Key insights from MNP’s Tariffs, Taxes, and More Trends in 2025 webinar
Key insights from MNP’s Tariffs, Taxes, and More Trends in 2025 webinar
Canada’s political and economic landscapes are in the spotlight this year with a new Prime Minister, new rules of engagement with our U.S. trading partners, and many open questions about what to expect in the months ahead.
Our latest Business Owner Series Webinar explored some of the most critical questions facing businesses in 2025, including:
- Previous budget measures: How will the next government address proposed capital gains measures, carbon tax rebates, and changes to the SR&ED tax credit?
- Political scan: Who is likely to form the next government, what do voters care about, and what will their mandate be?
- Tariffs and trade uncertainty: How do tariffs work, what will their impact be on Canadian importers and exporters, and how can businesses offset the impacts of increased costs and lower demand?
Between tariff threats and a looming change in Canadian federal leadership, 2025 is a year of uncertainty for Canadian businesses. On February 11, 2025, MNP hosted a webinar to discuss the evolving economic landscape, providing clarity about what’s ahead and actionable insights for how business leaders can assess tariff impacts.
The session, moderated by Am Lidder, Senior Vice President for Tax Services at MNP, featured insights from MNP’s Heather Weber, Indirect Tax Leader and Mike Cristea, Trade Advisory Specialist, and Crestview Strategy’s Ginny Roth.
Canadian tax updates
The capital gains deferral is one of several outstanding tax issues taking centre stage with Liberal leadership hopefuls and the Conservative opposition. Am provided an update on the recent deferral of the capital gains inclusion rate adjustment originally announced in April 2024.
She also highlighted ongoing questions regarding the taxability of the Canadian carbon rebate for small businesses — with conflicting messages from the Canada Revenue Agency (CRA) and the Department of Finance — and proposed changes to the Scientific Research & Experimental Development tax credit, which have yet to be enacted.
Assessing the political landscape and business impacts
"The last few months, even before the Trump tariffs, have seen significant political changes in Canada," said Ginny Roth, a partner at Crestview Strategy, who specializes in translating the dynamic political landscape into clear advice for business leaders.
Ginny offered a comprehensive political scan, emphasizing the increasing relevance of politics in business decisions. She discussed the rise of nationalism and economic challenges, noting that "incumbents around the globe have not been able to survive in an inflationary economic environment."
Ginny also touched on the potential for a shift in Canadian political dynamics, with the Conservatives gaining traction. "If there were an election today, the Conservatives would not only form government but form a majority government," she said.
She emphasized the importance of understanding these political shifts and their potentially significant implications for businesses. "Even if the Liberals manage to stay in power, they are likely to walk back on key initiatives due to public frustration with the cost of living and low economic growth," Ginny said.
An in-depth look at tariffs
Heather Weber and Mike Cristea delved into the implications of tariffs on businesses.
Heather explained the basics of tariffs, describing them as "a tax imposed by a government on goods entering their territory." She emphasized the importance of understanding where tariffs apply and who bears the cost.
"Tariffs can significantly impact prices and the overall economy," Heather noted.
Mike highlighted the need for businesses to conduct trade chain reviews to assess their exposure to tariffs. "Trade chain reviews are a proactive exercise to analyze goods, suppliers, and buyers to mitigate risks," he said.
He emphasized the value of understanding your entire supply chain, explaining that it can help you prepare for potential changes and adjust operations as needed.
What can business leaders do about tariffs?
The panel provided several strategic recommendations for businesses to navigate the uncertain landscape:
- Review the volume and dollar value of imports and exports: To understand exposure to tariff risk, business leaders should start by identifying the role that trade plays in their business. This information provides a foundation for decision-making.
- Diversification: Businesses should diversify their suppliers and markets to reduce dependency on any single source or market. "Exploring new markets and staying informed about trade policies is crucial," Mike said.
- Scenario planning: Engaging in scenario planning can help companies better manage risks associated with tariffs and other economic changes. "It's about being prepared and having strategies in place to pivot if needed," Heather added.
Tariff Risk Exposure Assessment
Get a better understanding of your potential risk exposure to tariffs — and how significant that risk may be. Our nine-question assessment identifies your business risk level and provides insights into what you can to do remain resilient.
Taking a broad view of your business
Heather emphasized the importance of adopting a comprehensive approach when assessing the impact of tariffs and other economic changes on your business.
"It's crucial to look at all aspects of your business together," Heather said, highlighting that no single change can be made in isolation without considering its broader implications. For example, supply chain changes could have impacts on a company’s Bill S-211 reporting requirements.
Financial planning and inventory management are also critical components of this approach. Heather advised businesses to have strategies in place to mitigate the impact of losing access to key markets and to ensure they have the necessary materials to continue operations without disruption.
"If you lose access to a particular market, you need to have financial strategies in place to mitigate the impact," she explained.
Workforce planning is equally important, as businesses need to plan for potential layoffs and ensure they have the right talent to navigate changes. Heather encouraged businesses to view these challenges as opportunities to build resilience.
"This is an opportunity to make your business more resilient and to manage risks more effectively," she said. By taking a comprehensive view of their operations, businesses can better prepare for and adapt to the evolving economic landscape.
Will Canada address interprovincial trade barriers?
Canadian political leaders have renewed the discussion about the longstanding issue of interprovincial trade barriers, giving some business leaders hope for progress in this area.
Ginny sees a low likelihood of change, given the challenges posed by special interests and political inertia. "It's going to take political courage and a step-by-step approach to make meaningful progress," she said.
E-commerce and de minimis rule
The potential changes to the de minimis rule, which allows goods under $800 to enter the U.S. duty-free, were a significant concern for e-commerce businesses. Mike explained that if this exemption is removed, it could lead to "a significant cost increase in all e-commerce streams," ultimately affecting consumer prices.
Ginny added that the de minimis rule "represents the heart of the question for Trump," balancing the need to push back against Chinese goods with the practical implications for American consumers. "It's a complex issue that requires careful consideration and negotiation," she said.
More uncertainty ahead
The town hall concluded with a call for businesses to stay informed, be proactive, and leverage available resources to navigate the evolving landscape of tariffs, taxes, and trade in 2025. "Our objective was to provide one or two takeaways that you can implement in your business," Am said, encouraging attendees to prepare for potential changes and pivot as needed.
The session provided valuable insights and strategic advice, helping businesses understand and navigate the complex economic environment of 2025.
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