Businesses in the agriculture industry in Canada are facing mounting uncertainty as U.S.-Canada trade tensions and Chinese tariffs drive the sector’s confidence to historic lows, the Canadian Federation of Independent Business reports.
The confidence small businesses have in Canadian agriculture took a nosedive in March, down to 21.3 index points, compared to 49.1 points in February.
This marks the lowest level ever recorded by the Canadian Federation of Independent Business — below the COVID-19 pandemic and the 2008 financial crisis lows.
Niagara-on-the-Lake’s fruit growers, wineries and related suppliers are particularly vulnerable to rising U.S. tariffs and China’s 100 per cent duties on canola oil, peas and pork, the federation says.
“Chinese tariffs are coming at the worst possible time given the ongoing uncertainty in our trading relationship with the United States,” said Simon Gaudreault, the federation’s chief economist and vice-president of research.
The federation’s bilingual policy analyst, Juliette Nicolaÿ, said growers nationwide are delaying investments and crop planning amid tariff uncertainty, and Niagara producers will have to navigate ‘complicated’ supply chain decisions.
“Some farmers have delayed expansion plans, such as increasing the wage of their employees, delayed plans of investments, so it’s very worrisome,” said Nicolaÿ.
The federation expects agri-businesses nationwide to raise prices by 3.7 per cent to offset losses, with grocery chains additionally raising prices for items at the cash register.
Niagara consumers could see higher grocery costs as local producers pass on expenses.
Chronic labour shortages and red tape compound challenges for NOTL farmers, Nicolaÿ said, stating that the federation calculates most farmers “spend 32 days just filling out red tape” paperwork, which could be used to focus on operations.
While 7 per cent of agri-businesses plan layoffs compared to 19 per cent across all sectors, less demand risks inventory not getting sold, she added.
Nicolaÿ also stressed indirect agricultural impacts on producers that don’t trade with the U.S., such as Ontario’s hog farmers, who may still struggle to feed their livestock because of impacts on corn farmers who are affected by U.S. tariffs.
The Canadian Federation of Independent Business is urging policymakers to cut red tape and expand interprovincial trade.
“Shopping local small businesses is really important because every dollar spent here keeps 66 cents in the community,” said Nicolaÿ.
Ontario’s small business optimism ranks lowest nationally at 23.4 index points.
