Automobile industry: Canadian SMEs already shaken by prices

The Canadian Federation of Independent Company (FCEI) published a report based on 187 small businesses in the automotive sector on Wednesday, ranging from parts to repair workshops, and found that customs duties have already repercussions.

Their income decreased by 13 % on average, and half of them said they have suspended or canceled investments due to the uncertainty caused by the trade war between Canada and the United States, which could cause loss of income of several billion dollars or missed investments, according to the report.

It is impossible for a business owner to really know what is happening todaysaid Joseph Falzata, co -author of the report and policies analyst at the FCEI in Ontario, about the impact of news on trade policies.

I do this full -time, and it’s always difficult for me. We can therefore imagine an entrepreneur who works 50 to 60 hours per week and who tries to follow.

Their income is partly affected by the rise in prices and confusion as to the products affected by customs duties, as well as by costs related to the search for new supply chains, said Falzata.

Ontario has programs intended to support companies in the automotive sector, but although appreciated, they are not up to it when it comes to supporting small businesses, maintains the report of the FCEI.

In its spring budget, the provincial government announced the investment of $ 85 million in two programs: the modernization program for the Ontario automotive sector, to help parts suppliers to modernize their equipment, and the Ontario of innovation for vehicles, for research and development.

Although these programs have been created with good intentions, few small businesses plan to use it, and more than a third of them are not eligibleindicates the report of the FCEI.

These programs focus on research and development innovation and manufacturing on a large scale, without taking into account that most (small and medium -sized enterprises) in the automotive sector cannot afford these processes or do not participate.

The new fund Ontario, together for tradeendowed with $ 50 million and intended to help companies develop new markets and find national supply chains, requires that companies demonstrate a loss of income of at least 30 % and that they invest $ 200,000 in their own capital, which the report describes as luxury that most (small and medium -sized enterprises) cannot afford.

The government has said that its programs have already helped hundreds of businesses: the Ontarian innovation network for vehicles has supported more than 600 small and medium -sized businesses since its creation in 2019, and the modernization program for the Ontario automotive sector has supported 215 projects since 2021.

Faced with unprecedented global uncertainty, our government protects and strengthens the progress we have made to support small businesses in the automotive sector and the entire economywrote Jennifer Cunliffe, spokesperson for the Minister of Economic Development of Ontario, Vic Fedeli, in a statement.

According to the FCEIthe best way to help small businesses would be to reduce their tax rate by 3.2 % to 2 %. The government lowered this rate, which was 3.5 % in 2020.