‘Protecting Canada's existing CUSMA exemptions must remain government's top priority’
Two-thirds of small businesses (64%) say Ottawa should take the time needed to secure favourable terms in a renegotiated Canada-United States-Mexico Agreement (CUSMA), even if it means a longer wait, according to new research from the Canadian Federation of Independent Business (CFIB).
CFIB's latest survey data shows that only 16% of small business owners would prefer a quicker but potentially less favourable agreement, compared with the 64% who support a longer negotiation process aimed at securing the best possible terms.
"Small business owners are frustrated. The ongoing uncertainty around tariffs and trade has delayed real decisions on investment and growth. Protecting Canada's existing CUSMA exemptions must remain government's top priority," said Dan Kelly, CFIB president, in the release.
Kelly added that small businesses are contending with several major pain points beyond the broader negotiation timeline, including sectoral tariffs on steel and aluminum and difficulties for small-volume exporters in proving CUSMA compliance.
On June 2, Canada formally called for a 16-year renewal of the CUSMA.
Cross-border business relationships have weakened sharply
According to CFIB, the trade war has taken a measurable toll on Canada-U.S. business ties. The organisation found that 75% of small and medium-sized enterprises (SMEs) said the tariff fight had strained their relationships with U.S. partners or clients as of April 2026, up sharply from 49% in March 2025.
Only 40% of small firms now consider the U.S. a reliable trading partner, CFIB reported. This is a significant shift in sentiment over a relatively short period, and it reflects how persistent the trade dispute has become for Canadian business owners managing American supply chains and client relationships.
And now, businesses are diversifying away from the U.S. market.
Nearly half (48%) of SMEs trading with the U.S. have shifted to non-U.S. suppliers or customers, CFIB's research found. Of those that diversified, nearly three-quarters moved toward domestic markets within Canada.
Beyond domestic options, Asia (40%) and European Union countries (39%) emerged as the next most common alternatives for small businesses looking to reduce their dependence on the U.S. market. However, CFIB noted that high shipping costs, border delays and complex customs procedures continue to limit how far businesses can diversify in practice.
"While business owners are doing what they can to diversify their trade, we're never going to be able to entirely replace the 340-million-person market that exists right along our border. That's why it's so important to get this right and get a deal that business owners are confident will hold for years to come," Kelly said. This matters to HR professionals because businesses unable to fully diversify remain exposed to U.S. trade volatility, meaning workforce stability at these firms is likely to stay tied to the pace and outcome of CUSMA negotiations.
Call for simpler rules
CFIB executive vice-president of advocacy Corinne Pohlmann said negotiators should prioritise making CUSMA more accessible to small firms, streamlining customs rules at the border and clarifying rules of origin as talks continue.
"As negotiators look ahead to the next version of the agreement, they need to understand it's not an easy process for small businesses to navigate. Unclear rules of origin, and high compliance and administrative costs mean some small firms are forced to weigh paying tariffs instead of using CUSMA," Pohlmann said.
"We can do better. Ottawa must ensure that small business voices are included in trade negotiations and secure a deal that is clear, accessible and works for businesses of every size," Pohlmann added.
Canadian companies were urged to prepare for possible disruption as the first formal review of the CUSMA begins this summer.
"Nearly 160 organizations across the United States, Canada and Mexico are sending the same message today: CUSMA works for North American agriculture, and the July 1 review is the moment to preserve what's working," said Greg Northey, president of the Canadian Agri-Food Trade Alliance, in a previous statement emailed to Canadian HR Reporter.
