The trade war is clearly on the minds of small business owners. This is especially the case for those businesses that are more exposed to tariffs with optimism among businesses trading internationally lower than that of firms dealing only in Canada.

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 on them so far and 46% a slight negative impact.

Businesses in the agriculture sector (42%) and manufacturing (37%) were the most likely to report a strong negative impact from tariffs.

The CFIB survey was conducted just after the announcement of U.S. reciprocal tariffs on April 2 and just before those same reciprocal tariffs were paused for 90 days on April 9.

The national long-term index* (which is based on 12-month forward expectations for business performance) increased, going from 25.5 in March (the lowest level on record) to 34.8 in April—about where things stood at the start of the pandemic.

In Alberta, the long-term optimism index also improved, but, as with the national index, the increase was relative to the lowest reading on record. As of April the index was a still-weak 36.6 compared to 25.2 in March.

Given the ongoing uncertainty about how the trade war will play out and when it will end, we expect small business confidence to remain muted overall with trade-exposed sectors affected more than others.

*The data reflect responses received from April 3 to 8. Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger outnumber those expecting weaker performance. An index level near 65 normally indicates that the economy is growing at its potential. The long-term optimism index is based on how businesses expect to be performing in 12 months while the short-term optimism index is based on how businesses expect to be performing in 3 months.

Answer to the previous trivia question: Easter always falls on a Sunday between March 22 and April 25.

Today’s trivia question: How many federal electoral districts are there in Alberta?