As Canada and the U.S. continue to trade tariff blows and experts warn of rising consumer costs on both sides of the border, some Ontario businesses say they’re refusing to pass added costs onto consumers — at least for now.
Chapman’s Ice Cream, one of Canada’s largest independent ice cream makers dating back to 1973, admit that they been forced to cut ties with some American suppliers and are actively seeking international alternatives for ingredients not available in Canada.
Despite rising costs, in a post to Facebook, the company assures customers they will “absorb all immediate increases” for the rest of the year.
In Burlington, Precision Record Pressing, one of North America’s largest vinyl pressing plants, has taken a similar stance. CEO Shawn Johnson revealed that he will not be adding “additional charges, price increases, or hidden fees.”
What experts think
Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), suggests that businesses attempting to absorb tariff costs are in the minority.
“It’s just too big a hit to be able to absorb for most businesses,” Kelly said.
“I think the first strategy for many will be to eat the costs for a little bit, and then after that, if these tariffs are in place for a while, I suspect they will be passed on, in all or in part, to end consumers.”
Kelly also adds that the CFIB recently surveyed small businesses on how they plan to handle the tariffs. He notes, only two in ten said they believe they can pass all of the costs onto customers, while one in ten said they expect to absorb the entire impact themselves.
Notably, the biggest burden on businesses may not come from U.S. tariffs Kelly warns, adding that the impact from Canada’s retaliatory measures may be much more significant.
Already, at least one Toronto brewery has warned that it anticipates having to increased its prices by an average of 10 cents per can of beer due to the 25 per cent retaliatory tariff on aluminum that went into effect earlier this week, following a similar move by U.S. President Donald Trump.
“If we’re going to match dollar for dollar, then that’s going to mean the majority of goods we bring in from the U.S. will be subject to tariffs,” Kelly said. “And there’s no way that Canadian small businesses are going to be able to displace every U.S. product. In some sectors, U.S. suppliers are the only game in town.”
‘We just don’t feel it’s right to profit'
While a few businesses choose to absorb tariff costs outright, Soccer World Central, based in Oakville and London tells CTV News Toronto, they are taking a different approach.
“We just don’t feel it’s right to profit off of a terrible, terrible act,” Owner and CEO Chrys Chrysanthou said. “We’re doing whatever we can to keep costs as low as possible.”
The company shares that they will not increase its markup on products affected by tariffs. Instead, Chrysanthou, who is also a CPA with 30 years of experience, says they’ll maintain pre-tariff margins to ensure customers don’t face additional burdens beyond the tariffs itself.
“At this point, Soccer World is not absorbing the cost of the tariffs. As a reseller, we do not have the luxury of high enough margins to absorb the cost of tariffs, but we are working with our suppliers to see if there are ways to further minimize the burden, they wrote in a statement”
Chrysanthou explains that under a typical retail model, a product that originally sold for $20 could rise to $25 after tariffs, even though with 25 per cent tariffs, the added tariff cost is only $2.50. He guarantees customers won’t see a hike in price beyond $22.50.
How long can businesses hold the line?
Despite efforts by companies like Chapman’s, Precision Record Pressing, and Soccer World to ease the burden on consumers, Kelly warns that while customers won’t see an immediate impact it could be troublesome down the line.
He suggests price hikes could be inevitable if both countries fail to come to an agreement in the near future.
Advising businesses, Kelly says, to “try to make sure you keep your customers (are) in the loop… don’t try to surprise them with price hikes.”
