Calgary businesses brace for impact: survey reveals deep concerns over U.S. tariffs

A recent survey shared with our members revealed 85% of members expect a significant impact on their operations due to tariffs driven by reduced consumer confidence and demand poor economic conditions.

The ongoing tariff situation with our largest trading partner – the United States – is both rapidly changing and deeply impacting businesses across size and sector.

To better understand the anticipated impact on Calgary businesses, the Calgary Chamber launched a survey to our membership in early March. We asked how businesses believe they may be impacted by tariffs, what information they might need to navigate the everchanging trade landscape, and what policy solutions our membership would like Canadian governments to prioritize.

Tariffs expected to affect nearly all businesses

Overwhelmingly – and not unexpectedly – Calgary’s business community anticipates significant impacts from the imposition of tariffs. Results showed that 44 per cent of respondents believe that tariffs will have a high or extreme impact on their business, compared to only 15 per who expect low or no impact from tariffs.

If the tariff situation persists, some sectors are likely to be more impacted than others. Energy, automobile and vehicle manufacturing, and aluminum production all send more than 90 per cent of their exports to the United States. Small businesses, which account for 42 per cent of Canadian exports to the U.S., will also be heavily impacted, as they often have fewer resources and a smaller buffer to absorb major shocks. Lastly, discretionary sectors such as retail and hospitality may feel a disproportionate impact, with Canadians pulling back on spending in light of economic concerns and lower consumer confidence.

The tariffs are impacting not only bottom lines directly but are also impeding consumer confidence and economic conditions. The combination of the cost of U.S. tariffs, the cost of retaliatory tariffs, heighted inflation and depressed consumer confidence are all challenging for businesses to navigate – however two-thirds (66%) of our members are most concerned with a possible recession or inflation broadly, indicating the knock-on effects of tariff threats may be more challenging than the tariffs themselves.

Moreover, only half of respondents believe that they have adequate information and resources needed to understand and mitigate the impacts of tariffs on their businesses. Those who indicated they did not have adequate information identified regular email updates from groups like the Chamber and consistent communications from government officials as useful tools to understand the quickly evolving tariff situation.

Businesses are looking for quick and strategic action to mitigate impact

When it comes to action, businesses recognize that governments must act expeditiously to mitigate the impacts of tariffs levied by the United States. In the face of this threat, we must work quickly to improve our economic competitiveness and diversify our trade markets. Our membership overwhelmingly aligns with these goals: 92 per cent of respondents want governments to work to remove interprovincial trade barriers, 86 per cent believe governments should prioritize red-tape reduction, and 78 per cent believe governments need to work collaboratively to develop trade-enabling infrastructure.

However, businesses seem less aligned when it comes to retaliation measures. Less than one quarter of respondents would like to see Canadian governments impose dollar-for-dollar tariffs as a response to U.S. tariffs threats, yet nearly half (47 per cent) would still be supportive of targeted retaliatory tariffs. Additionally, just over two thirds of respondents were supportive of non-tariff retaliatory measures, such as removing American liquor products from retailers in Canada.

It's clear that the business community is deeply concerned about the impacts that the ongoing trade war will have on businesses, business operations and the Canadian economy broadly. That’s why the Calgary Chamber is fiercely advocating to all orders of government to ensure businesses – the cornerstone of our economy – are protected, and perhaps even have the chance to get ahead.

Our advocacy relies on input from our members, and we are always eager to hear from you – either sharing your experience, providing input on our recommendations to government, or to let us know how we can serve you during this time of uncertainty and rising costs. If it matters to you, it matters to us.

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Latest on tariffs

• The United States, starting on March 4th, levied a tariff of 25 per cent of goods not covered by the Canada-United States-Mexico Agreement (CUSMA), excluding energy products and potash not covered by CUSMA which will face a 10% tariff. Currently the Trump Administration has stated they will announce a tariff rate for each trading partner on April 2nd, then give the countries an opportunity to avoid this levy by lowering their own tariffs or addressing other American grievances.
• The Canadian government imposed retaliatory tariffs, in response to the March 3rd tariff threat, on specific products to make American goods more expensive in Canada, negatively impacting U.S. companies and ultimately, consumers. While necessary from a diplomacy perspective, this increases the cost of many goods sold in Canada by 25%. Where there are substitutes, Canadians can switch to those to avoid paying higher prices; however, where there are no alternatives, Canadians should expect costs to rise.
• The Alberta government will be modifying procurement practices for government agencies to prioritize Albertan and Canadian options. Additionally, the AGLC has been directed to immediately cease the purchase of American liquor products and VLTs. Grocery and other retailers will be assisted with labelling Canadian products and will be asked to voluntarily purchase their stock from Albertan and Canadian businesses. Lastly, to address interprovincial trade barriers, the Government of Alberta has indicated it will enter free trade and mobility agreements with any other willing Canadian provinces and territories.   
• The City of Calgary has indicated they will develop a tariff tracker to understand the impacts to Calgary, adjust their procurement policy and create a webpage that helps businesses understand available substitutes for their goods. 

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