Manitoba braces for economic hit from tariffs premier calls 'an attack on Canadians'
Manitoba producers say tariffs will devastate industry on both sides of border
Manitoba business owners and industry associations are bracing for a harsh economic hit with U.S. tariffs on Canadian exports set to kick in Tuesday that threaten to disrupt trade and reduce demand in industries that support thousands of jobs.
U.S. President Donald Trump's long-threatened plan to impose the tariffs materialized on Saturday, as he said a 25 per cent tariff on virtually all Canadian goods will begin this week Tuesday, according to a fact sheet from the White House sent to CBC News.
"Both the United States and Canada are going to lose," said Cam Dahl, general manager of the industry association Manitoba Pork.
"Consumers on both sides of the border are going to lose. Farmers on both sides of the border are going to lose," he said.
"This is going to have a very significant impact not just on Manitoba pork farmers but on the whole province."
The province exports more than $450 million worth of pork and $200 million in livestock to the U.S. every year, he said.
The 25 per cent tariff could lead to a disruption of trade with Manitoba's largest markets for pork — coming at the expense of an industry that supports around 23,000 jobs.
WATCH | 'Both the United States and Canada are gong to lose,' says Manitoba Pork GM:
For Manitoba, there are no alternative markets for the export of live animals except the U.S., Dahl said, and in the short-term there aren't viable options that could fill in for pork exports if there is a gap in the demand from the U.S.
"We're very export-dependent" and "very integrated with the United States," he said Saturday afternoon, before the U.S. had officially confirmed the tariffs.
"Ultimately, here in Canada, if high tariffs remain in place, we are going to see a reduction in production … and that's going to cost our economy, and that's going to cost jobs."
The health quality of Manitoba's piglets has been sought after by American pork producers who buy around three million every year, said Rick Bergmann, vice-chair of the Manitoba Pork Council and a producer in Steinbach.
Bergmann's hog farm exports up to 35,000 pigs to the U.S. every year and the revenue allows them to be in business, pay employees, and be involved in the community, he said.
With the tariffs, Bergmann's farm could face revenue loss and the need to reduce its herd size if demand plummets, impacting also American grain producers who sell soybean meal and corn to feed the pigs, he added.
But depending on how long the levy is in effect, a 25 per cent tariff could "easily shut down" farms given the significance the U.S. market holds for Canadian producers.
"A lot of farms have been established over the years … [they] have some deep roots and a trade-war like this can erode those roots in a short period of time," he said.
The ripple effect would cascade like a domino, Bergmann said, impacting other industries like trucking companies, and towns that rely on pork production.
'It's a tariff wall and it's targeting us': Kinew
Prime Minister Justin Trudeau convened a meeting with premiers Saturday afternoon to discuss Canada's response to tariffs.
In a video posted to social media after the meeting, Manitoba Premier Wab Kinew referred to the tariffs as "an attack on Canadians."
The premier said Manitoba will "fully support" the federal government's response to the tariffs, adding his government will be announcing "new steps every single day this week" to protect jobs and safeguard the economy.
"Trump built a wall, but it's a tariff wall and it's targeting us," he said, calling on Canadians to "stand together … and to be united."
"If you're looking for ways to fight back, just remember to shop local, and to buy Canadian. Where you choose to spend your money, those are some of the most important decisions that you make," Kinew said in the post.
Manitoba's Progressive Conservatives said in a statement the province's economy depends on free and open trade and the party's priority is to restore mutually beneficial trade with the U.S. while "knocking down barriers" within Canada to stifle growth.
The Canadian Manufacturers and Exporters Association, meanwhile, said in a statement that it is "extremely disappointed that the U.S. administration has imposed punitive, unjustified tariffs [on] one of its largest and most important allies and trading partners," saying they will "hurt manufacturers, workers and consumers in both countries."
The industry association will continue working with the federal and provincial governments to support measures to mitigate the impact of the levy on Canadian goods, said the statement from Prairies regional vice-president Terry Shaw.
Small businesses bracing for impact
Derek Eastveld, co-owner of the Manitoba-based guitar amp and pedal manufacturer Revv Amplification, said about half of his business revenue stems from exports to the U.S.
If shipments are delivered without including the new 25 per cent levy, customers in the U.S. would have to pay it before getting the product, which Eastveld fears could lead to customers returning purchases.
"We lose the sale, and we lose the cost of shipping … and we also have to pay to recover it back," he told CBC Saturday afternoon.
The small business, which operates out of Ile De Chênes, just southeast of Winnipeg, has kept prices low compared to other brands that manufacture boutique amplifiers, but the tariff will bring Revv's prices on par with others, he said.
"It'll hurt if they want to buy our product, and then I assume there will be a drop in demand, maybe, in the short term," he said. "People will just decide that it's too expensive."
Depending on the decline in demand, job losses could be in line, he said.
With the threat of retaliatory tariffs on American goods coming to Canada, Eastveld said his business has stocked up on raw materials imported from the U.S., and in the coming months, the Revv will probably start replacing those source inputs from within Canada.
But "it's expensive to manufacture at home," he said. "We're at the mercy of what both governments will do."
"The measures that either [country] are taking immediately impact small businesses and consumers at a time inflation has been crazy."
'Let's work together to get through it': potash producer
The tariffs come as Manitoba's first potash mine is preparing to produce 250,000 tons of the mineral over the next 18 months.
At least 65 per cent of that product, worth roughly $76 million a year, is slated for exports to the U.S., said Daymon Guillas, president of the Potash and Agri Development Corporation of Manitoba, or PADCOM, mine located in Harrowby, near the Manitoba-Saskatchewan border.
"We'll lose revenue or revenue will drop for some," he told CBC Saturday, after Trump signed the executive order imposing tariffs. "We'll still be profitable, [but] certainly far less."
If the already-low Canadian dollar drops further, that will give Americans more buying power, Guillas said, absorbing some of the hit from the 25 per cent tariff they will now have to pay for Canadian potash.
But "if some of our American buyers and friends need a discount, we're going to do it, because we will never ever burn a bridge with our customers," he said.
"We have to protect our citizens, but we also have to respect our neighbours and look for solutions."
The U.S. produces its own potash, but not enough to meet its own demands. With the mineral being crucial for the production of fertilizer, the country has to import millions of tons, and there are few places from which it can do so, Guillas said.
He remains confident Canada and the U.S., long-standing partners and neighbours, will work together to move past the trade fight.
Guillas also said he believes Manitoba is "in good hands," after the province created a 16-person U.S. Trade Council, which includes representation from a range of industries and sectors, and the premier touting the idea of ramping up operations at Churchill's port.
"When the neighbours are upset, let's work together to get through it," he said. "We are here for the long term."
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With files from Felisha Adam