But rising costs and weak demand force entrepreneurs into sacrifices
Rising expenses, weaker spending, and ongoing tariff challenges continue to batter small firms, leaving many owners struggling to stay afloat without adequate outside support.
As Small Business Month begins, a new survey highlights a willingness among consumers to shop locally but also the stark reality that these efforts have not fully translated into relief for entrepreneurs.
More than half of respondents reported deliberately purchasing more from domestic businesses in the past year, frequently spurred by US tariffs, but 57% of entrepreneurs surveyed said the “Buy Canadian” momentum hasn’t significantly boosted their bottom lines.
The 2025 Canadian Small Business Resilience Report from Merchant Growth draws on an Angus Reid consumer poll of over 1,500 Canadians and a survey of 131 small business clients. It reveals that government assistance remains a major sticking point.
Nearly three-quarters of surveyed business owners said they feel abandoned by policymakers, forcing many to shoulder additional costs themselves with 87% admitting to making personal sacrifices, ranging from slashing their own pay to selling off assets or delaying major life plans.
“Small businesses are the backbone of the Canadian economy. They’re fighting through inflation, tariffs, and slower spending, all while making personal sacrifices most people never see. We need to stop treating them as if they’re on their own, because their resilience is what keeps our communities and economy moving forward,” said David Gens, founder and CEO of Merchant Growth.
Consumer motivations remain strong, with 76% of consumer respondents saying they want to buy local to strengthen the economy, 66% citing the protection of Canadian jobs, and 56% pointing to U.S. tariffs as a motivator.
But costs stand in the way with more than half saying higher prices limited their ability to buy small, followed by limited product availability (35%) and fewer store locations (26%).
For entrepreneurs, inflation remains the most punishing factor with 74% stating that rising input costs hampered operations in 2025, half pointing to soft demand, and 38% to insufficient government support. In comparison to last year, 42% said performance had worsened, while fewer than a third reported improvement.
Tariff effects were split evenly between US measures (21%) and Canadian counter-tariffs (20%). The consequences include higher input costs (56.5%), weaker demand (27.5%), falling revenues (23%), disrupted supply chains (21%), and in some cases, cancelled contracts (12%).
Despite the strain, entrepreneurs’ capacity to adapt remains evident with 55% saying they are stronger today than at the beginning of the year, underscoring that resilience continues to define Canada’s small business landscape, even as the costs of survival grow steeper.
