Crisis of Confidence: New survey reveals Ontario businesses are bracing for U.S. tariff impact

As Canada’s travel and tourism industry wrestles with the possible fallout from the Trump Administration’s tariff threats and the potential impact on its business outlook, the Ontario Chamber of Commerce (OCC) has released a new survey of its members that reveals that two-thirds of Ontario businesses are bracing for a negative impact from U.S. tariffs in 2025.

However, the OCC also found that close to half of those surveyed remain confident in their ability to adapt.

The key findings of the OCC survey — conducted by Leger from Feb. 4 to Feb. 10, 2025 – highlight that “even the mere threat of tariffs has already dented business confidence in Ontario.”

Tariff threat harms business confidence

• With potential tariffs leading the news during the week of the survey, six in ten (60%) Ontario business decision-makers expressed a lack of confidence in Ontario’s economic outlook, with more than a quarter (28%) indicating they were not at all confident.
• Eighty percent indicated that tariffs had a negative impact on their confidence, with 40% identifying a significantly negative impact.

Businesses bracing for negative impact on their operations

• Two-thirds (66%) of respondents expect that U.S. tariffs on Canadian goods would have a negative impact on their business. One-quarter (25%) expect no impact.
• A majority (56%) percent expect the impact of Canadian tariffs on U.S. goods to also be negative. Three in ten (31%) expect no impact.
• Overall, in the next six to twelve months, two-thirds (67%) expect their own business to be negatively impacted, compared with one-fifth (21%) expecting no impact.
• The greatest anticipated impacts include decreased sales/revenue (41%), increased cost of raw materials (40%), changes in customer demand (33%) and supply chain disruptions (31%).

Almost half of businesses believe they can adapt

• A plurality of businesses (48%) are confident in their ability to ongoing trade tensions between Canada and the U.S. Only 15% lack confidence in their ability to adapt, with 32% expressing a neutral view.
• Adaptation strategies include increasing prices (25%), diversifying suppliers (19%), reducing their workforces (13%), reducing prices to maintain U.S. clients (8%), or seeking government assistance (7%).
• In assessing the impact of tariffs on their industry, many anticipate a shift in market focus (29%), innovation in products/services (21%), consolidation of businesses (19%) and increased automation (11%).
• Three quarters of businesses would not consider relocating their business due to U.S. tariffs. Of those that would, only 6% would consider relocating to the U.S.

Businesses seek support and resources to adapt and diversify

• When considering support or resources to help businesses adapt to U.S. tariffs, financial assistance is mentioned most often by Ontario business decision-makers (39%), followed by trade advocacy and information and guidance (35% each), and more networking opportunities (20%).

Daniel Tisch, President and CEO of the Ontario Chamber of Commerce, observed that: “While confidence in the Ontario economy was on the rise entering 2025, the threat of U.S. tariffs has erased those gains – and two-thirds of businesses expect to feel the pain.”

Tisch continued: “Since business confidence affects investment and employment decisions in both Canada and the U.S., the need for clarity, stability and predictability is urgent.”

Go to www.occ.ca for more.