Ontario’s small business owners are bracing for a difficult 2026, facing a perfect storm of strikes, tariffs, and skyrocketing operational costs that many say could push them over the edge.
For months, rising utility bills, stubborn lease rates, and U.S. trade tariffs have chipped away at already thin profit margins. Now, with a rotating Canada Post strike disrupting shipping and consumers tightening their belts, many entrepreneurs are questioning how much longer they can hold on.
“It boils down to the never-ending operational costs,” says Joe Cote, Chief Growth Officer at Merchant Growth. “Even though interest rates are finally going down, nothing has changed for utility bills or leases. Small businesses are constantly staring down the barrel of yet another price increase.”
Promises Made, Relief Missing
Both the federal and provincial governments have introduced programs meant to help businesses weather economic turbulence, including targeted financing for steel and aluminum manufacturers. But according to Merchant Growth’s data, many small businesses say the promised relief has never truly reached them.
The 2025 Canadian Small Business Resilience Report paints a sobering picture:
- 72% of surveyed Ontario businesses say they feel abandoned by financial relief programs.
- More than half say their performance worsened this year.
- Many are unsure if they will survive to see 2026.
Tariffs have raised the cost of goods for 60% of businesses, while 35% report weaker consumer demand, and 14% face both supply chain disruptions and cancelled orders.
The Strike That’s Squeezing the Margins
The Canada Post strike — now in a rotating phase — has become another blow. Michelle Auger, a senior policy analyst with the Canadian Federation of Independent Businesses (CFIB), says the disruptions are driving small businesses away from Canada Post permanently.
“Small businesses are one of Canada Post’s last profitable customer groups,” Auger explains. “Every time there’s a disruption, more of them leave. Since the last strike, 13% of Canadian businesses have stopped using the service altogether.”
Personal Sacrifices Behind the Numbers
Behind the statistics are real people making hard choices. Fourteen per cent of small business owners have taken on second jobs to stay afloat. Over 80% have cut their own income, delayed retirement, or made personal sacrifices to keep their staff employed.
For Elizabeth Mywaart, CEO of Pendennis Weddings & Events, the impact is painfully clear. “The majority of Gen Z customers are saying they just can’t afford to support Canadian businesses. That’s our future. If they can’t afford it now, what odds are there that they will be able to in the future?”
Consumer surveys reflect this strain: while 99% of Ontarians say they prefer to support local businesses, more than half cite higher prices as a barrier, and others point to limited selection or lack of clarity on whether products are Canadian.
Running Out of Time
Both Cote and Auger agree that without immediate, concrete government relief, many Ontario businesses won’t make it through the next year. “As of now, there is no help on the horizon for the next 12 to 18 months,” says Cote. “It begs the question: how long can they sustain this?”
Auger is currently drafting recommendations for the upcoming federal budget aimed at easing the pressure on small business owners. But for many, time is running out.
“Anything tangible from any level of government — something that says ‘here’s what we’re doing for you’ — would help immensely,” Cote says. “Without that, the road ahead doesn’t look very optimistic.”