A new report by the Canadian Federation of Independent Business (CFIB) found that 49 per cent of all automotive businesses in Ontario have either paused or cancelled investments as a result of the U.S.-Canada trade war.
Data from CFIB’s report shows that this figure translates to a potential $2.9 billion in missed investment over the next year. They also noted that 65 per cent of Ontario’s auto businesses have been impacted by U.S. tariffs, with the average business seeing a 13 per cent decline in sales.
“Uncertainty, market volatility, and increased costs are forcing auto business owners to make difficult decisions to keep their doors open,” said Joseph Falzata, the report’s co-author and CFIB’s policy analyst for Ontario, in a statement. “The desire to grow is there, but with such massive revenue losses, businesses are more focused on keeping their doors open than expanding their operations.”
CFIB’s data also revealed that Ontario’s provincial government programs meant to help auto businesses overcome tariff challenges are unlikely to have an impact on the average small business. CFIB named the Ontario Automotive Modernization Program (O-AMP) and the Ontario Vehicle Innovation Network (OVIN). They said these programs may only be used by 1-2 per cent of small auto business owners, while the Ontario Together Trade Fund (OTTF) is expected to be used by 1 per cent of small businesses.
“While these programs were created with good intentions, the reality is that many small business owners have never heard of them and are not eligible,” said Falzata in a statement. “The Ontario government needs to focus their efforts not just on the major auto manufacturers, but also on the many small businesses that feed into the province’s auto eco-system.”
CFIB said the provincial government should focus on improving small business access to automotive-focused programs. They have also provided other recommendations, which can be viewed here.
