Survey by Ignite Digital Says Canadian Small Businesses Feel Squeezed by Costs, Tariffs and Weak Buy Canadian Follow-Through

Canadian small businesses say they are under growing pressure from rising costs, tight cash flow, tariff uncertainty and softer customer demand, according to a new survey by Ignite Digital. The findings matter in Thunder Bay and Northwestern Ontario, where many independent businesses already face higher freight costs, long supply chains and added vulnerability to swings in cross-border trade and consumer spending.

The survey of 600 Canadian small-business owners suggests that while public support for “Buy Canadian” remains strong in principle, many owners believe shoppers still turn to cheaper American options when money gets tight. For local businesses in Thunder Bay, that concern will sound familiar as operators balance patriotism, pricing pressure and the day-to-day realities of keeping the doors open.

Buy Canadian support may be softer than it sounds, survey suggests

According to the survey by Ignite Digital, 79.4 per cent of small-business owners nationally said Canadians are at least somewhat “Faketriotic” — using the survey’s term — by publicly backing Buy Canadian efforts while privately purchasing from American companies to save money. Responses broke down to 30.3 per cent saying “yes,” 34.3 per cent “kinda” and 14.8 per cent “maybe.”

Ontario stood out in the provincial breakdown. Among Ontario respondents, 31.8 per cent identified this pattern outright, and 60.8 per cent of small-business owners nationally named Ontario as the most “Faketriotic” province in Canada, again using the survey’s language. The release did not include full methodology details beyond the sample size of 600 owners, so the results should be read as a snapshot of business sentiment rather than a definitive measure of consumer behaviour.

The survey also found many owners believe this gap between rhetoric and spending is costing them money. Nationally, 12 per cent said it was costing their business “too much,” 9.8 per cent said “a lot,” and 57.3 per cent said “a little.” In Ontario, 10.6 per cent said it was costing them “too much,” while 12.2 per cent said it was costing them “a lot.”

Rising costs remain the biggest pressure point

The most immediate strain for Canadian small businesses was not consumer patriotism, however. It was cost. In the survey by Ignite Digital, 63.67 per cent of owners said rising expenses such as rent, inputs and shipping were their biggest challenge. Cash flow came next at 38.33 per cent, followed by tariffs related to U.S. actions at 37.67 per cent, taxes and compliance burdens at 31.17 per cent, and falling customer demand at 26.33 per cent.

Those numbers have particular relevance in Northwestern Ontario. Thunder Bay businesses often face added transportation costs compared with firms in larger southern markets, and many retailers and suppliers remain exposed to U.S. pricing, American-made goods and cross-border supply chains. When tariffs or exchange-rate pressures ripple through the system, the impact can be magnified in regions where delivery costs are already high and replacement suppliers are harder to secure.

Finding non-U.S. suppliers is proving expensive

The survey points to another challenge likely familiar to regional businesses: diversifying away from American suppliers is not simple or cheap. Nationally, 60.17 per cent of small-business owners said finding non-U.S. suppliers has cost them significant money this year or has “kinda” cost them significant money.

For Thunder Bay-area operators, that issue is more than theoretical. Many local firms depend on supply routes tied directly or indirectly to U.S. manufacturers and distributors. Replacing those relationships can mean higher prices, longer wait times and more uncertainty — especially for businesses in construction, retail, automotive service, manufacturing and food-related sectors.

Cash flow and customer behaviour are adding to the strain

The survey by Ignite Digital found 43.17 per cent of business owners said late payments were the most damaging customer behaviour they faced. That was followed by unrealistic timelines at 36.83 per cent, abuse or harassment of staff at 32 per cent, chargebacks or disputes at 31.17 per cent, and slow decision-making at 27 per cent.

For small operators, late payments and unpredictable customers can quickly become a survival issue. Unlike larger firms, many local businesses do not have the reserves to absorb weeks of delay while bills, payroll and inventory costs continue to mount. In smaller markets, a handful of bad accounts or a drop in discretionary spending can make a meaningful difference.

Many owners are worried about survival

Some of the starkest findings in the survey dealt with business confidence. Asked how long they could survive if business dropped by 25 per cent tomorrow, 30.17 per cent of owners said three to five months, 21 per cent said six to 11 months, 11.17 per cent said they “can’t even think about it,” and 6.5 per cent said less than one month.

The survey also found 45.84 per cent of owners said they regretted starting or buying their business at least some of the time. On retirement, 73.17 per cent expressed uncertainty or pessimism about whether their business would survive long enough to sell. Those figures point to a broader confidence problem in the small-business sector at a time when inflation, debt costs and consumer caution remain major headwinds.

Ignite Digital founder Matthew Goulart said the goal of the survey was to capture the severity of the pressures small businesses are facing in 2026. In the release, he said Canadian businesses are dealing with “extreme and unforeseen challenges” and need meaningful support before more of them fall behind.

What it means for Thunder Bay and Northwestern Ontario

For Thunder Bay, the survey’s broader message is that local loyalty alone may not be enough to protect small businesses if household budgets remain under strain. Residents may want to support local shops and services, but when essentials cost more and economic uncertainty rises, price often wins.

That leaves an important policy and community question for Northwestern Ontario: how to make local business more resilient in a region where shipping, inventory and distance are constant challenges. That could include stronger local procurement, better promotion of regional suppliers, more flexible financing tools, and efforts to keep consumer dollars circulating within the local economy.

At the street level, the message is simpler. Small businesses do not just need encouragement. They need customers who follow through, clients who pay on time and a business climate that does not punish them for trying to stay Canadian while competing on razor-thin margins. The survey by Ignite Digital suggests many owners are no longer sure they can count on that.