How to react in business during a crisis

Tariff hikes, falling financial markets, rising interest rates — turning the challenge into a growth lever

Since early 2025, Quebec and Canadian businesses have been living through an economic shock of unprecedented scale, triggered by new American tariffs, compounded by extreme market volatility and rising interest rates. Bank of Canada Governor Tiff Macklem described the tariffs as an economic disruption of the century, signalling a serious risk of prolonged recession should the trade conflict continue. In this climate of uncertainty, inaction can prove fatal: only companies that anticipate, adapt and exploit the new dynamics will maintain — or grow — their competitiveness.

1. Tariff hikes: rethinking your value chain

The 25% tariffs threatening goods imported from Canada into the United States call production and distribution models into question, particularly in manufacturing and agri-food. These duties, until now virtually non-existent under USMCA, would raise costs abruptly for key inputs, both finished goods and component parts.

Key strategies:

Geographic diversification: redeployment or alternative sourcing in third countries (Europe, Southeast Asia) to reduce dependence on the American market.
Supply chain restructuring: bringing suppliers closer, within Quebec or Canada, to cut logistics and customs costs.
Customs flow optimisation: greater use of bilateral and multilateral free-trade agreements (CUSMA, CPTPP) and of legal instruments such as duty drawbacks and tax credits.

2. Market volatility and access to financing

The rapid fall in global stock indices since autumn 2024 has weakened investor confidence and restricted access to credit. SMEs, traditionally less resilient to liquidity tightening, are seeing their credit lines become more expensive and their short-term financing costs climb.

Recommended actions:

Strengthen cash reserves: build liquidity buffers and put flexible facilities in place (revolving credit lines, invoice discounting).
Financial partnerships: work with the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to access "pivot" loans or credit guarantees at preferential rates.
Multiple financial scenarios: budget under optimistic, likely and pessimistic scenarios, incorporating assumptions of contracting demand and further increases in financing costs.

3. Rising interest rates: controlling your cost of financing

With the policy rate held at 2.75% in April 2025 after seven successive cuts — and potentially rising again should inflation return — companies must revisit their debt structure. The cost of capital becomes a critical parameter for growth and expansion projects.

Adaptive measures:

Refinancing and renegotiation: take advantage of fixed or near-fixed longer-term rates available on the market to lock in borrowing costs.
Extending maturities: spread debt over longer horizons, easing short-term principal repayments.
Active cash management: optimise working capital by reducing receivables outstanding and negotiating supplier terms.

4. Advanced strategic frameworks for steering through a crisis

Beyond tactical responses, it is crucial to adopt strategic approaches grounded in proven concepts:

Scenario planning: forward-looking scenarios built by combining macroeconomic variables (rates, growth) with sector variables (tariffs, volumes) to identify decision paths today.
Dynamic capabilities: continuous development of organisational agility — rapid reallocation of resources, accelerated learning — in order to seize new opportunities before competitors do.
Supply chain resilience: a four-step approach — mapping critical suppliers, assessing vulnerabilities, building redundancy and running disruption simulations — to guarantee continuity of supply despite shocks.

5. Digitisation, automation and artificial intelligence

Integrating digital technology and AI is a major lever for cutting costs and strengthening competitiveness:

Process automation: automating repetitive tasks (invoicing, inventory management) to reduce operating expenses and processing times.
Predictive analytics: using data (sales, logistics, customer behaviour) through AI to anticipate market trends and adjust your offering in real time.
Collaborative platforms: adopting cloud solutions and interoperable ERP systems to smooth collaboration between departments — sales, finance, operations — and with external partners.

These initiatives not only absorb the cost shocks induced by tariffs and rates, they also create a durable competitive advantage.

6. Quebec support and resources

The Government of Quebec and several organisations offer targeted programmes to help SMEs weather the crisis:

Investissement Québec: the Frontière (up to $50M), Chantier productivité and Panorama programmes, financing relocation, diversification and productivity.
Conseil du patronat du Québec: loans and grants for affected exporters, plus support for employee training and skills development.
BDC and EDC: "pivot" loans and credit guarantees to secure cash flow needs and win new markets outside the United States.

This web of financial support and sector expertise allows Quebec companies to reduce their risk and embrace new strategic directions.

7. MAVECO: your partner for turning crisis into opportunity

At MAVECO we specialise in strategic planning, omnichannel business development, operational optimisation, digital transformation and the deployment of artificial intelligence tools. Our services include:

Tailored strategic diagnosis: analysis of sector impacts and bespoke recommendations.
Design and rollout of action plans: financial scenarios, digital transformation, process optimisation.
Operational support: project management, agile delivery, team training.

Drawing on a proven methodology and a network of financial and technology partners, we help SME leaders not merely survive crises, but rebound stronger.

Conclusion

Economic crises driven by tariffs, financial markets and interest rates are not inevitabilities: they are strategic pivots where boldness, preparation and expertise can turn a shock into a catalyst for growth. Adopt a rigorous, proactive approach today, and let MAVECO guide you toward innovative and resilient solutions.