Business confidence in Ontario remains low but steady after the first full year of U.S. tariff impacts, according to the Ontario Chamber of Commerce's 10th annual Ontario Economic Report, released today and shared locally by the Barrie Chamber of Commerce.
The flagship report combines the chamber's annual province-wide Business Confidence Survey with forward-looking economic analysis. It lands at a moment when Simcoe County businesses — from Barrie manufacturers to Bradford-area growers and Collingwood tourism operators — have spent more than a year absorbing the fallout from American trade actions.
Trade deficit narrows on gold exports
The report's release coincided with new federal trade figures. Statistics Canada reported Canada's merchandise trade deficit narrowed to $1.3 billion in December, down from a revised $2.6 billion in November, as export growth outpaced a rise in imports.
Total exports rose 2.6 per cent to $65.6 billion in December, driven largely by an 18 per cent jump in metal and non-metallic mineral products — a category dominated by unwrought gold, silver and platinum group metals. Excluding that group, exports actually edged down 0.2 per cent.
Total imports rose 0.6 per cent to $66.9 billion, with motor vehicles and parts up 5.1 per cent for the month.
For all of 2025, Canada posted a trade deficit of $31.3 billion, the largest since 2020, as exports slipped 0.2 per cent while imports climbed 2.8 per cent. Canada's trade surplus with the United States fell to $81.6 billion for the year, down from $101.3 billion in 2024.
Diversification driving record non-U.S. exports
Exports to countries other than the United States hit a record high in December, up 5.8 per cent for the month, according to analysis from Signal 49 Research, the former Conference Board of Canada. But the analysis noted the gain was driven mainly by gold shipments to the United Kingdom — a trend unlikely to be sustained.
"Canada continues to have some success with gradually recalibrating towards non-U.S. trade partners, as exports to countries other than the U.S. once again reached a record high," Alexandra Brown, North America economist at Capital Economics, wrote in a note reported by Barrie360 and the Canadian Press.
The analysis also pointed to Prime Minister Mark Carney's visit to China last month, which resulted in a rollback of tariffs between the two countries, along with recent agreements with Indonesia and Germany, as evidence Ottawa is pursuing diversification rather than counting on a breakthrough deal with Washington.
Trade pact review in focus
Looking ahead, TD Bank economist Marc Ercolao said the review of the trade agreement between Canada, the United States and Mexico will dominate the coming months.
"While the base case is that the agreement remains in place, scenarios involving U.S. withdrawal could expose Canadian exporters to significantly higher tariffs and prolonged policy uncertainty, weighing on business confidence and investment," Ercolao wrote in a report.
He added that a pending U.S. Supreme Court ruling on the legality of IEEPA tariffs could also affect outcomes.
The full Ontario Economic Report is available through the Ontario Chamber of Commerce at occ.ca.
