Two Businesses. Same EBITDA. Very Different Value.

September 25, 2026

How a practical response to tariffs can protect business value—and create opportunities for buyers and sellers.

A business owner cannot negotiate Canada’s trade policy. But they can negotiate with suppliers, revisit pricing, broaden their customer base and improve how their business operates.

For anyone considering buying or selling a business, that distinction matters. The economic environment is part of the story. What management does about it is another.

In his September 21, 2026 speech, Bank of Canada Governor Tiff Macklem warned that Canadian fourth-quarter growth could fall below 1% if new tariffs remain in place. But the speech also contained a more encouraging message: businesses are adapting. They are changing supply chains, pursuing new markets and investing in productivity. Business investment rose at an annualized rate of 8.8% in the second quarter. [1]

The takeaway should not be that everything is fine—or that every owner should put their plans on hold.

It is that uncertainty makes the quality of a business’s response more important.

The Same Earnings Can Tell Different Stories

Consider two hypothetical businesses, each reporting $1 million in historical EBITDA—earnings before interest, taxes, depreciation and amortization.

Business A depends heavily on one U.S. customer and a narrow group of suppliers. Higher costs are starting to squeeze margins. Management has not qualified alternative suppliers or updated its forecasts. The plan is largely to wait for trade conditions to improve.

Business B has customers across several markets, has tested alternative suppliers and has adjusted pricing where commercially feasible. Management can show which costs have increased, how much has been recovered and what additional changes are underway.

The historical earnings are identical. The confidence a buyer can place in future earnings is not.

That distinction belongs in the valuation. Forecast earnings and cash flow, customer and supplier concentration, growth prospects and dependence on key people all help determine value. Last year’s EBITDA is a starting point, not the whole answer. [2]

This does not mean every tariff-exposed company deserves a discount, or that diversification automatically earns a premium. It means buyers and sellers need to understand the specific business rather than apply a general conclusion from the headlines.

For Sellers: Make Your Response Visible

A useful sale-preparation question is no longer simply, “Are we exposed to tariffs?”

It is, “What have we done about that exposure, and can we prove it is working?”

Start by mapping the effects on your business. Look beyond direct exports and imports. An entirely Canadian customer may still reduce orders because its own U.S. business has weakened. Review customer concentration, supplier dependencies, product margins and the effect of changing costs on cash flow. [3]

Then document your response. A new supplier becomes more persuasive when it has delivered acceptable products at a verified cost. A pricing change becomes more persuasive when customers have accepted it, and margins have improved. A diversification plan becomes more persuasive when it produces orders rather than a list of prospects.

The objective is to connect management’s actions to measurable financial results. Trade-related risks, pricing decisions and supply-chain changes should be reflected in forecasts and supported by clear assumptions. [4]

There is also an important earnings-normalization issue. A cost does not become a legitimate add-back simply because it is unwelcome. Normalized EBITDA generally adjusts for genuinely non-recurring or extraordinary items. Applying that principle, an ongoing tariff-related operating cost should not simply disappear from the earnings presented to a buyer. A documented, one-time transition expense may warrant different treatment. [5]

Our recommendation: build a clear bridge from historical earnings to current performance and then to your forecast. Separate improvements already achieved from those still requiring money, time or customer acceptance.

That is a stronger selling position than asking a buyer to assume everything will return to normal.

For Buyers: Look Beyond the Apparent Bargain

An uncertain environment calls for better analysis, not an automatic retreat from acquisitions.

A business facing manageable supply-chain issues might be a good fit for a buyer with stronger purchasing relationships. A company concentrated in one market might complement a buyer with access to other customers. These are potential strategic advantages—not benefits to assume without testing. A particular buyer’s synergies can influence the price they are willing to pay, separately from the business’s stand-alone value. [2]

The key question is whether the buyer has a credible, costed plan to improve the situation.

Review recent monthly results, not just the last completed financial year. Test what happens if tariffs persist, customers reduce orders, or price increases recover only part of the additional cost. Scenario analysis helps distinguish a temporary disruption from a lasting change in profitability. [6]

Also look beyond EBITDA. The business must fund taxes, equipment, inventory, receivables and debt payments. Acquisition financing should be assessed against the company’s ability to service debt after the transaction—not merely against the purchase price or last year’s earnings. [7]

Our advice is straightforward: leave room for the transition to be less than perfect. A purchase that works only under the most optimistic forecast needs more work before it becomes a good deal.

Practical Ways to Reduce the Pressure

There are constructive steps available to both existing owners and incoming buyers.

Protect margins deliberately. Review profitability by product, service and customer. Consider targeted pricing changes, purchasing alternatives and process improvements rather than relying on across-the-board price increases or indiscriminate cost cutting. The right response depends on customer relationships, competitive conditions and how much of the additional cost the market can absorb. [3]

Build options without creating new problems. Alternative suppliers and markets can reduce concentration, but compare total delivered costs, quality, reliability and the investment required. Diversification should improve the business’s economics and resilience—not merely move the risk somewhere else. [4]

Address cash needs early. Update cash-flow forecasts and discuss potential financing requirements before they become urgent. BDC offers tariff-related financing and advisory support for eligible businesses, including support for cash flow, productivity and adaptation. Eligibility and repayment capacity still matter; additional borrowing is a tool, not a substitute for a viable operating plan. [8]

There May Also Be Room to Structure a Better Deal

When buyers and sellers disagree about future performance, the answer is not always to abandon the transaction.

In suitable circumstances, a clearly defined earnout can connect part of the price to future results. Seller financing can help bridge a funding gap. However, neither arrangement removes risk: an earnout makes part of the seller’s proceeds conditional, while seller financing exposes the seller to repayment risk. Both require careful financial and legal review. [9]

The aim should be a transaction that the business can support, and both parties understand—not an impressive headline price resting on optimistic assumptions.

Do Not Confuse Uncertainty With Helplessness

Tariffs are not good news simply because businesses can adapt. But adaptation gives owners and buyers something useful to work on.

For sellers, our recommendation is to demonstrate how earnings are being protected and what remains to be done. For buyers, it is to distinguish risks they can realistically manage from problems they are merely hoping will disappear.

Waiting may be appropriate for some owners. Selling or buying may still be appropriate for others. The decision should come from the business’s circumstances, the owner’s objectives and a realistic financial assessment—not a hope that the headlines will soon become reassuring.

Before deciding to buy, sell or wait, understand what has changed in the business’s earnings, risk and financing capacity. That is where EVCOR’s valuation and transaction advice can help turn a broad economic concern into a specific business decision.

You cannot control the headlines. You can strengthen the business behind them.

Sources

1. Bank of Canada – Navigating uncertainty and adapting to change
2. BDC – How to value a company
3. BDC – A new round of American tariffs is here: What should you do now?
4. BDO – How to navigate Canada’s evolving trade landscape
5. BDC – EBITDA
6. BDO – Tariffs and M&A deals: Navigating uncertainty in a shifting landscape
7. BDC – How to value the business you’d like to acquire
8. BDC – Tariff-related business support
9. BDC – How to finance the sale of your business