- Canadian SMEs sound alarm with ongoing trade tensions and tariff pressures
- Half feel the current landscape makes it impossible to make strategic planning and growth decisions
- Small businesses report low levels of confidence and preparedness
Amid rising trade tensions, new research from bookkeeping automation platform, Dext, reveals widespread financial unease among Canadian SMEs. Over half (55%) of Canadian SME leaders say they’re in the most unpredictable business environment they’ve experienced in the last 10 years, and 50 per cent say the current landscape makes it impossible to make strategic planning and growth decisions.
The survey, which was conducted among 500 Canadian SME leaders across various industries, regions, company sizes, and stages of growth, reveals that many SME leaders are not prepared for the risks that could impact cash flow and continuity due to ongoing trade wars, currency instability, and limited access to emergency funding.
“The drawn-out and unpredictable trade conflict with the U.S. is keeping many Canadian SME leaders up at night,” says Sabby Gill, CEO of Dext. “Unlike inflation or staffing, tariff escalation is largely out of their hands, and leaders are showing a lack of confidence and preparedness, which reflects feelings of helplessness. For Canada’s globally connected businesses, the ongoing trade wars pose a significant cash flow risk.”
Tariff-related costs and global trade tensions
Only 16 per cent of SME leaders are very confident and well prepared to manage a rise in tariff-related costs or a long-lasting global trade war. Conversely, 23 per cent say they are not confident, painting a picture of increased vulnerability as trade wars continue to loom large, five months after the initial threats.
The issue is particularly acute in retail and hospitality, where 36 per cent of leaders feel unprepared. In an industry that already operates with thin profit margins, these sectors are highly exposed to the rising costs of importing consumer goods, ingredients, and packaging, leaving many at risk of margin erosion. Confidence is also low among SMEs in manufacturing, where 34 percent report being unprepared due to their exposure and dependencies on the U.S.
Currency volatility between CAD and USD
Amid exchange rate fluctuations and speculation about the potential divergence in rates between Canada and the U.S., less than a quarter (23%) of SMEs feel strongly confident they’ll be able to manage currency risk. Businesses with fewer than 10 employees reveal the least confidence (20%) dealing with exchange rate fluctuations, while large SMEs with 100-249 employees show the most confidence (32%).
Across sectors, retail, leisure and hospitality businesses report the lowest levels of confidence at just 17 per cent, likely due to the effects that currency shifts can have on businesses importing goods from the U.S. and on disposable income for Canadians.
Emergency funding confidence remains uneven across SMEs
Despite ongoing macroeconomic pressures, 23 per cent of SME leaders feel very confident and well prepared to secure emergency or bridge funding during cash flow gaps. A further fifth describe themselves as confident but not well prepared. This leaves a significant proportion of businesses with unclear or inadequate funding strategies.
Smaller businesses again show the most vulnerability. Just 16 per cent of firms with under 10 employees report high confidence in accessing emergency funding, compared to over a third (35%) of larger SMEs with 100-249 employees.
Smaller SMEs carry heavier financial uncertainty
Across all risk categories surveyed, from tariff escalation to emergency funding access, businesses with fewer than 10 employees consistently report the lowest levels of confidence and preparedness. Confidence steadily increases with company size. SMEs with 100–249 employees show significantly higher levels of resilience. This group is also least likely to report being unprepared, suggesting greater access to planning tools, financial buffers, and strategic foresight.
These disparities underscore a persistent resilience gap between Canada’s smallest businesses and their more established counterparts, a critical consideration for policymakers and financial service providers alike.
Sabby Gill adds, “The fact that smaller companies are struggling the most to prepare in this environment is deeply concerning. Support and help for SMEs of all sizes is important. Access to the forecasting tools and advice that larger firms rely on can make or break a smaller company built on the back of passionate and successful entrepreneurs. Despite what feels like an impossible business environment, small businesses using data-driven tools to forecast and mitigate the financial impact of external shocks will be in much better shape and have greater confidence despite being in an unpredictable business environment.”
The survey findings are part of Dext’s ‘Built for Bigger Things’ campaign, which highlights the need for financial visibility and decision-making tools for small businesses navigating growth as global macroeconomic pressures intensify.
About the data
Commissioned by Dext, Censuswide surveyed 500 SME leaders aged 18+ across Canada from June 6th-11th 2025.
About Dext
Dext, part of the IRIS Software Group, is the leading provider of AI-powered bookkeeping automation. Founded in 2010, the company empowers businesses, accountants, and bookkeepers to thrive through cutting-edge artificial intelligence and machine learning technology that simplifies accounting processes and enables smarter, more timely financial decisions.
Trusted by thousands of professionals worldwide, Dext integrates with major accounting software and connects to over 11,500 banks, suppliers, and marketplaces.
In 2024, Dext joined IRIS Software Group and continues to work directly with its clients to create a more seamless, end-to-end accountancy workflow. For more information, visit www.dext.com.
