One in three affected Canadian exporters expects revenues to fall by half, raising red flags for the mortgage outlook
Canadian mortgage brokers advising clients in manufacturing, forestry, and agriculture may soon face harder conversations.
New research by the Canadian Federation of Independent Business (CFIB) shows that 40% of small exporters to the US have products directly captured by proposed 50% tariffs set to take effect on August 19.
More than one in three expect revenues to fall by at least half if the duties proceed.
The survey of 1,833 CFIB members, conducted between July 28 and August 6, found that 77% of exporters with affected products anticipate a revenue decline if the tariffs are implemented.
Of those, 35% expect revenues to drop by at least 50%, and 5% foresee revenues falling to zero entirely.
Awareness is near-universal. Ninety-three percent of businesses exporting to the US said they were already familiar with the proposed tariffs before participating in the survey, with that figure consistent across provinces, sectors, and business sizes.
Revenue losses that follow clients home
Clients whose businesses export goods to the US — particularly in sectors such as wood and forestry, industrial manufacturing, or food and beverage — face income disruption that could affect their debt-servicing capacity, delay property purchases, or complicate upcoming mortgage renewals.
Prolonged trade uncertainty is already weighing on buyer confidence and the Bank of Canada's rate outlook heading into the second half of 2026.
Among exporters who report affected products, the largest categories include industrial machinery, equipment and manufacturing components (28% of product mentions), wood, forestry and building products (18%), plastics, polymers and packaging (12%), and agricultural, food and beverage products (11%).
Arts, jewellery and creative products account for a further 10% of mentions.
Overall, more than nine in 10 exporters to the US express at least some level of concern about the proposed tariffs, with 66% describing themselves as either extremely or very concerned.
Manufacturing and wholesale businesses report higher-than-average alarm, as do firms with 20 to 49 employees.
Dan Kelly, CFIB president, said the situation leaves small firms with few palatable options.
"Few small firms can absorb a 50% tariff, and few can pass that cost on to customers while staying competitive," Kelly said.
"All eyes are on our negotiations with Washington as the stakes are very high for Canadian SMEs."
A wait-and-see mode with real consequences
Competitiveness concerns are compounding the anxiety. Some 78% of surveyed exporters believe a 50% tariff would render their products uncompetitive in the US market, and 75% say the duty would push them to actively reduce reliance on American buyers.
Despite that, 78% say they remain in a wait-and-see mode as trade policy uncertainty persists, a holding pattern with direct implications for business investment, hiring, and household income stability.
Meanwhile, underlying export patterns have already begun to shift: between 2024 and 2025, the number of Canadian small and medium-sized enterprises (SMEs) exporting goods to the US declined by 1.4%, according to Statistics Canada, while the number exporting to non-US markets rose by 6.6%, suggesting diversification is already underway — albeit slowly.
Brokers watching a more fragile economic backdrop
The CFIB findings arrive as mortgage brokers across Canada are already navigating a fragile small-business and housing market outlook shaped by trade uncertainty.
Clients working in tariff-exposed sectors — forestry, manufacturing, agriculture — represent a meaningful slice of mortgage applicants in provinces such as British Columbia, Quebec and Ontario, and sustained revenue pressure on those businesses can translate into weakened borrowing capacity and delayed property purchases.
The Bank of Canada has held its overnight rate at 2.25% since October 2025, and economists are monitoring whether prolonged trade friction could shift that posture. Tracy Valko, founder of Valko Financial, has warned that mortgage rates may remain volatile as US tariff risks and global economic pressures persist.
With August 19 approaching, CFIB is pressing Ottawa for a resolution.
"Small businesses have been dealing with the whiplash of trying to keep up with sudden changes and threats," Kelly said.
"The prospect of losing sales, slashing prices, or having to pivot to new markets altogether, is generating a lot of small exporter anxiety."
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