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Business owners grapple with tariff mitigation efforts, including layoffs

Visibility360, PDF version to share

By Kate McCaffery | March 6, 2025, 3:37 p.m.

Photo: Adobe Stock

The affairs of your business owner clients are likely to need some review, as many undertake a strategic review of their own business operations in the wake of recent tariff announcements.

A small survey of 602 business leaders conducted by KPMG LLP, found that three quarters are already undertaking a strategic review of operations, half are laying off employees now and 28 per cent say they will lay off employees within four to six months. By this time next year, half say they expect their headcounts to decrease.

Steadfastly united

“Canadian business leaders remain steadfastly united in fighting U.S. tariffs with two thirds, 67 per cent, saying they can weather a trade war that lasts more than a year,” KPMG states in its announcement about the survey’s results. They add that 86 per cent say they continue to support retaliatory tariffs against the U.S., a number that is unchanged since the survey was conducted a month earlier. The sentiment was consistent across the country, echoed by 89 per cent of Ontario respondents, 85 per cent of Quebec respondents, 80 per cent of respondents in British Columbia and 83 per cent of respondents in Alberta.

Mitigation strategies

“While it varies by company and industry, mitigation strategies include identifying areas to optimize and streamline operations, forming partnerships to open up new markets, diversifying supply chains, divesting non-core activities, exploring foreign exchange hedging opportunities, incorporating tariff and transfer pricing plans, seeking exemptions and securing subsidies or taking advantage of tax incentives,” they add. Among respondents, 77 per cent also say they will identify potential acquisition or divestiture opportunities as part of their mitigation strategy.

Interprovincial trade barriers

Notably the survey found a large number of respondents expect governments to take action to eliminate interprovincial trade barriers – 84 per cent said this move will be extremely or very important to the survival of their businesses and want the barriers removed as quickly as possible.

Going forward, between 11 per cent and 25 per cent of sales are expected to be redirected to Canada – this according to just 31 per cent of businesses who said this was possible.