'The worst outcome for Canada is a bad deal. But the second worst outcome is ongoing uncertainty over Canada-U.S. trade'
Canadian business groups are urging the federal government not to rush into a trade agreement with the United States, warning that ongoing uncertainty is already affecting companies and their employees.
The call for caution comes after U.S. President Donald Trump imposed 35 per cent tariffs on a range of Canadian goods. Groups representing small businesses, steel producers, and other sectors say that “no deal is better than a bad deal,” according to a report from The Canadian Press (CP).
"A little more time now can deliver lasting benefits for an integrated North American economy — and that's well worth the wait," said Candace Laing, president and CEO of the Canadian Chamber of Commerce, in a statement, according to the report.
Laing noted that while many Canadian businesses benefit from tariff exemptions under the Canada-U.S.-Mexico Agreement (CUSMA), those not covered by the agreement are now facing significant new costs.
Canadian small businesses are showing resilience in the face of economic uncertainty, with a majority expressing cautious optimism about both their current position and the future, according to a previous CIBC report.
Certainty needed
Laing added that businesses in both Canada and the U.S. urgently need more certainty.
The Canadian Federation of Independent Business (CFIB) also raised concerns, warning that the lack of clarity is making it difficult for employers to plan for the future.
“The worst outcome for Canada is a bad deal,” CFIB president Dan Kelly told CP. “But the second worst outcome is ongoing uncertainty over Canada-U.S. trade. This is what small business owners now face” CFIB president Dan Kelly said in a statement. "But the second worst outcome is ongoing uncertainty over Canada-U.S. trade. This is what small business owners now face."
Larger companies, especially in the automotive and steel industries, have been dealing with the impact of U.S. tariffs for months. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said tariffs have made Canadian cars 25 per cent more expensive for American buyers, reducing cross-border sales and affecting revenues. “Automakers are so far absorbing the tariff costs but that can't go on forever because many have seen their revenues take a hit,” Volpe told CP.
Previously, the federal government announced it will remove all remaining federal exceptions from the Canadian Free Trade Agreement (CFTA), eliminating all 53 that have existed since the Agreement’s introduction in 2017.
