Manitoba businesses focused on local sales avoiding big hits from tariff troubles
'Stores are putting Canadian flags on our products and not on our closest competitor's products,' says owner
Tariffs are taking a toll on nearly every sector in Manitoba, with many businesses concerned about the increased costs they may bring and the uncertainty that comes with having President Donald Trump at the helm in the U.S.
But some, like Tiny Monster Garden owner Ryan Gauvin, say their business hasn't taken a hit from the 25 per cent tariff on virtually all Canadian goods entering the U.S., which was imposed this week but put on hold for at least some good on Thursday.
Gauvin's business, based in Lorette, just southeast of Winnipeg, sells seeds to local farms in Manitoba, and doesn't do large exports outside the country.
"When we first started hearing about the threat of tariffs earlier this year, I saw a definite spike in my sales, and that's probably a lot like the COVID pandemic," said Gauvin, who sells seeds adapted to Manitoba's growing conditions and ideal for people starting a local garden.
"People see the looming threat of volatile food prices or inflation or disrupted supply chains, and they think, 'Well, how can we mitigate the effects of this on our family?' Starting your own garden is one way to do that."
Gauvin said he used to export to the U.S., but "started backing away last year" due to changes with the U.S. Postal Service's parcel system.
"It just made it not cost-effective for me or my American customers to buy my seeds anymore," he said.
While the tariffs are going to affect a lot of his peers in the agriculture industry, Gauvin hopes the disruption might spark some positive change — "maybe altering our food system so it's a little more resilient, more people growing home gardens, more people joining their local farm CSAs [community-supported agriculture] or meat share programs," he said.
"Those are positive things that will have a long-term effect … far beyond the tariff situation."
Amy Nikkel, who owns Adagio Acres in the Interlake, said she isn't feeling the pressure of tariffs right now either. She grows organic oats and processes them entirely on her farm before they're sold in grocery stores across Manitoba.
She said she's seen an increase in sales over the last month.
"The stores are putting Canadian flags on our products, and not on our closest competitor's products," Nikkel said of her organic oats.
"So people who are looking for a comparable product … now they're discounting one of those options, so we're certainly seeing increased sales because of that."
Nikkel said her business is an exception, and a lot of her farmer friends are running into problems trying to sell their products south of the border.
They've had to make some drastic pivots to keep their business financially viable, she said.
But the fact her business has managed to avoid the impact of tariffs is validating, she said, and she thinks its business model could be a more robust way of growing food.
"When you keep your supply chain short and you keep your products local to home, and you keep the food that's being grown here actually eaten here, I think there is less radical shake-ups when political problems come our way."
Challenges with 'buy local' push: prof
While Trump has postponed the tariffs on some imports from Canada and Mexico for a month, the impact is still a concern, says Dan Shin, a professor of supply chain management at the University of Manitoba.
Canada, the U.S. and Mexico have a complex and efficient supply chain, and manufacturers across North America use this relationship to source their needs from the cheapest option — not necessarily the closest, he said.
Tariffs could complicate that relationship.
"Some things Canada is just better at, some things U.S. is better at, so we were just relying on each other's strength to cover our weaknesses," said Shin.
"But now … we have to do something to take care of our weaknesses, and where we lack, we're going to have to do it ourselves or we're going to have to pay up."
Shin said the push to buy Canadian goods could also be challenging for manufacturers.
"In a hypothetical situation where all the Canadians start purchasing only from Canadian businesses for Canadian goods, they're not going to be able to meet that demand," he said.
"So prices are going to go up, which will further exacerbate the impact of inflation, and the question now becomes, will the Canadians be willing to pay this premium for Canadian goods?"
Shin believes Canada should reassess its supply chain, and look for ways to be more resilient in the face of uncertainty from tariffs or political friction.
"I am looking to see more talks, and more action towards what we can do within Canada to reduce some of our trade barriers between provinces."
