After months of anticipation, tariffs on Canadian goods are set to take effect Tuesday, sending ripples of concern through Manitoba’s business community.
With the United States being one of Manitoba’s oldest and most significant trade partners, the consequences for businesses owners can be rough.
“There’s no winners,” says Justin Copp, Brunswick Steel president. “All this is going to do is drive up costs for consumers, whether it be buying a vehicle, buying an agricultural manufactured good, or whatever it might be. It’s going to cost everybody in their pockets.”
Brunswick Steel, which manufactures for agricultural businesses in Manitoba, is facing a particularly unique challenge. Many of Copp’s customers export their products to the U.S., and the new tariffs compromise their competitiveness in the market.
“If there’s customers that are shipping their products south of the border and if there’s tariffs on them, their product is just not as competitive anymore,” says Copp.
The tariffs, which will increase costs for U.S. consumers, effectively price Canadian goods out of the competition. This will impact Manitoba businesses, their finances and, most importantly, their employees.
“The government support will have to initially lay the burden of layoffs,” Copp says. “And these are going to happen if they haven’t already. Staff layoffs are difficult, and certainly no business wants to go through with it, but sometimes it’s necessary in a weak economy.”
Starting Tuesday, exports will face a 25 per cent tariff, with an exception for energy exports at 10 per cent.
Tyler Slobogian, senior policy analyst at the Canadian Federation of Independent Business, says the tariffs can be a major disruption for small business owners.
“This could cause a lot of chaos for small business owners who are already dealing with kind of small margins or limited margins,” Slobogian says.
“It could lead to less consumer spending, it could lead to layoffs and end up in closures if governments don’t act quickly.”
Slobogian and Copp both say that while trade negotiations might go on, interprovincial trade should be given a priority.
“We’ve been calling on the governments for a while to reduce the interprovincial trade barriers that exist within Canada,” Slobogian says.
“You know, some business owners in Manitoba have recently told us that it’s easier to do business internationally than with our counterparts in Saskatchewan and Ontario.”