Small business confidence at an all-time low amid trade war: CFIB

Some small businesses are feeling pessimistic as the trade war heats up.

Small businesses are feeling the pressure as the trade war between Canada and the U.S. ramps up.

According to the Canadian Federation of Independent Business (CFIB), small business confidence is at an all-time low.

“The ratings we see in Canada, and across Nova Scotia too, are below, in terms of long-term confidence, what we would see during the pandemic, even lower than the 08-09 financial crisis, and lower than we saw during 9/11, so these are really significant times,” said Duncan Robertson, CFIB Legislative Affairs Director for Nova Scotia.

The CFIB’s Business Barometer has been in use since 2000. The long-term index shows confidence was nearly cut in half between February and March and now sits at 25 index points.

The index is measured on a scale of zero to 100. A reading below 50 means more owners expect their business to be weaker over the next 12 months.

The short-term snapshot, which looks at the next three months, is slightly better but still not good:

• Canada: 31.2 (down 16 index points)
• New Brunswick: 46 (down 5.5 index points)
• Nova Scotia: 32.6 (down 23.1 index points)
• Prince Edward Island: 25 (down 26.4 index points)

“We’re seeing some worries around the increase in the cost of doing business with a weaker Loonie, as well as already seeing some cancellations or delayed orders south of the border,” said Robertson.

“That impact has already happened and is currently happening, and this is the result that many small businesses are faced with.”

Robertson said businesses need local and national certainty to combat uncertainty from the U.S.

“There are several ways: interprovincial trade barriers, removing those. If it’s difficult to trade south of the border, making sure we can trade easily with other provinces east to west is crucial, as well as for government to look at the cost they’re placing on small businesses,” he said.

Dealing with hurdles

Daisy Jo’s Boutique in Dartmouth has been open for about a year and a half. The business has already dealt with the pressures from high inflation, and now it’s navigating a trade war.

“It’s challenging. It is another hurdle,” said owner Tracey Chisholm-MacDonald. Despite her concerns, she said the recent push to buy Canadian makes her optimistic.

“We have been seeing a lot of customers, return customers, new customers, coming in, looking to support Canadian brands, Canadian businesses. We’ve had lots of interest in that and thankfully we have lots of Canadian brands, so it’s been great,” she said.

“We find that people are still travelling, still doing their Spring wardrobe shopping, so March has been busy for us so far. It’s been busier than last year.”

Business owners are losing confidence according to the CFIB but Chisholm-MacDonald hopes continued local shopping will bring a boost.

“It’s a big deal for small business owners right now, and we’d like everybody to support when and where you can.”

The CFIB Business Barometer results are based on 1,065 responses received from March 5 to 7 from a random sample of members. Findings are accurate +/- 3.0 percentage points 19 times out of 20.