The path to surviving the trade war may be close to home. Step one: tear down interprovincial trade barriers, says Ottawa Board of Trade CEO Sueling Ching.
Businesses across Canada are battening down the hatches as U.S. President Donald Trump follows through on his promise to hail hefty tariffs down on his northern neighbours, but the path forward may be close to home.
Sueling Ching, president and CEO of the Ottawa Board of Trade, said developing new markets for Canadian businesses by tearing down interprovincial trade barriers is key for businesses to survive the trade war.
“Right now we have trade policies between provincial governments that limit the ability for Canadian companies to sell easily within our own country,” she said in a recent interview. “Why is it easier for me to buy wine from California than British Columbia?”
Eliminating trade barriers within Canada is not a novel idea. The Ottawa Board of Trade and other business leaders rallied hard to boost interprovincial trade during the COVID-19 pandemic, Ching said, and at the time, that would have injected $80 billion into the Canadian economy.
“Today? $200 billion,” she said. “The boost to our economy will offset the cost of tariffs, decrease the cost of goods for Canadians, and increase productivity. So get it done.”
Infrastructure investments should also be on the table to get goods across the country easily, she added, along with the government giving “transitional support” to the hardest hit businesses.
Along with encouraging the trade of goods between provinces, credentials for industries could also be standardized country-wide, she said, to “open up our access to our own talent.”
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Ching says we need to “move quickly on those things that we have delayed, that we should have done before.”
Tariffs on Canadian goods came into effect at 12:01 a.m. ET on March 4, placing a 10 per cent tariff on Canadian energy and a 25 per cent levy on all other imports. A report from the Canadian Chamber of Commerce said cities that rely heavily on energy exports, like Calgary and Saint John, will be most heavily hit, while the national capital region is expected to fare better than average.
As soon as rumours of a trade war began circulating, some Canadians began looking more closely at grocery store labels, opting for Canadian choices over American products. But the two economies remain closely linked, Ching said.
“We are encouraging people to buy Canadian, but not saying ‘don’t buy American,’” she said. “We are completely intertwined, right?”
Dealing with the U.S. administration may be challenging, she acknowledged, but Canada’s business community expects leaders to “continue to keep dialogue open, and keep looking for ways to work together.”
Canadian Prime Minister Justin Trudeau vowed to hit back with retaliatory tariffs on $30 billion worth of goods immediately, followed by “tariffs on the remaining $125 billion on American products in 21 days’ time,” according to a statement from the prime minister’s office.
The Ottawa Board of Trade and other chambers of commerce need to “inspire confidence” during these turbulent times, Ching said. The economic uncertainty posed by a trade war could cause people to be more conservative with their spending, which could itself trigger a recession.
“It’s already starting,” Ching said in an interview hours before Trump announced the tariffs were coming into effect. “We’re hearing stories of people driving decision-making. We’ve heard people deferring investments, stuff like that.”
Some Canadian government and business leaders are finding their U.S. counterparts don’t have the same understanding of the impact of tariffs on them, Ching says, on account of “the rhetoric they’re hearing coming from the Oval Office.”
Ching says the path forward includes the Canadian business ecosystem becoming “more ambitious,” and playing to win instead of just trying not to lose. Ottawa businesses in particular are part of a strong economic system, she said.
“For us at Board of Trade, what we saw during the pandemic was unprecedented, disproportionate consequences to the downtown core,” she said. “We’re going to continue to work that plan, build up our infrastructure, diversify and be more resilient.”
Ching says a line from a song in Lin Manuel Miranda’s award-winning play, Hamilton, resonates with her these days: “This is not a moment, it’s a movement. We can’t just say we hold our nose and get through the next week, or year. This is an opportunity to redefine how we operate moving forward, period.”
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