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How global trade is impacting local employers
Editorial by Christian Saint Cyr
National Director / Canadian Job Development Network
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Last week, Statistics Canada released the February Labour Force Survey and according to a headline published by CTV, "Canada’s job loss a ‘bloodbath’." All hyperbole aside, economists were expecting the country to create 10,000 new jobs and instead we lost 84,000 jobs. This was one of the worst single month job losses in decades if we don't count the pandemic.
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Employment numbers like these might prompt astute job developers like yourself to wonder how employers are approaching hiring, if not the economy itself.
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We've been on the cusp of recession for a couple of years now and it got so much worse last year as the new administration in the United States began implementing and talking about implementing a variety of new tariffs.
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I read about this all the time and even from my standpoint, it's hard to keep track of what's been implemented and what potentially been implemented and how all of this impacts Canada's economy.
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According to the numbers, we've definitely felt the impact. In the past year, we've seen a steady erosion of jobs in the manufacturing sector, losing 60,000 jobs in just the past twelve months.
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Adding to the problems, we have have the U.S. / Israel war with Iran which has significantly increased the price of oil and other types of energy.
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In preparing this, I looked up how much oil travels through the Strait of Hormuz, which coincidentally was one of the most common Google searches last week, and it turns out approximately 20% of the world's total liquid petroleum—roughly 20 million barrels per day passes through the Strait of Hormuz, making it the world's most critical oil chokepoint.
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But that's okay, oil and gas is only used to transport -- well, everything.
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So, we have rising gas prices, uncertain trade, a global conflict and we're getting ready to renegotiate a trade agreement with the United States and Mexico that could potentially unravel every element in our economy.
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How does all of this impact our local employers? Many of us are not likely working with international manufacturers, importers, exporters, steel producers and oil companies. Does this have an impact on the restaurant down the block, the big box retailer, the small I.T. company or the independent trucking company?
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The challenge is that even the smallest companies need supply inputs which might be materials delivered in a container but could also include napkins, dishes, toner or even office supplies. Everything is getting more expensive for employers.
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Employers can withstand two to three per cent cost increases but a flat 25 or 35 per cent tariff increase is massive.
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And while inflated costs are a major consideration, the biggest factor impacting local employers is uncertainty. Employers are reluctant to hire, expand the operations or try new things. The approach by nearly everyone in the world to the U.S. administration has been to keep your head down and hope it ends soon.
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As such employers are slow to hire, slow to fire. That's a difficult environment where our projections for the next ten years call for 35 per cent of jobs to be created through economic expansion.
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In our employer engagement roles, it's critical to understand how employers think and the decisions they're making. I always turn to the Canadian Federation of Independent Business for these insights and recently they released a study titled, 'A Divided Year: Small Business Performance in 2025 Under the U.S.-Canada Trade War'.
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The study notes that "small businesses entered 2025 already under strain from persistently high costs and slowing business dynamism."
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It reveals that at the close of 2025, businesses really fell into two categories; those who reported a good year and those reporting a bad year, with very little in between.
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Factoring in those reporting both a good and very-good year, were 37 per cent of employers. Another 35 per cent of employers noted they had a poor or very-poor year.
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Contrary to the myth that only large companies are being impacted by trade, only 35 per cent of firms with 0–4 employees reported a good year versus 42 per cent of those with 50–99 employees, reflecting the tighter margins and limited buffers that make smaller businesses more vulnerable to rising costs and sudden disruptions.
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When they examined why small businesses had experienced a poor year, 67 per cent noted reduced profits; 63 per cent said higher expenses; and 65 per cent identified reduced revenue.
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A much larger portion of businesses who experienced a poor year, versus a good year, noted increased debt as a major factor.
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When they looked at businesses that had experienced a good year, many of the same factors came into play, just to a lesser degree. Forty-four percent of these businesses were still having a difficult time with higher expenses; 26 per cent with reduced profits; and 16 per cent with reduced revenue.
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The distinguishing factor for businesses that had reported a good year was that 33 per cent were struggling with supply-chain issues.
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These are difficult times and many employers are looking for someone or something to blame. I was listening to the radio recently and one employer commented that the cost and regulations of new employees are too expensive so instead of hiring people, he was just going to call them all contractors and relieve himself of the regulatory burdens and costs.
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That certainly creates a multitude of challenges, not the least of which is the violation of employment standards, but it speaks to the frustration many employers are struggling with.
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When asked for approaches the federal government should adopt, CFIB respondents provided five suggestions:
- Actively work with the U.S. to reduce trade uncertainty (69%)
- Continue to reduce internal trade barriers (61%)
- Provide broad-based tax relief for business (54%)
- Reduce regulatory burden and red tape (53%)
- Expand trade opportunities beyond the U.S. market (48%)
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They also asked businesses what the federal government can do to make their circumstances easier during these tariffs. Suggestions included:
- Provide broad tax relief measures, such as a reduction in the small business tax rate and/or the Employment Insurance (EI) premiums for small businesses.
- Prioritize CUSMA negotiations to restore stability, reduce trade uncertainty, and protect the cross‑border supply chains small businesses rely on.
- Ensure counter‑tariff revenues are redistributed to affected small businesses through a straightforward and accessible reimbursement process.
- Remove interprovincial trade barriers, so Canadian businesses can more easily diversify their operations across Canada.
- Reduce regulatory burden by implementing a “2 for 1” rule where 2 rules are eliminated for every new one introduced and making regulatory modernization a priority.
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Tariff uncertainty, global conflict, inflation and economic uncertainty aren't just bullet points that come up in our news feeds. They are factors that are forever changing our economy and also our labour market.
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This is the reason we've launched our summer labour market series as Canada Strong; 16 ways the trade is changing our labour market. We're inviting in dozens of speakers from nearly every province to provide insights into what governments, business, educators and communities are doing to make our local labour market less reliant on U.S. trade and more Canada focused. The tariffs may end but were all ready seeing government priorities, industries and trade with other nations shifting in ways that will last for decades.
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We've organized our summer conference series into five separate conferences with Alberta on May 28th/29th; British Columbia on June 4th/5th; the Canadian Prairies on June 11th/12th; Ontario on June 18th/19th; and Atlantic Canada on June 25th/26th.
Everyone who registers for one of the conferences before March 31st will benefit from a 50% discount on registration. If you would like more information, just visit the Canadian Job Development Network website at: jobdevelopment.org.
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As we move forward, what is the messaging to share with employers. I believe first and foremost that we need to empathize with their situation. A study such as this one from CFIB does a lot to help us develop a dialogue with employers.
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We also need to frame our discussions in financial benefits. We certainly want to promote traditional benefits such as wage subsidy, training, working gear and workplace modifications for hiring those with disabilities.
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I believe we should also have an economic message for hiring our clients. The economic benefits may include less turnover, a more reliable employee, employees that stay longer or ones that are more loyal. We should also highlight transferable skills such as better language capability, a stronger attachment to the community, or transferable international education.
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By framing our job development activities in economic messaging we're not only making the best case for our clients or students, we're also empathizing with the employer's challenges and building relationships.
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We’ll be discussing the challenges confronting small businesses at our #MotivatingMondays meeting of the Canadian Job Development Network, Monday March 16th at 8:30am Pacific; 9:30am Mountain; 10:30am Central; 11:30am Eastern; 12:30pm Atlantic and at 1pm in Newfoundland.
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On the morning of Monday March 16th 'Click this Link' to join the session.
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