Two-thirds of businesses bracing for negative impact of U.S. tariffs: Ontario Chamber

(Toronto – February 19, 2025) – Two-thirds of Ontario businesses expect U.S. tariffs to have a negative impact on their business in 2025, but almost half feel confident in their ability to adapt, according to a new survey for the Ontario Chamber of Commerce (OCC).

The survey, conducted for the OCC by Leger from February 4-10, 2025, also showed that notwithstanding the 30-day negotiating period agreed to by the Canadian and U.S. governments, even the threat of tariffs has damaged business confidence in Ontario. While a separate OCC-Leger survey completed in December found 26 percent of businesses were confident in the province’s economic outlook, the percentage plunged to 15 percent when tariffs were on the table.

“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,” said Daniel Tisch, President and CEO of the Ontario Chamber of Commerce. “Since business confidence affects investment and employment decisions in both Canada and the U.S., the need for clarity, stability and predictability is urgent.”

Key Findings

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 navigate 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%).

About the Survey: The survey was conducted using Leger’s online panel, which has more than 500,000 members nationally and a retention rate of 90%. The survey methodology adheres to stringent quality assurance measures, ensuring high-quality standards throughout the data collection and analysis process. 420 business decision-makers across Ontario participate in the survey between February 4th and February 10th, 2025.

About the Ontario Economic Report (OER): The OER is the landmark research platform of the OCC offering a unique perspective on the experience of businesses of all sizes across the province. The OER is a data-driven, evidence-based document rooted in the OCC’s annual survey of its members, the Business Confidence Survey. Click here to access the report. 

About the Ontario Chamber of Commerce

The Ontario Chamber of Commerce (OCC) is the indispensable partner of business and Canada’s largest, most influential provincial chamber. It is an independent, non-profit advocacy and member services organization representing a diverse network of 60,000 members. The OCC convenes, mobilizes and empowers business and local chambers in pursuit of its purpose: to bring inclusive and sustainable prosperity to Ontario’s businesses, workers, and communities.

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For more information, please contact:

Julie Martini
Vice President of Public Affairs
Ontario Chamber of Commerce
juliemartini@occ.ca | Phone: (647) 269-0155