Province trying to help businesses navigate uncertain trade waters

On July 1, Canada introduced counter-tariffs on U.S. products, including steel and aluminum, which would cause problems for some Island businesses.

The close connections between the Canadian and U.S. economies present problems when trade disagreements arise says Kal Whitnell, director of economic research and trade negotiations with the government of P.E.I.

So it kind of puts a chill effect … on business investment and it makes it really difficult to understand what business should be doing in this type of climate.— Kal Whitnell 

"Because of the integrated supply chains that have been developed over the last number of years especially since the early 90s with NAFTA … some companies are identifying that they may have or are already starting to witness increased prices from some of their suppliers," he said.

Higher input costs could be passed on to consumers but there are other options, said Whitnell.

"They may look at alternative suppliers from around the world as well — there's a number of things that they have to look at."

Guiding businesses

The  province`s job is to help businesses navigate through the problems they're facing by guiding them through the supports available through the federal government, said Whitnell.

There is about $2 billion in potential support available to businesses through the federal government.

The province has been trying to help businesses look further than the U.S. for partners.

"Even before this came down … the provincial government has been looking at helping companies diversify. That's not something that's new," he said.

'Competitive advantage'

Canada has several trade agreements in place that could also be leveraged to lessen dependance on the U.S. market, Whitnell said.

"We may have a competitive advantage or leg up on the United States, that they currently don't have agreements with certain markets — whether that's in the European Union, whether that's with Japan or others," he said.

"So I think there's opportunity here to really start to leverage those agreement and further diversify."

Trade protectionism has been on the rise in the last few years and creating an uncertain environment for businesses, Whitnell noted.

"It makes it difficult for businesses to react quickly and make certain investment decisions," he said.

"So it kind of puts a chill effect … on business investment and it makes it really difficult to understand what business should be doing in this type of climate."

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