Manufacturer Information Hub – Trade & Tariffs

In response to the ongoing tariff threat, CME sent another letter to federal party leaders urging the federal government to act decisively on two fronts to help stabilize manufacturing businesses and protect jobs – accelerate and simplify the remissions process and create a short-term tariff relief program.

Read the Letter

On March 7, the government announced federal measures to support businesses and workers. Measures include:

• Launching the Trade Impact Program through Export Development Canada. The program will deploy $5 billion over two years, starting this year, to help exporters reach new markets for Canadian products and help companies navigate the economic challenges imposed by the tariffs, including losses from non-payment, currency fluctuations, lack of access to cash flows, and barriers to expansion.
• Making $500 million in favourably priced loans available through the Business Development Bank of Canada to support impacted businesses in sectors directly targeted by tariffs, as well as companies in their supply chains. Businesses will also benefit from advisory services in areas such as financial management and market diversification.
• Providing $1 billion in new financing through Farm Credit Canada to reduce financial barriers for the Canadian agriculture and food industry. This lending offer will help address cash flow challenges so that businesses can adjust to a new operating environment and continue to supply the high-quality agricultural and food products that Canadians rely on.
• Introducing temporary flexibilities to the EI Work-Sharing Program to increase access and maximum agreement duration. The Work-Sharing Program provides EI benefits to employees who agree with their employer to work reduced hours due to a decrease in business activity beyond their employer’s control to help retain employees and avoid layoffs.

In the days and weeks ahead, CME will continue advocating for strong, direct support for manufacturers that will be most affected by tariffs beyond the measures noted above.

In response to the U.S action, the federal government has implemented retaliatory measures. The first phase of Canada’s response includes tariffs on $30 billion in goods imported from the U.S., effective March 4. The list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.

The government also announced that, should the U.S. continue to apply unjustified tariffs on Canada, the government intends to impose additional countermeasures on $125 billion in imports from the U.S., drawing from a list of goods open for a 21-day comment period, which would bring the scope of countermeasures to a total of $155 billion worth of products. This list includes products such as electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses. Manufacturers can provide comments on the federal governments proposed tariff measures directly to Finance Canada: consultations@fin.gc.ca.

Canada’s Response to U.S. Tariffs

Finance Canada has outlined a discretionary remission process for Canadian importers that may be impacted by Canada’s retaliatory tariffs. The remission process applies to the first round of Canada’s retaliatory tariffs and all future tariffs. The federal government is considering requests for remission in these two instances: 1) Situations where goods used as inputs cannot be sourced domestically, either on a national or regional basis, or reasonably from non-U.S. sources; and 2) To address, on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy. Questions or remissions requests should be made directly to Finance Canada at remissions-remises@fin.gc.ca.

Requesting Remission of Tariffs That Apply to U.S. Goods

CME condemns the U.S. administration’s unjustified decision on Feb 10 to impose new tariffs on imports of steel and aluminium from Canada. This decision is yet another move that significantly undermines one of the most successful economic partnerships in the world.

The proposed tariff measures will harm consumers, businesses and workers on both sides of the border.

Read CME’s Reaction

Read the Proclamation

Read CME’s Statement

White House Bulletin / Fact Sheet

Canada’s Countermeasures

CME will continue to advocate for urgent policies that will safeguard Canadian businesses, workers and their families. We’re working with all levels of government to engage U.S. officials and push for an immediate rollback of these misguided and damaging tariffs and pursuing urgent relief by advocating for direct federal and provincial support for manufacturers and workers impacted by these measures. During past crises, including steel & aluminum tariffs, the COVID-19 pandemic and more, CME successfully advocated for relief measures, and we will do so again for you.

In response to the tariff threat, CME has sent a letter to federal party leaders urging the Canadian government to take decisive action to protect manufacturers and their workers. Our advice to government includes short-term measures to support manufacturers if tariffs are enacted and longer-term measures to strengthen the ability of the sector to compete in North America and abroad. Key asks are (1) Provide Tariff Relief: Implement a federal cost-coverage mechanism to offset the immediate impact of tariffs on Canadian exporters (2) Investment Incentives and Reshoring Support: Introduce incentives to encourage manufacturers to proceed with planned investments and reshore production to Canada, (3) Comprehensive Tax Reform: Undertake a broad-based review of Canada’s tax system with the objective of bolstering Canada’s investment competitiveness and to attract and retain talent, and (4) Cut Red-Tape: Launch an ambitious regulatory competitiveness agenda to reduce the ever increasing web of complex regulations that hinder investment, output and job creation.

Read the Letter + Recommendations

In December, CME consulted more than 300 manufacturers coast to coast on the impact of proposed tariffs to their business. Nine in ten Canadian manufacturers would face significant or very severe impacts on their business if the U.S. imposes tariffs on Canadian imports. Business impacts will worsen once tariffs are implemented with 48 per cent of manufacturers considering a hiring freeze or laying off workers, 46 per cent considering postponing or cancelling planned capital investments and 49 per cent considering shifting some production to the U.S.

Manufacturing Fast Facts

The manufacturing sector represents more than 10% of Canada’s gross domestic product.

Manufacturers directly support more than 1.7 million jobs in Canada.

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