As Canada’s Minister responsible for Canada – U.S. trade fights off escalating American threats of further tariffs, Canada’s small business community, those run by immigrant entrepreneurs and newcomers, is bracing for a hit.
The headlines focus on the big industries, but it is first-generation business owners who are struggling. Newcomer entrepreneurs who are operating on razor-thin margins with limited credit histories are now fighting to survive. With small businesses making up 98.1 per cent of all employer businesses in Canada, the pressures described above aren’t a niche concern — they touch the backbone of the economy.
“We’ve seen a lot of companies where the U.S. market was the majority of their market share experience a sharp dip in business,” noted Michael Forrest, founder of the Canadian Black Chamber of Commerce (CBCC), in an interview with New Canadian Media. “Some of our member businesses have had to close their doors because they simply cannot compete under these tariff pressures.”
Forrest emphasized that newcomer entrepreneurs face structural hurdles distinct from established firms. Newcomer-led businesses are demonstrating resilience by seeking alternative growth paths.
“Newcomers are actively starting new businesses and applying for venture loans at high rates,” Forrest observed, referencing national business development trends and data from the Federation of African-Canadian Economics (FACE). He added that many are leveraging heritage networks to establish trade corridors outside North America. “The Black business community connects with over two billion people globally. Expanding international trade beyond the U.S. to Africa, the Caribbean, Europe, and Asia is one of Canada’s greatest economic opportunities.”
Newcomers often pay more for that access to capital: conventional small business loans in Canada typically run prime plus two to five per cent on top of the current 4.45 per cent prime rate, while alternative lenders like Windmill Microlending and FACE — built specifically for newcomers banks deem too high-risk — offer below-prime rates near 5.95 per cent instead.
Financial Survival
These cross-border tariff threats arrive at a time when small business confidence across Canada has dropped to a three-year low of 49 per cent, according to the 5th Annual Zensurance Small Business Confidence Index released on Aug. 12. Zensurance is a small business insurance provider.
The national survey of 1,000 business owners and self-employed entrepreneurs shows a pretty stark reality: 47 per cent have seriously considered closing permanently this year because of relentless inflation and rising operational costs. About 38 per cent of business owners in Ontario say they have used personal credit cards or home equity just to keep their day-to-day operations going — a financial tightrope that, experts say, is especially dangerous for newcomer entrepreneurs who don’t have established commercial credit lines or institutional backing.
The operational strain extends into the logistics and transportation sector, where newcomer entrepreneurs play a pivotal role in keeping cross-border commerce moving. Ahmed Abdalrahim, director of Synergy Logistics Canada, pointed out that newcomer-owned logistics companies and independent owner-operators lack the financial reserves of industry giants to absorb sudden cost spikes.
“Smaller logistics companies are taking a cautious approach — renegotiating contracts and advising clients to push shipments through before tariffs take effect,” Abdalrahim explained. “Newcomer-owned SMEs and independent owner-operators are among the most exposed. Many operate on thin profit margins and limited working capital.”
Abdalrahim added that tight cash-flow cycles make cross-border disputes precarious. for newcomers. “With rising fuel prices, insurance premiums and maintenance costs, some are operating with no profit at all. When clients demand fixed transportation rates while costs surge, cash flow becomes a critical crisis.”
These tariff pressures will hit hard in practice, forcing local newcomer business owners to completely overhaul how they run their businesses. Elaine Acheampong, founder of the Toronto-based cosmetics brand SHAIGLO, described how rising cross-border prices forced her to make an immediate operational pivot.
“Some of the premium oils and extracts we use are sourced from the U.S.” Acheampong shared. “With tariff increases, exchange rate fluctuations and rising shipping cost, our finished products have become more expensive to produce. Meanwhile, U.S. clients facing custom duties are asking for price reductions that simply aren’t feasible.”
Rather than scaling back, Acheampong adapted her strategy to focus on local markets. “It has forced me to intensify marketing locally within Canada and innovate by sourcing Canadian-made alternative ingredients that maintain our quality without the cross-border markup.”
Structural Barriers
Dan Kelly, President of the Canadian Federation of Independent Business (CFIB), emphasized that small firms face severe structural barriers when attempting to adapt to sudden policy shifts.”For many small firms, diversifying into new export markets isn’t easy. High shipping costs, border delays, complex regulations and custom procedures make it difficult to pivot.”
From an academic perspective, trade volatility ends up creating broader market instability. Prof. Luis Seco, who advises the Mathematical Finance Program at the University of Toronto and researches at the Fields Institute, pointed out that the uncertainty itself does real economic damage.
“Tariffs introduce uncertainty, and markets and businesses don’t like it,” Prof. Seco told NCM. “Current tariffs reflect a situation of trade war, not just economics, so the destruction that will follow is much bigger than the economic pain created.”
However, headded that market shifts can also open unexpected windows for entrepreneurs. “Trade disruptions can create opportunities for entrepreneurs. Smart entrepreneurs who understand supply chains can identify new local or international opportunities that arise when foreign competitors become less competitive.”
Small business advocates are calling for targeted structural relief. The CFIB is urging federal policymakers to lower the small business tax rate from 9 per cent to 6 per cent, reduce administrative red tape, and eliminate internal provincial trade barriers.
At the same time, organizations like the CBCC are working to connect newcomer and diverse entrepreneurs with regional development agencies — such as FedDev Ontario, PrairiesCan, and the Atlantic Canada Opportunities Agency (ACOA), – and dedicated federal programs like the Black Entrepreneurship Program (BEP) so they can secure the capital they need.
The Ministry of Labour, Immigration, Training and Skills Development was contacted for comment regarding potential provincial workforce impacts and newcomer business support strategies, but did not respond prior to publication.
For Canada’s newcomer business community, this period of trade tension brings both a clear vulnerability and a real strength. While they depend heavily on stable cross-border trade, their ability to adapt fast and tap into global markets could end up being what helps them stay resilient in the long run.
Shawgi Mustafa
Shawgi Mustafa is a Toronto-based journalist and energy analyst with over 10 years of experience covering energy markets, human rights, politics and migration. He has worked for numerous prominent media organizations across the Middle East. His work focuses on the intersection of global politics, human rights and energy economics. X: @shawgi
