CFIB warns Trump’s Feb. 1 tariffs could potentially trigger ‘medium-sized recession’

Giles Gherson, the president and CEO of the Toronto Region Board of Trade, says Trump's tariffs on Canada are 'completely unjustified.'

Hours before U.S. President Donald Trump’s tariffs are set to take effect, Canadian businesses are warning of potential supply chain disruptions and rising costs as they brace for the impact of retaliatory measures.

“Some businesses have (already) been trying to diversify their markets,” said Dan Kelly, president of the Canadian Federation of Independent Business (CFIB). “We’re going to have to grit our teeth and bear it until cooler heads prevail.”

The confirmation came on Friday, as White House Press Secretary Karoline Leavitt disputed earlier reports that tariffs could be delayed until March. 1.

“I was just with the president in the Oval Office, and I can confirm that tomorrow, the Feb. 1 deadline that President Trump put into place… continues,” she said.

Canadian steel experts, already scarred by past tariff disputes, confirmed to CTV News that they, too, are particularly on edge, declaring Trump’s tariffs as a “serious threat.”

While some U.S. industries face possible exemptions, the broader economic fallout could hit Canadian small businesses hardest.

Kelly warns that going ‘tariff for tariff’ could have drastic consequences, leading to higher prices and further strain on businesses still reeling from the pandemic.

“Small businesses need certainty,” he said, “This will have a huge impact on Canada, potentially triggering a medium-sized recession.”

Ontario’s convenience store owners taking a ‘wait-and-see’ approach

Terry Yaldo, chair of the Ontario Convenience Association and owner of Windsor’s Midway Convenience store for over 25 years, tells CTV News he’s taking a more cautious approach to dealing with Trump’s tariffs.

“I haven’t seen any uptick in foot traffic that relates to the tariffs,” he said. “I’m not sure what products are going to eventually be affected... but I know indirectly, the longer this goes, the bigger of an impact it’s going to definitely have.”

Yaldo says despite repeated threats, he still doubts the president will follow through or that these tariffs will last long.

“I don’t know if there’s too much we can do to really prepare for them. Other than possibly stockpiling a few items, at the end of the day, that’ll only go so far,” he said.

How are other Canadian businesses responding?

Kelly says he’s spoken to dozens of businesses in recent weeks, explaining that many of them are already seeking ways to hedge against potential price increases, such as exploring new suppliers outside of the U.S.

“We’re not going into this from a source of strength and that’s why this has a potentially even greater impact,” he said.

Small businesses facing pressure for the next four years

While Kelly acknowledges the potential harm the tariffs could inflict, he also stresses the fragile state of Canadian small businesses in the wake of the pandemic. He explains many of them are “still weak” and in recovery mode.

“Small businesses are going to need to sleep with one eye open… probably for the next four years,” he added.

“Many of them had to take on tens of thousands of debt just to survive the pandemic… and that debt is still on their books.”

If tariffs only last for a brief period, Kelly believes Canada may be able to recover quickly but still warns of a “medium-sized recession.”

How will tariffs impact consumer and owner decisions?

Despite his uncertainty, Yaldo remains wary of the indirect impact of tariffs citing, “people got to pay more for goods in general, whether it’s from here or not,” he said. “The convenience store trip is not always the most important trip of the day. So that’s sometimes one of the areas that get hit.”

He also points to rising costs and the carbon tax already placing pressure on the industry.

“People are going to think twice before either expanding, investing, or continuing to run a business in Ontario,” he said. “As a country, we have to be competitive. We have to really help small businesses grow and give them the tools that they need to flourish.”

With files from CTV’s Rachel Aiello