The Current - U.S. tariffs push some Canadian businesses across the border

Episode Date: September 18, 2026

Many Canadian businesses are losing their US customer base after President Donald Trump imposed 50% tariffs. Some are now considering moving south of the border to avoid them. What relocating could mean for individual businesses, workers and the economy. 

The nation is watching Alberta, and we know it. I'm Kathleen Petty, host of West of Center. Every week I speak with the people shaping Alberta politics, from pipelines to separation, to help you understand what's going on here and why it matters to the entire country. Pull up a chair and join me, West of Center. Find us and follow wherever you get your podcasts.

This is a CBC. podcast. Hello, I'm Matt Galloway, and this is the current podcast. Faced with an escalating trade war with the United States, several companies working in Canada have signaled they are moving all or some of their operations south of the border. Stellantis, Interfor, Crown Royal, and Sapporo are some of the big ones, but a KPMG survey released this summer found a larger trend. 40% of Canadian manufacturers said they were considering moving some or all of their business to the U.S.

We'll look at the big picture for workers and the economy in a moment, but we'll start with two Canadian business owners weighing their options. First, I'm joined here in Ottawa by Jack Schinder. He is the CEO of Ambico, a manufacturer of specialized steel doors. Good morning. Good morning. So how much of your business do you deal with through the United States and into the United States? We sell about 75% of our product into the United States.

So 75% goes to the U.S. Correct. That's a big lion's share, isn't it? It is. And so what has all of this trade dispute meant for you? It's made us quite nervous, but at the same time, it's allowed us to look at different options to service the American marketplace. And how do you do that? What are your different options that allow you to still operate in Canada?

Well, the different options range from something as simple as purchasing American steel from time to time as the American. American Customs and Business Organization allows us to enter the United States at a very discounted rate using American Steel. At times, we license manufacturers who are colleagues of ours in the United States to manufacture our product in the U.S. if we feel that we're going to be subject to large tariffs. The 50% tariff that we are hearing there is now on Canadian steel products doesn't affect you if you use American steel and if you produce what you produce in the U.S., I assume. Correct on both accounts. Okay. And so how often are you going to American steel now where you used to use Canadian steel?

Well, the truth is we didn't use to use a Canadian steel or, frankly, take a lot of effort to find out where our steel was coming from. Sometimes it was Canadian steel, sometimes it was European steel, sometimes it was American steel. But when the terrorists came into effect in March of 2025, the origin of steel became very important. So at that time, we came to understand that the use of American steel would allow us to skirt American tariffs going into the United States. That changed somewhat in April of this year, but by and large, that's the reality that we face. And how much have you heard from folks who are upset that you use American Steel? We have not heard any feedback from anyone. They're looking for a good product.

They're looking for quality and service on both sides of the border. That being said, we don't use the American Steel for our Canadian customers or for our foreign customers. There's no need in that case. But certainly with the American customer base that we have, and we have hundreds of customers in the U.S., they don't ask too many questions. They're basically interested to know whether they are going to be subject to any sort of tariff put on by their own government. And our answer to that is, no, we have you covered. Okay. So you found some workarounds, but have you ever thought about moving your whole production south?

We have thought about the possibility of setting up some sort of operation in border. States. We had that discussion internally in 2016 when the first Trump administration came into power. We didn't think it was feasible for us, even though we in Ottawa are only 45 minutes from the border. Why not feasible? We didn't think it made sense economically, and we didn't feel that the labor base there was sufficient for our needs. I understand the Canadian dollar, the strength of the Canadian dollar helps you, or the lack of strength helps you a little bit too. Tell me a little bit about that. It helps us more than a little bit. As you know, the Canadian dollars trading at about a 40% discount to the American dollar. I think this morning it was

at 71.5 cents. That helps us out tremendously because our costs by and large for labor, well, completely for labor, are in Canadian dollars. So yes, that's a huge advantage for us. And how much business do you think or how much has this affected your bottom line? All of what we've been talking about right now in the last year and a half? It hasn't hurt our bottom line. It's obviously a cost in the hundreds of thousands of dollars that we've had to incur. But at the same time, our American customers have been very supportive of dealing with a Canadian company that is a world-class leader in its field.

And just remind us, just before you go, I know when you walked into our studio, you were inspecting our door because in fact this is one of your doors isn't it that's correct yeah because what what kinds of doors do you all provide well in the cbc buildings both here and in toronto and across the country we provide acoustic doors that keep sound in the studios or and see keep sound from leaking outwards but this is a very specific type of application i think more commonly your listeners would encounter our doors in somewhere as ordinary as a high school auditorium we do hundreds of doors in new high schools across the country. Okay. Jack, I appreciate your time and perhaps we'll check back in at some point.

Thank you very much for this. Thanks for having me. Jack Schinder is the CEO of Ambico, a Canadian manufacturer of steel doors. He is in Ottawa. Now, Todd Stafford has also been feeling the impact of the tariff war on his business. He is the president of Northern Cables in Brockville, Ontario. They make commercial and industrial power cables. Todd, good morning to you.

Good morning, Rebecca. How has the trade war changed things for your business? Well, it's not a lot of fun. Four weeks ago today, we lost half our business. Half of your business, and what happened at that time? Well, the 338 tariffs came in, 50% tariff on cable going into the U.S., so that was an immediate stop. We changed production Saturday morning into all Canadian products.

And how does that make your business viable at this point then? Well, it's much more challenging trying to fill the capacity. I mean, that's what we've been spent the last four weeks on, is trying to gather in more Canadian business. We have 320 employees, so we're trying to keep everybody employed. We have not had to reduce employment yet. The retaliatory tariff several weeks later, that will help. You know, we're starting to see some help with that because there's, you know,

obviously less U.S. cable coming in. But the elephant in the room for us is the amount of Chinese cable coming into Canada. which far and away is our biggest issue. How are you managing that? I mean, what backstops are you currently using to get through this time when we don't even really know how long it will last? Well, and we don't. We're just trying to ramp up. There's certain areas of the Canadian market that are stronger,

so we're trying to make more industrial cable. And we're probably over-laboring some areas just to keep people here. and hopefully things, you know, improve. Like say the counter tariffs that Canada's put on, we're certainly getting inquiries from other customers that bought wire in the U.S. prior to that. So we're, I think optimistic is a strong word, but we're hopeful that, you know,

we'll get through it with the labor we have. And, you know, our U.S. customers obviously are not very happy. And we guys had to cut off a lot of U.S. suppliers as well through the retaliatory tariffs. How do those retaliatory tariffs on our end? Do they help you at all? Are more Canadians looking to buy your products versus other products? We're seeing that.

I mean, there's still a lot of inventory in the pipeline, but we're starting to get a lot more inquiries from people who maybe bought some of their product from us, now they're from U.S. manufacturers. So we think we're going to see a pickup on volume. We're fortunate that our supply chain was strictly U.S. and Kenway was a North American supply chain. And we're able to pivot and buy all the materials we need primarily in Canada. There's a couple small components that come from the U.S., but they're not in the retaliatory tariffs.

Is there any a point for you at all that you would need to move production south of the border? Is that something you've considered? Oh, we've definitely considered it. And, again, it was half our business. We've had some of the same customers on there for 25 years, and we know each other well and have a good relationship. It's just in this environment is a little unstable. I mean, we always kind of thought we would have a U.S. facility someday, some year, just hopefully not in a hostage situation like we're in right now.

And what does it take for you to move some or all of your production down south? That can be, I'm assuming that would be a costly endeavor. Oh, it's probably $100 million. It's not a small endeavor. So that's what it's not something we would just jump on. And with the tariff regime, you'd have to, start a complete start to finish factory you couldn't just finish send product down there and finish because of the way the tariffs are done but again it's it's kind of on our radar but it's more it's

isn't our destiny probably to have a u.s facility but our goal is to maintain the employment we have in brockville and and you know we think we can absorb that we've got there's some trade actions that are going the trade tribunal has found some already made a finding on on on on dumping Chinese cable on some products, which is helpful, and there's some other trade cases in the works as well. The nation is watching Alberta, and we know it. I'm Kathleen Petty, host of West of Center. Every week, I speak with the people shaping Alberta politics from pipelines to separation to help you understand what's going on here and why it matters to the entire country. Pull up a chair and join me, West of Center. Find us and follow.

wherever you get your podcasts. Is the Chinese dumping part of this equation a bigger concern for you than the trade war with the U.S.? Oh, it is because it's existential. I mean, they're bringing products into this country less than the cost of our raw materials. So it's not a matter of splitting capacity with different manufacturers domestically or trying to compete. The products that are coming in are just there is no way to compete with that. What do you want to see right now from the Canadian government? We hear a lot about the Carney government trying to diversify our trading partners right now.

Is that something that you would find to be helpful? Not particularly. I mean, the electrical system in North America is interconnected and it's common. We use the same plugs. We use the same wire. When you travel to Europe, you have to take an adapter with you. They have a different electrical system, different frequency. They're electrical codes.

The type of cable we make is not even permitted, and their building in their building codes in Europe or South America or anywhere else. What do you think it's going to take to get a deal with the U.S.? Well, two adults in a room, I think. Again, I don't know, you know, who's going to make the first call or who's going to, but something has to happen. And, you know, waiting to the midterms, I don't know if that's really a great strategy. But we really like to see some action.

And maybe there's action happening that's not in the forefront, but would really like to see some activity. And in the meantime, four weeks, you've lost half your business with the U.S. I mean, how much longer can you sustain what you're doing and finding these workarounds? Well, I think we haven't really seen the full effect of the retaliatory tariffs. So we think we can maintain our employment the way things are unfolding. I think we can probably maintain the employment we have. Obviously, we may delay some capital spending and some of the other projects we had planned until it's a little more of a stable outlook.

But our goal is to sustain what we have and be ready for when things improve. I mean, electrification and the need for modernized grid, I mean, those things are not going away. Okay. Todd Stafford, thank you for joining us. I appreciate it. Thank you, Rebecca. Todd Stafford is the president of Northern Cables in Brockville, Ontario. Dennis Darby is president and CEO of Canadian manufacturers and exporters. He's in Toronto. Dennis, good morning to you.

Good morning, Rebecca. You've said manufacturers are really in the eye of the storm in this tariff war. What do you make of what you just heard? Well, I think those are two really good examples, both for Ambico, who've had to find ways around the tariffs as well as northern cable. So what you're seeing is exactly typical Canadian manufacturer where a large percentage of their business has been, is been with the U.S., and where their supply chain, you know, the materials that they use tend to cross the border. That's been the, so that's been the sort of the way things have been for the last 50 years. And so with the call it the trade dispute, which is tariffs on both sides, well, those are, those tariffs affect manufactured goods by and large.

That's, you know, not many other things that are covered other than the things that we make. or that the U.S. makes. Yeah. You know, I mentioned at the beginning of all of this that the KPMG survey found 42% of the 275 Canadian company surveyed are considering moving production to the U.S. 77% of the businesses said they were considering a move, said they'd expect to make the transition within the next two years.

I understand your organization did a similar survey of its members. What did they tell you? Similar, just under 50% said they are looking to move production. to the states. Those are companies that are affected by the tariffs because the companies that are affected by the tariffs, the other, the first set of tariffs that Jack mentioned is section 232, which is steel, aluminum automobiles at copper and other metals, as well as the most recent tariffs that Todd talked about, which are the ones that applied, the U.S. applied just to Canada,

that called 338. So companies that are in those, you know, in that, you know, in that, you know, in the crosshairs of those tariffs, they're the ones that have said, yeah, we're looking. looking to find a way to move, to look at moving production. They're not saying they want to pull up stakes, but what they're saying is, can I find, as we heard, either partners or other supply sources or getting their inputs from somewhere other than the U.S. So it's a lot of work. And all that effort because of these tariffs, I think you heard it near the end there. Of course, while this is going on, well, we're having this spat with the U.S. is more than a spat.

In many cases, Chinese manufacturers are able to undercut everybody and get their products to market. So it's a very tough situation for manufacturers. You know, we've heard about these larger-scale companies moving south, at least part of their production. Stalant is moving its Jeep Compass production in 2025. Now wants to sell the Brampton plant, Crown Royal, shifting some of its bottling operations to the U.S., interfor moving its headquarters. What about small and medium-sized businesses adjusting to the tariffs and uncertainty? I mean, how often are we seeing companies of that size making these kinds of decisions as well?

So far we haven't, and part of it is, as you heard from your guests, you know, it's very expensive. You know, finding labor is very difficult. In the case of the multinationals, whether it's in any category, whether it's food and drink or or steel or automotive, they often have facilities in multiple countries. So, yes, there's some big companies have more, you know, more, more. more resources to be able to shift production when they need to. First, for Canadian-known companies operating, you know, it is a very expensive proposition. So that's why what we've seen, Rebecca, is we look at the numbers,

or month by month, what we've actually seen is a reduction in any investment. And that is actually troubling. From a manufacturing point of view in Canada, what we're seeing is that since the tariffs were applied, we've seen about a third drop in any spending on plant, equipment, or technology. you because what manufacturers are doing is because of, I think, the word Todd used, uncertainty, nobody wants to make a decision or make an investment decision. So that's what's happening. People are sitting on the sidelines trying to see if they can find a partner in the U.S.

or have an affiliate in the U.S. or find other supply chains in Canada. But at this point, because it's been so up and down, by and large, the sector is not making any sort of long-term moves. Yeah. You know, I think it's worth noting here that. But while there are industries that are affected, of course, and they're in a world of pain as a result of all of this. But, you know, the 80% I think of what is traded between Canada and the U.S. is still covered by Kuzma.

Is that true? Yes, certainly. If you're talking about oil and gas or minerals and many food products, those continue to go back and forth. Even this week, the president, you know, changed one of his 338 tariffs and took cement and road salt off the list because there are things. that they need. So despite what the U.S. administration sometimes says that they don't need any term candidate, they actually do. But for manufactured goods, that's the 15 to 20 percent of goods

that are affected by the tariffs. And so what do you want to see from the government to mitigate the manufacturing sector and the tariffs and to help with all of the uncertainty right now? Is there something more you'd like to see? Well, I mean, our advice to government, we've been in constant in contact with the, you know, with the Minister Jolie from Economic Development and Minister Champagne in finance, the tariff relief programs that they put in place, which are basically either liquidity supports, so cash support, in some cases, grants and loans, some support for, you know, changing your, you know, changing your customer base, even in even marketing in new areas. Those supports are really need to be quick.

What I mean by quick is they've announced about $7.5 billion in supports. Those have to be available. companies like the two you spoke to, if they need access to ready cash, it can't be something you can get in six months. They have to make it available soon. On the same, on the same token, or in the same way, if you look at the counter tariffs, regrettably, some of the products that the government of Canada is now terrifying from the U.S. are actually manufacturing inputs. And so there are remission programs that the government has set up, but those, again, can be kind of laborious. So we need to make sure that these supports for companies, you know,

is liquid but also efficient so they can get through the spirit. And hopefully we will have a, as your one guest said, they get back to the table. Okay. Dennis Darby, I appreciate your time for this. Thank you. Thank you. Dennis Darby is the president and CEO of Canadian manufacturers and exporters. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cbc.ca slash podcasts.