Canadian businesses are commencing operations on Tuesday amidst the implementation of the federal government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While many business owners prepare for increased costs and supply chain challenges, experts suggest that consumers may not experience significant impacts.
The tariffs, which came into effect at 12:01 a.m. on Tuesday, target nearly 700 American products with varying rates from 15 per cent to 50 per cent. These products range from essential commodities like steel and aluminum to everyday items such as toilet paper, as well as specialized goods like coin-operated arcade games.
In response to the 50-per-cent tariffs imposed by U.S. President Donald Trump’s administration on August 22, the Canadian government introduced the dollar-for-dollar tariffs. Dan Kelly, the president of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized businesses nationwide, expressed concerns that these escalating trade tensions are disproportionately affecting smaller businesses.
JS Furniture, a Manitoba-based retailer, estimates that 60 per cent of its sales volume comes from American goods. General manager Brian Kyca highlighted that certain items like laminate-style bedroom suites will be significantly impacted by the tariffs, with larger pieces facing a 50 per cent tariff and smaller components a 25 per cent tariff. The lack of clear information from agencies like the Canada Border Services Agency has made assessing the situation challenging for businesses like JS Furniture, who plan to absorb the increased costs for now.
Colin Mang, an economics professor at McMaster University, noted that retailers are facing a difficult decision on whether to pass on tariff costs to consumers or absorb them to maintain profitability. However, the impact on the average Canadian consumer’s daily life is expected to be minimal as the new tariffs primarily target products with available domestic alternatives.
Bank of Canada Governor Tiff Macklem emphasized that while the tariffs will impact some businesses, they are applied to a limited range of products. Kelly expressed concerns over the uneven burden the tariffs place on certain businesses. The trade tensions have stalled JS Furniture’s expansion plans and are starting to affect their employees, especially sales staff reliant on consumer spending.
Mang highlighted that the tariffs aim to promote domestic market growth for Canadian companies, with minimal impact expected on consumers’ daily lives. The overarching message is that the tariffs are unlikely to significantly affect the majority of Canadians in their day-to-day activities.