In a tariff war with the U.S., these industry leaders have some ideas about how Canada can come out ahead
Time to start separating Canadian economy from United States, say industry heads
The U.S. government says it will officially impose country-specific tariffs on Canada next week.
Economists, business people and labour leaders see this as a time to start separating the Canadian economy from the United States. From counter tariffs to buy local campaigns, Newfoundland and Labrador is already seeing some movement on that issue.
However, experts say there are many more things Canadian politicians, companies and consumers can do.
Derek Jouppi lives in Toronto, and has developed a website called "ByCanada.tech," which tracks hundreds of tech startups across the country and offers alternatives to U.S. products.
"One of the things we built in from Day 1 is that you can look up American products inside of our database, but instead of getting returned American results, you will get the Canadian equivalents or as close as we can get across what we've been able to find so far," he said.
"I hope that in time, I'll be able to connect with people who do sourcing at the provincial or federal levels or in bigger industries to help them use our database to make more informed decisions."
Raul Munoz is the manager responsible for mining at Marsh — one of the world's biggest insurance brokers and risk assessors. He says Canadian companies need to think about protecting themselves as they plan to move away from the U.S. market.
"We're really advising exploring trade credit insurance to mitigate payment default from those new markets," he said. "As well as political violence and political insurance as they enter some of the less stable jurisdictions."
He also recommends stockpiling materials.
"A lot of companies, as we know, are increasing inventory levels before the tariffs take effect. So it's essential for them to review what sort of coverage and property and stock supply so everything is adequately protected," he said.
But a senior researcher at the Canadian Centre for Policy Alternatives, a national, non-partisan research group, has another suggestion.
"How much does Trump care about various businesses across the country? It's hard to say," said Hadrian Mertins-Kirkwood. "But he certainly cares about his own and his friends' financial interests. So yeah, that's the rationale. You put sanctions on Trump's inner circle in some way."
Mertins-Kirkwood says Canada can freeze assets, making it harder for Trump allies to do business in Canada.
"This is a tried and true playbook that Canada and other countries have used in other contexts," he said. "So when Russia invaded Ukraine, immediately the Russian oligarchs in Putin's inner circle were sanctioned by Canada and other governments. So, it's a tactic that gets other governments to take notice, without necessarily hurting consumers and households in Canada."
He also thinks there's a role for Ottawa to play in the areas of intellectual property and foreign acquisitions of Canadian companies.
"There's all sorts of things we are not allowed to make in Canada because the intellectual property is owned by American companies. Pharmaceuticals are one example of that," he said.
"So you could say this is in reaction to the U.S. implementing tariffs, or as me and my colleagues say, economic warfare, this kind of aggression. You just invalidate those U.S. patents. You say Canadian companies can just make generic versions of these U.S. goods whether it's drugs or otherwise."
Mertins-Kirkwood said that would actually lower the cost of living in Canada, and it would make medications more accessible.
"And it would hurt U.S. corporate interests who are profiting off those rights," he said.
There's all sorts of things we are not allowed to make in Canada because the intellectual property is owned by American companies.- Raul Munoz
In terms of foreign ownership of companies, he says tariffs will weaken the Canadian dollar and leave companies vulnerable for takeover. He thinks Ottawa needs to make stronger laws about acquisitions, and in some cases even take ownership of vital companies. And, he says, manufacturers can help by procuring components for their products from Canadian or, at least, non-U.S. suppliers.
In terms of energy, Mertins-Kirkwood suggests levying an export tax so U.S. buyers would have to pay more for the energy we send south, while Canadian suppliers benefit. It wouldn't be easy for the U.S. to avoid an export tax on energy because they don't have alternate sources to fill the gap if they look to buy elsewhere, he said.
Mertins-Kirkwood also advises the federal government to protect Canadian identity at a media level.
"We shouldn't discount how important this cultural element is," he said. "Many of us get our news and information and our political views from the U.S., at a time when the U.S. is talking about annexing Canada," he said. "I think it's pretty clear, and we support the idea that we need a stronger CBC. You need national and you certainly need public broadcasters across the country doing work that no one else is going to do."
He also thinks it's worth looking at restrictions on U.S. media broadcasting in this country, although he admits it'll be hard for people to give up on U.S.-owned social media.
When it comes to finding new markets, Munoz says some items, like precious metals, can be easily sold on elsewhere.
The Business Development Bank of Canada is advising clients to look within the country first, which would mean ramping up efforts to eliminate inter-provincial trade barriers.
It also suggests businesses take advantage of free trade agreements with the EU and Asian countries that already exist but are underused, and developing a user-friendly online presence is vital.
However, for some products like cars, which cross the border eight times during manufacturing, the integration with U.S. producers is so tangled together it will take time to unwind.
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