in their impact on the Canadian economy. This country is home to more than 1.2 million small enterprises that account for a massive 98% of all employer businesses. Playing a vital role, small businesses contribute more than 40% to the national GDP and employ nearly two-thirds of the private workforce.
Unfortunately, these small (but mighty) businesses are reporting a major impact due to the current trade war with the U.S. According to the latest Business Barometer report from the Canadian Federation of Independent Business (CFIB), 24% of small businesses in Canada say tariffs are having a strong negative impact, while another 46% report a slight negative impact.
Not surprisingly, the agriculture (42%) and manufacturing (37%) sectors were the most likely to report being strongly affected by tariffs.
The CFIB survey was carried out shortly after the U.S. announced reciprocal tariffs on April 2 and just before those tariffs were paused for 90 days on April 9.
Country-wide, the long-term business confidence index — based on expectations for the next 12 months — rose from a record low of 25.5 in March to 34.8 in April. This brings it back to levels seen at the onset of the pandemic but doesn’t negate the fact they were at the lowest ever seen.
Alberta also saw a modest improvement in April, with the long-term optimism index rising from 25.2 in March to 36.6. Despite the increase, confidence remains low by historical standards, causing small business owners to remind buyers of the importance of shopping local.
How to identify local products
To help identify Alberta products, the provincial government has created a “Made in Alberta” program, which their website calls a “voluntary labelling program with consistent standards for eligible Alberta-made products.” Business owners can contact 310-FARM or [email protected] to learn more.
The federal government has provided tips on how to identify products made in Canada as well. Buyers should look for the words “Product of Canada,” usually placed right next to the bar code. “Product of Canada” means the processing and labour are Canadian and a significant amount of the ingredients are also Canadian.
When using the “Made in Canada” claim, a qualifying statement must accompany it that clarifies whether the food product is made from imported ingredients or a mix of Canadian and imported ingredients.
The claim “100% Canadian” on a label means that all ingredients, processing, and labour used to produce the food are entirely sourced from within Canada.
In a recent CTV News report, a CFIB representative reminded buyers that 66 cents of every dollar spent in a local small business stays in the community, as opposed to 11 cents of every dollar when shopping at a multinational company.
Given the ongoing uncertainty around the trade war and its resolution, overall small business confidence is expected to stay subdued — especially in sectors more exposed to international trade. However, CTV reports that many businesses are making inroads through tactics such as increasing their exposure on social media sites such as TikTok and Instagram.
How can my business insurance help?
Although there’s no insurance coverage specifically designed for tariffs, certain types of business interruption policies may include supply chain extensions that can help lessen the impact, says the Canadian Underwriter. If you are a small business owner, it may be time to contact your insurance broker to find out what’s possible within your policy and inquire about your options.
The supply chain extension can cover lost income or additional expenses caused by delays or increased costs resulting from trade actions or tariffs.
Additional business insurance products can offer a greater safety net as well.
- Trade credit insurance protects businesses against non-payment by foreign buyers due to political or economic instability.
- Business interruption insurance can help cover lost income and operating expenses if a trade-related disruption halts or slows down operations.
- Cargo insurance for manufacturers and retailers provides coverage for goods in transit or storage, particularly important when supply chains are strained.
- Liability insurance is essential as businesses may need to navigate unfamiliar legal environments or contract disputes tied to changing trade rules.
Beyond insurance …
In addition to insurance, business owners can take proactive measures to lessen the impact of tariffs. Again, sourcing materials locally to reduce reliance on imported goods that may be affected by trade restrictions is a great place to start and may even result in cost savings. Some insurers are offering premium discounts to businesses that shorten their supply chains as the more complex and extended a supply chain is, the more opportunities there are for disruptions. Having a contingency plan in place is also essential, as even local supply chains are not immune to breakdowns.
Trust Lane’s for all of your business insurance needs
The experienced and knowledgeable insurance brokers of Lane’s can help explain all of the ins and outs of business insurance coverages. Just a sampling of the products we provide includes commercial auto insurance, commercial property insurance, commercial surety bonds, contract surety bonds, and contractors insurance. Contact us at our Calgary, Edmonton, Banff, and Alberta offices today.
