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U.S. Tariffs: What you need to know

Stay informed on the latest developments with tariffs and access resources to support your business

The ongoing tariff situation is rapidly changing and deeply impacting businesses across size and sector. We have compiled a list of the latest developments, what we are advocating for at all levels of government and the supports that are available to you.

Our advocacy relies on input from our members. We are always eager to hear from you – whether to share your experience, provide input on our recommendations to government, or to let us know how we can serve you during this time of uncertainty and rising costs.

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Government Response

The Canadian government has imposed retaliatory tariffs on specific products to make American goods more expensive in Canada, negatively impacting U.S. companies and ultimately, consumers. While necessary from a diplomacy perspective, this increases the cost of many goods sold in Canada by 25%. Where there are substitutes, Canadians can switch to those to avoid paying higher prices, however where there are no alternatives, Canadians will be forced to pay 25% more – despite the fact the intrinsic value of what is being purchased hasn’t increased.

The Alberta government will be modifying procurement practices for government agencies to prioritize Albertan and Canadian options.

Additionally, the AGLC has been directed to immediately cease the purchase of American liquor products and VLTs.

Grocery and other retailers will be assisted with labelling Canadian products and will be asked to voluntarily purchase their stock from Albertan and Canadian businesses.

Lastly, to address interprovincial trade barriers, the Government of Alberta has indicated it will enter free trade and mobility agreements with any other willing Canadian provinces and territories.

The City of Calgary has indicated they will develop a tariff tracker to understand the impacts on Calgary, adjust their procurement policy, and create a webpage that helps businesses understand available substitutes for their goods.

On March 31, the city announced specific changes to its procurement policy. Changes include

  • For large procurement of goods or materials: the Social Procurement Questionnaire weighting will be increased to 10%. This is up from the current range of five to 10%. This increase will benefit small and medium businesses.
  • For large procurement of services: the Social Procurement Questionnaire weighting will be increased to 10%. The range will stay within five to 10% and we will review service procurements on a case-by-case basis. These are for purchases over $75,000 for goods and services and over $200,000 for construction.
  • For small procurements: get all three quotes from local suppliers, where possible. This is up from getting one local quote out of three quotes. When not possible, try to prioritize Canadian suppliers. These are for purchases under $75,000 for goods and services and under $200,000 for construction.

Markets have responded as expected – dropping significantly on Tuesday before recovering modestly on Wednesday, following announcement of the auto tariff reprieve.

What you can expect

  • A tariff on Canadian goods means that Americans pay a tax of 25% on Canadian goods, which goes directly to the U.S. government. This makes Canadian products less competitive in the U.S. because the cost to consumers increases. 
  • With rising prices, consumer spending may decrease. We’re particularly concerned about the impact to sectors that fall in the category of discretionary expenses, which are usually the first hit by economic challenges.   
  • Local and non-American goods will be relatively cheaper. Looking for opportunities to switch to local options will help businesses and consumers mitigate rising costs.   
  • Contracts may be renegotiated or adjusted. Suppliers may amend contracts using emergency provisions, meaning the prices of various goods already agreed upon may increase, particularly for items ordered with a long lead time such as construction inputs. Some may not be honoured at all.  
  • Ultimately, by increasing prices, tariffs are inflationary, the Bank of Canada is currently projecting inflation to be 0.7% higher under tariffs. In light of this, the Bank of Canada is anticipated to announce more aggressive rate cuts, possibly to 2% or 2.5% mid-year, should tariffs persist.   
  • Investors on both sides of the border are hesitant to invest capital because they do not have the certainty required to make investments. Access to capital will likely be a bigger issue in the short term but could be moderated by further interest rate cuts. Overall, there will be a significant amount of volatility in the markets, as both debt and equity markets adjust to all the uncertainty.   
  • Longer term, it’s anticipated this will impact Canadian GDP growth (0.5% projected with tariffs vs. 2.5% projected without), and employment lower by 36,000 in 2025 and 60,000 in 2026. Alberta could see unemployment numbers persist at the 7% range.  
  • Oil prices have been under pressure, with WTI dropping from the average of $76.55 US per barrel in 2024, falling to $66.31/bbl on Wednesday. This is the lowest price for WTI since 2021, when it averaged $68.13/bbl and largely the result of the OPEC+ decision to increase oil production. There are no substitutes for Canada’s oil production, as it feeds the US refining complex. Additionally, energy use is inelastic, which means consumers will pay the higher prices at the pump due to the tariffs, muting the immediate impact to the sector. Further, the low Canadian dollar softens the impact of lower prices, when resources are sold in USD and converted to CAD. 

Our recommendations

We’re working closely with all levels of government to develop immediate and longer-term plans, working to mitigate risk in the immediate term and make good use of a crisis in the long term.

As an immediate response, we recommend governments:

Longer term, we encourage governments to:

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Calgary businesses brace for impact: survey reveals deep concerns over U.S. tariffs

To better understand the anticipated impact on Calgary businesses, the Calgary Chamber launched a survey to our membership in early March. We asked how businesses believe they may be impacted by tariffs, what information they might need to navigate the everchanging trade landscape, and what policy solutions our membership would like Canadian governments to prioritize.

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Keep it Canadian: Shop Local

Encouraging support for businesses that contribute to the Canadian economy and community during these uncertain times.

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Supports for your businesses

We have compiled a short list of resources available to you to navigate the ongoing impacts and uncertainty of tariffs. Please note that this list is not comprehensive. For more resources, visit Startup Canada’s Tariff Toolkit.

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