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Trade War Worries Already Struggling Entrepreneurs

April 14, 2025

News

The escalating trade war between Canada, the United States and the rest of the world continues to wreak havoc on many small businesses – including budding entrepreneurs.

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For Anahita Rezaee, the owner of Calgary-based Magnolia Cakery, it’s yet another hurdle on her journey to sweet success.

The newcomer from Iran is an engineer by trade but has always wanted to create personalized custom cakes and deserts.

After arriving in Canada and taking a number of courses, including the TIES (The Immigrant Education Society) Entrepreneurship Program, she decided to follow her childhood dream.

“I’ve always had a lifelong love for art and design,” she says. “To bring imagination, personality, and style to life.”

But now, instead of spending her time creating, she’s spending it trying to find affordable ingredients that won’t eat into any small profit she makes.

“A lot of our key ingredients come from or through the US, so when the tariffs increase — our cost increase as well,” she points out.

The cost of getting speciality items, including high-quality and gluten-free chocolates, vanilla and other extracts, and wafer papers have substantially increased — to double the price in some cases.

Rezaee says she would love to be able to get her products locally, and has been researching various sources, but adds she simply doesn’t have a reliable supplier as of yet.

Leaving her with some difficult choices.

“We decided not to pass on all the costs to our customers, but when ingredients and supplies gets more expensive, we need make a small adjustment,” she adds.

“We didn't increase our prices yet, but I think we have to increase.”

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It’s an unwelcome possibility for Gabriela Quiroz as well.

The newcomer from Mexico, who’s a scientist and dietician, has a real passion for the planet.

That’s why she started Purple Tree 1981, a Calgary-based beauty company creating quality, personal hygiene products focused on being environmentally safe.

“I started to to worry about everything that’s an impact to to our world,” she says. “So, when I looked into pollution, the use of plastics, and every substance that pollutes the waters — I wanted to help.”

Like many small businesses, especially immigrant-owned ones, she’s encountered numerous struggles.

The graduate of the TIES Entrepreneurship Program has had to go up against big, well-known companies with established brands.

Now, she has to go up against rising tariffs.

“So, olive oil is going up and essential oils have gone up.  I use some some brands that are coming from from the US, and I cannot support that price anymore,” she points out.

She too has been experimenting with more local ingredients. She says she’s been successful in some cases but adds some items simply aren’t available.

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Quiroz points out while she’s willing to compromise, she won’t compromise on quality or the environment.

“This is my way to contribute something to the people, and also to my family and my son. I want to leave him a good place, where he can live.”‍

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Small Business Optimism Plummets

According to the CFIB (Canadian Federation of Independent Business) small business optimism is at its lowest level ever recorded in Canada.

Bradlee Whidden, Senior Policy Analyst, Western Canada says optimism is lower than it was during the pandemic, the 2018-19 financial crisis and 9/11.

Whidden says with all of these events, there was some hope that eventually the turmoil would end. This time, he says, it’s more complicated.

“With an increase in uncertainty, not only does that negatively affect operating small businesses, but it can also dissuade potential small business owners or entrepreneurs from starting small businesses at all,” he adds.

“If they're unsure that they're going to be able to source products from the US and if there isn’t a viable alternative in Canada — which often there isn't — that could deter them from starting a business at all. This would be unfortunate.”

The CFIB encourages small business owners and entrepreneurs to investigate all resources available to them as the trade war continues.

It also encourages consumers to shop and support local.

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