The Decibel - How small businesses are handling the trade war

Episode Date: September 1, 2026

The 50-per-cent tariffs from the U.S. that came into effect on Aug. 22 are hitting a long list of goods — everything from cosmetics and toiletries, to electronics, clothing, and chemicals. For Canadian small businesses selling to the U.S., the levies are having a big impact already; a 50-per-cent tariff means that, for example, a wedding dress that costs $1,000 will now cost $1,500 overnight. A survey from the Canadian Federation of Independent Business this summer, found that 40 per cent of its members would be affected by the tariffs; some expect to lose at least half of their revenue. Today, we hear from small business owners across Canada to get a sense of how they’re getting caught up between the U.S. tariffs and Canadian countertariffs. Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Canadian small and medium-sized businesses have been facing the brunt of Trump's trade war with Canada. For over a year and a half, waves of tariff announcements and walkbacks have led to a lot of uncertainty. And it became all the more precarious once the U.S. imposed its latest round of tariffs. Now, a new swath of Canadian goods are facing tariffs of 50%. Small businesses are feeling it more than ever, with tariffs targeting everyone from beekeepers to brewers to bridal designers. And things have been hard for these businesses for a long time. It's been a bumpy ride since 2020 between a pandemic and inflation.

That's Matt Johnston, the co-founder and CEO of Collective Arts, a Hamilton-based brewery selling craft beer, canned cocktails, and non-alcoholic drinks. For us, for beverage, a lot of changing consumer trends, and then throw a trade war into the mix that, then escalates kind of rapidly overnight. Yeah, it's a bit of a here we go again. Today, we're taking you across the country to hear from some of the small business owners who've been directly affected by the trade war as they try to make sense of this latest

escalation. I'm Michael Stein, in for Cheryl Sutherland, and this is the decibel from the Globe and Mail. The American tariffs that came in on August 22nd are hitting a long list of goods. It's everything from cosmetics and toiletries to electronics, chemicals, clothing, and flowers, among others. These are Canadian businesses being targeted, meaning when they send a product to the U.S., the importer pays a tax worth 50% of the item's value. So, for example, if someone in the United States ordered a Canadian dress that cost $100, there would be a $50 import duty that that customer has to shoulder.

The Canadian Federation of Independent Business, or CFIB, conducted a survey of over 1,800 of their members in late July and found that roughly 40% of them said they'd be affected. And of those people, a third said they expect to lose at least half their revenue as a result of these tariffs. And then, Canada hit back with retaliatory tariffs on U.S. goods effective September 8th, which might seem like it wouldn't affect Canadian business. but it does, given how integrated our economies are, and how often items ship back and forth across the border. So, what does that mean for someone like Karina Parsons? I own and am the primary artist at Potter by the Sea Studio out of St. John's Newfoundland. Karina specializes in these colorful mugs with hand-painted illustrations,

featuring characters like Miss Piggy or Super Mario Brothers. I like bright, fun. pop culture, a little bit political, a little bit 80s nostalgia, pottery, mostly for elder millennials. Karina says her shipping costs have nearly doubled over the last couple years. And like many business owners, she's had to learn a lot about Canada's free trade agreement with the U.S. and Mexico, known as USMCA or Kuzma, in order to avoid getting hit with tariffs over the last year. I had never thought about whether my products were Kuzma compliant. I had never thought about anything to do with that.

I was just making mugs. Last summer, the Trump administration hit Canadian goods with a 35% tariff unless they were USMCA compliant. That means that products had to be either wholly obtained or produced in North America. But to be able to claim a USMCA exemption, you had to declare and certify that your products met the rules of origin. Frankly, the last year has been difficult. if only because I have to fill out the Kuzma forms online. I have to fill them out on paper. And I'm not going to increase my price to pay me back for that time.

So I've really just been eating that time that it takes for going through all the hoops. Karina makes her pottery at home on the East Coast and sources her materials from within the country. But things like glaze and clay tend to go back and forth across the border before they get to her. I think that's the difficulty, right? Is that there's so many raw materials that are made in Canada and then sent to the, the U.S. to be manufactured, then ordered back to Canada as the final product. Like, there's so much back and forth. So running her business was already getting a lot more expensive.

And then the Trump administration's 50% tariffs hit Canada in late August. Immediately artisans on Instagram are sharing. I'm facing 50% tariffs. I'm facing 10%. So I had to look into it and I had to look at whether this actually affects me. It appears that it does. And like many artists across Canada, Karina's figuring out how, to make these ballooning costs make sense.

I'm in this kind of catch-22 where I'm already charging $200 Canadian for a mug. That's to pay me a proper wage and pay for all my costs. Now costs are getting higher. And I'm just, do I want to now charge $250 instead of $200? How many people are just walking away? And I don't know. And I don't want to increase the prices. I'm already charging 30 Canadian flat for pricing for shipping, which is like astronomical.

The last few days have felt like 10 days already. This is Richard Osro, a honey farmer just west of Edmonton in Parkland County, Alberta. You know, you get every emotion. You get scared. You get angry. But then I was mostly disappointed that we ended up in this position, that we were this vulnerable. The tariffs from late August also targeted honey. And Richard realized how unprepared they were. We should have been doing more. And so now it's... It's kind of been a wake-up call for us. Richard and his wife Amber are the co-owners of Good Morning Honey.

They've got a small team running 4,000 hives. Their honey gets shipped around the world, including across Canada. And some of that heads down to the states. It can be 10% of our business here at our company. And so that can be a substantial part of our income that helps us keep on going every year in the hundreds of thousands of dollars. And for honey farmers like Richard, the timing is especially challenging. This time of year is some of the busiest time of year you can imagine for beekeepers where we're finally harvesting our honey. So you, from spring and through summer, you're spending a lot of

money, a lot of time to get to this point. And when you're at this point, you're looking forward to getting the honey in the barrels and selling it so you can afford what you've been doing the past six months. And so the tariffs couldn't have come at a worse time. Despite the headache, and concern this is causing, Richard sees an opportunity too. I feel actually optimistic now. I think I'm seeing things a bit clear. I think there's a made-in-canada solution for all this. We don't need politicians to solve.

Well, we do need the politicians to solve the problem. But as Canadians, we can solve this on ourself because I've taken a deeper dive into the numbers on honey sales. And if you look at the numbers, So Canada produces about 93 million pounds of honey per year. About 70 to 75 million pounds of that is consumed domestically either on the table or into the ingredient market. And then we also export about 23 million pounds, half of that going to the United States on a regular basis. But then we turn around and we import about 23 million pounds.

It's like, why are we importing honey? when we have the capacity to consume as much as we produce. And while Richard plans to look into the support programs and new funding that Ottawa announced last week, he thinks we can do more to support each other. I want to see Canadians rallying together and seeing what they can do with their wallet so that tax dollars don't have to go into this. We can just go on business as usual, but business better than usual, supporting each other directly with something that they can, you know, put on their shelf or in their

cupboard at home. And that would make the problem easier. All you have to do, you pick up the jar, look for made in Canada, and choose Canadian. It's problem solved. It's that simple. After the break, we're heading to Ontario. It feels very strange to be in the industry directly that is being used as a, kind of bargaining chip. The chip Nicole Ralph Eisen is talking about is alcohol, which became a focal point when premiers pulled U.S. booze from the shelves last spring. Nicole works in Toronto's wine scene and is the director of operations for grape witches, which operates two bars and retail shops downtown. I'm calling from grape witches on Dundas. It's a busy bar and we just had a huge

tasting meeting in the other room where we tasted like 15 to 20 wines that just arrived, really exciting. Nicole is also a partner in Grapewich's importing business. Up until the booze ban, sourcing American wine was a big part of her job. We had these incredible relationships with these small producers in the U.S. We worked with some wineries from California, from New York, from Vermont. And, you know, when last February we were told that we were no longer able to work with them, the province turned around shipments that were in transit, and they've held on to the things that they have in their warehouse.

So we, you know, over the last year and a bit, we've done a lot of big kind of higher volume collaborations to put more Ontario wine on the shelves and to support the industry that way and to fill those holes. But replacing all that American wine they were getting with Canadian wine isn't as easy as it sounds, especially get-to-get from out of province. I mean, we do work with wineries from across Canada. you know, BC, Quebec, Nova Scotia, but just the interprovincial taxes that get applied to those products make them like really above most people's budget. And then in addition to that, you know, the shipping arrangements that are made, it's cheaper to ship wine from California than it is from most places in the world, including Quebec, you know, as close as Quebec is, it's cheaper to ship wine from California.

So there really, our hands feel very tied. There are no, no options, unfortunately. And Nicole isn't sure that Canadian wineries, facing Trump's tariffs, will be able to get the help they need from Ottawa's supports, like the Strategic Response Fund, which is designed to help Canadian businesses, whether the trade war. There's a piece in there around supporting food and beverage production and, you know, the qualifiers around having to have a kind of significant Canadian sort of export audience for that is sort of like,

what are wineries supposed to do? it has to be much more localized because they can't export to any significant degree because of those, you know, prohibitive interprovincial taxes. So I think that they're also hamstrunged. Like, sure, there may be some funding there for them, but in order to qualify for that funding, you know, they're supposed to show how their work contributes to a larger Canadian project. And I don't see how that's possible unless these interprovincial laws change. Matt Johnston, the CEO of Collective Arts, who we have.

heard off the top, is feeling the tariff pain in a way you may not expect. Unlike other parts of the industry, for breweries like mats, it's not just what's in the cans that's affected by these tariffs, it's also the aluminum cans themselves. The challenge is when the aluminum tariffs came on, you have Canadian-based aluminum that's going to the U.S. to be refined into Canadian cans and then ship backed up to Canada. So indirectly, we are being hit. But American companies are also being. and hit directly by it. It is nice to see efforts to put more Canadian canoe manufacturing back

and put more of that online. It is not at present any more economical just because there is so much pressure in the whole system. But we'd like to believe as more of that comes online that that takes a little bit of pressure off of us. And while a lot of businesses and politicians are pointing to the B-Canadian movement as a way forward, For Matt, it's important to be specific because he says there's a difference between a product being Canadian made and the company that makes that product being Canadian owned.

Because wine is very much of an origin story and even bourbon, you know it's from Kentucky or Tennessee or somewhere in that area. So wine, you see it immediately. It's organized on the shelf. But you go to the beer section and it's macros and micros. but it's hard to even distinguish who owns it or where it's made. So I'd love to see, you know, retailers lean in and Canadian owned and Canadian made. You know, I think we really need to lean in to that step further. How do we support local?

And if you're wondering how much of a difference ownership makes, this is what Matt points to. Back in 2023, the Canadian Federation of Independent Business found that for every dollar spent at a small business, an average of 66 cents stays in Canada. But for every dollar spent at a large multinational business, only 11 cents stays in the country. I'm hoping this is a wake-up call for all Canadians that if we truly value our sovereignty and supporting our neighbors and supporting our economy,

then we really need to lean in. Buying Canadian-made is good, but buying Canadian-owned is exponentially better. Noemi Vayancoeur is a clothing designer based in Quebec. Her brand, Noamia, has bridal line. We're a very, very small team of two. There's my fiancé who is doing all the things I hate, like accounting and paperwork and shipping,

which is a huge part of the work at the moment. And me, so me, I design mainly, and I sell online bridal guns and ready to wear. Around 30% of her clients are in the U.S. And since her gowns are made of 100% silk, they're subject to 50% tariffs. So, for example, if she was selling a thousand dollar dress, her client's now paying 1,500. So a lot of fashion designer, they just, I guess they have half or maybe a few percentage of their offer that will be with the tariff, that will be taxed. But for me, it's really almost everything I do, so it's hard to take.

She managed to send one dress to California just before the deadline. I just want to make sure it crossed the borders on time, but I was like maybe like we have a deal, so it's going to be okay. And then it's just all fell apart. So I just feel so sad, so, so sad because you build all this beautiful, healthy company. We're doing very good quality. And I just started to be known as a bridal wear as a bridal designer.

And just it's very hard. from there to do marketing and to just say to people, look at my bridal, my new collection just launched a few days ago and then, but you cannot buy it because obviously they won't buy the 50% tariffs. And while it's a business, Noamie says the relationship she builds with her clients is also personal. It's also, you know, person to person, they're writing to me and I know there, some people waited because bridal, I'm going to cry, Brideout customers, they think about it a lot. And sometimes, you know, we have a chat and I know it takes long and now some people, they cannot offer to travel.

Some brides, they came. I had brides from Portland from New York. This is very cool when it happens. I know, I mean, at some point the tariff is the exact same amount than a road trip to Quebec. So I'm just going to hope. And that there is a deal someday, but I don't know. It's very sad. And because Noamese operation is so small, she's not sure if government supports really apply to her. It seems that it's quite for more bigger companies.

Like I saw millions in terms of revenue. We're not that business. For now, she's thinking about how to keep her business afloat. So if US is out, like I said, 30% it's a lot. I don't know. Maybe I have to return to ready to wear more and just return to that. I will find a way. I'm a little, like I understand the bigger companies. It's like so many pressure, so many employees and everything work.

It's my fiance and me. So it's always possible to turn the boat. I just hope that it's going to be like more Canadian support and Canadian War II out. and that is, at the end, it balance. But I don't know. That was Karina Parsons, Richard Azaro, Nicole Ralph Eisen, Matt Johnston, and Noamie Vaiancoeur. That's it for today. I'm Michael Stein, in for Cheryl Sutherland.

Ali Graham produced this episode. I produce the show along with Madeline White and Rachel Levy McLaughlin. Our editor is David Crosby. Adrian Chung is our senior producer. and Angela Pichenza is our executive editor. Thank you for listening.