SMEs facing uncertain times as potential US tariffs loom: Corporate Traveller Canada survey
Small and medium-sized enterprises (SMEs) – which make up 98% of all businesses and almost 90% of the private workforce in Canada — are facing uncertainty as potential US tariffs loom.
And according to a new survey by Corporate Traveller Canada – conducted by YouGov – 85% of small and medium-sized enterprises (SMEs) would reduce cross-border travel for business if tariff or trade restrictions are imposed.*
This move could have widespread implications for Canada’s economy, disrupting business relationships, supply chains, and the broader tourism and hospitality industries.
On the other hand, not all SMEs are aligned, showing the divided nature of the current economic climate.
Key insights from the Corporate Traveller Canada survey found:
Divided Opinions
Nearly half (48%) of Canadian SME workers believe US-Canada trade tensions will cause significant or some disruptions to business operations over the next 12 months, while 47% expect minimal or no impact.
Among Canadian SMEs with US operations or clients, 44% report increasing cross-border travel due to trade policy uncertainty, while 40% have reduced such travel.
Shifting Travel Patterns
85% of SMEs anticipate reducing cross-border travel to the US, including 59% expecting significant or moderate disruptions.
77% of SMEs are exploring alternative international markets, with this shift being more pronounced among small businesses (80%) than medium enterprises (73%).
Tariff Concerns
65% of Canadian SME workers are concerned about the potential impact of US tariffs or restrictions, including 22% who are very concerned.
Chris Lynes, Managing Director of Flight Centre Travel Group, including global travel management company, Corporate Traveller, observed that: “The conversations around potential US tariffs and trade restrictions often focus on rising costs, but their impact on business relationships and cross-border travel is just as critical.”
Lynes continued: “Our survey shows Canadian SMEs are not only cutting back on US travel but also exploring new markets. While these shifts could reshape the landscape of North American business short term, the Canada-US partnership remains strong and will endure.”
Signalling a potential realignment of business strategies, 77% of SMEs surveyed said they are considering increasing their corporate travel to alternative international markets.
Said Lynes: “As Canada’s businesses anticipate disruptions, many are already preparing by pivoting to global opportunities outside the US. This is not just a response to tariffs; it’s an opportunity for growth and diversification.”
Still, the ripple effects are concerning.
Reduced business travel to the US could significantly impact North American airlines, domestic and cross-border hospitality industries, and tourism services, as SMEs account for a substantial portion of these bookings.
Proper planning and robust travel management strategies will be critical for businesses responding to these shifts.
Go to www.corptraveller.com for more.
* A variety of sources have reported that following his inauguration, President Trump indicated that tariffs on Canada and Mexico could be imposed as soon as Feb. 1, 2025.
