N.B. trade response on hold with U.S. tariff delay
Premier planned to remove U.S. booze from N.B. Liquor stores, avoid contracts with American firms
New Brunswick Premier Susan Holt said Monday she planned to remove U.S. alcohol from N.B. Liquor stores and avoid signing all but the most essential new contracts with U.S. firms as a response to President Donald Trump's tariffs.
But those provincial measures were likely on hold late in the day after Prime Minister Justin Trudeau announced the U.S. president would delay the tariffs by 30 days.
The punishing tariffs, which will add 25 per cent to the cost of most Canadian products crossing the border into the United States, had been scheduled to take effect at midnight Tuesday.
The delay postponed, at least until early March, a potentially severe hit to New Brunswick's economy.
Holt said Monday she was concerned that some New Brunswick companies were eyeing a shift of their production to the United States to avoid the tariffs, if only temporarily.
"We have heard from a number of employers who have the opportunity to shift production into the U.S. as a temporary measure while the tariffs are in place," she said.
"I have serious concerns about these tariffs becoming permanent, and it is our goal to remove them as quickly as possible."
Holt said the province was looking at ways to help companies "defray" the additional costs, "but we also won't be able to subsidize the full effect of that production to prevent it from going into the U.S."
At least one major New Brunswick employer, J.D. Irving Ltd., has said that it could move some operations to the U.S.
"Tariffs at anytime are going to hurt, but we're going to be able to shift our production operations to other locations while we wait for a negotiated settlement," Mark Mosher, the vice-president of Irving Pulp and Paper, told CBC News last week.
J.D. Irving spokesperson Anne McInerney said Monday that Mosher's comments were "pretty hypothetical."
"It is simply too soon to say one way or the other," she said. "Like everyone, we're still waiting on details relative to the implementation of tariffs on Tuesday. Even so far today, there have been developments.
"It's all very fluid."
McInerney was referring to news Monday that Trump had delayed tariffs on Mexico by a month and that he had two phone calls with Prime Minister Justin Trudeau.
Trudeau posted on social media after the second phone call that the tariffs were on hold for Canada, too.
Holt said earlier in the day that if the U.S. delayed the tariffs on Canada, she would put off the province's responses as well.
The Premier said if the U.S. delayed the tariffs on Canada, she would put off the province's responses as well.
The premier said N.B. Liquor sells about $40 million worth of U.S. alcohol each year and while that was tiny in a North American context, it is "more than nothing," and combined with the same decision by other provinces could have an impact.
Moosehead Breweries CEO Andrew Oland said his company sells about 20 per cent of its output to the U.S., and he was worried about the impact of tariffs — or even an outright ban on Canadian beer in retaliation for provincial liquor retailers dropping U.S. products.
Holt was unable to say what the dollar value was of potential contracts with U.S. firms that would not be signed, a move that exempts "critical services for New Brunswickers that cannot be immediately replaced."
"Government procurement is significant but thankfully, much of it is Canadian and New Brunswick," she said.
The premier said the government would not cancel existing contracts with U.S. firms because of the cost of cancellation penalties and the disruption it would cause.
"We wouldn't want to destabilize the economy more than these tariffs have already done," she said.
University of New Brunswick economist Herb Emery said consumers will be hit as well because the U.S. move would drive down the value of the Canadian dollar, making U.S. products more expensive here.
"If we throw a tariff on top of that, we'll potentially have more cost going on consumers," he said.
Canadian products "are still going to be more expensive than the American products they'll replace, because if they weren't, we would have gone to them already."
The Atlantica Centre for Energy said Monday that New England buys $10.2 billion worth of fuel oil, natural gas and electricity imported to the region from Canada each year, all of it now subject to a 10-per-cent Trump tariff.
New Brunswick is the primary source of electricity in northern Maine, eight in 10 cars in New England use gasoline from Canada and 90 per cent of jet fuel at Boston's Logan Airport is from Canada, the research institute said.
"We all must raise our voices in opposition of a trade war between two countries that have historically had the best trading relationship in the world," said board chair Stephen MacMackin.
Irving Oil did not respond to a request for comment Monday. Eighty per cent of products from the company's Saint John refinery are exported to the U.S.
A professor at Dartmouth College in New Hampshire said on social media Sunday that Irving Energy, the company's New England retailer, was adding the 10 per cent tariff on Canadian home heating fuel to customers' bills.
"If there is any doubt that tariffs are passed through to consumers, the cost of propane to heat my house just went up by the amount of the tariff," Douglas Irwin wrote.
Holiday in this country, Holt says
Holt urged New Brunswickers to consider vacationing in places other than the United States this year if the tariffs came into effect.
"We would love to see New Brunswickers supporting New Brunswick and Canada at a time like this," she said.
A poll by Narrative Research taken last week, before Trump announced the tariffs on Saturday, found that almost two-thirds of respondents in the Maritimes — 62 per cent — planned to travel less often to the U.S. because of Trump's presidency.
Three per cent of those surveyed said they would travel to the U.S. more, and 26 per cent said their travel frequency wouldn't change.
Holt said she believes a strong buy-local sentiment in response to the tariffs "comes alongside a bit of an anti-American sentiment, a frustration, that our closest neighbour and trading partner has decided to treat us this way."
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With files from Silas Brown, Jordan Gill and Nipun Tiwari
