Housing, tourism, tech — Ottawa is worried but undaunted as the city waits for the dust to settle on the trade wars.
Caught in the crossfire of U.S. on-again, off-again tariffs and Canadian counter-tariffs, it’s understandable if the average Ottawan wants to cry, “The sky is falling! The sky is falling!”
It’s especially true when the instigator of this trade war, U.S. President Donald Trump, often acts, if I may continue the barnyard analogy, about as predictably as a chicken with its head cut off.
But is the sky really falling?
There’s no doubt that it’s darkening, but we’ll manage. That, at least, is largely the sentiment of local business owners, leaders, industry reps, politicians and academics I’ve spoken to this week.
Brian Bruley, general manager of Preston Hardware, told me customers have been asking about Canadian goods in his store, but he doesn’t think the long-term impact of tariff threats will be disastrous. “Everybody wants to see what shakes out first,” he says.
“There might be a little bit of pain,” he adds, “but in the long run, I see us surviving and everybody thriving. I’m not as afraid as a lot of people are.”
Good to hear. Of course, the real issue isn’t price increases from tariffs, say those I spoke with — although tariffs and counter-tariffs almost inevitably lead to this — but the ongoing economic volatility the tariffs present.
“One of the worst things for business is not the thought of losing money,” says Ian Lee, associate professor at Carleton University’s Sprott School of Business. “The biggest threat to business is uncertainty.” That uncertainty brings a chill to both consumer and investor confidence, slowing the economy.
Evening Update
Housing, for example, is one of Ottawa’s major concerns. Jason Burggraaf, executive director of the Greater Ottawa Home Builders’ Association, says the impact tariffs will have on the cost and availability of construction materials will make it more difficult for builders to get funding, especially for high-rises or subdivisions. New housing sales will likely slow, which in turn will see housing starts stall.
“We’re trying to get back to 12,000 to 15,000 starts per year,” he says, “because that’s what’s needed to fulfil the demand for Ottawa’s population growth. Right now we’re below two-thirds of that, and it seems likely (the recovery) is going to drag out for the next half year because of the tariffs and the uncertainty.”
Even smaller projects like home renovations may be delayed as consumers wait for the dust to settle.
Next, what about tourism? Ottawa Tourism CEO Michael Crockatt takes a calm, wait-and-see attitude. Ninety per cent of Ottawa estimated 10 million annual visitors, he notes, are Canadians, many more of whom may choose to travel within Canada if our dollar, as it’s expected to, falters further.
“It’s an unknown,” he says of tariff effects, adding it’s still important to attract U.S. tourists. “But we also have that obligation to look at investing in other diverse markets, too.” He cites Air France’s direct flight from Paris to Ottawa and Air Canada’s coming direct flight from London’s Heathrow airport as examples.
And the tech sector? It’s also an important economic driver locally. Liberal MP and cabinet minister Jenna Sudds, whose Kanata-Carleton riding includes the Kanata North high-tech park, says that while her constituents are concerned, she’s been impressed by Kanata residents’ pro-sovereignty rallying cries. She’s heard from companies, she says, that are pausing to rethink how they do business, especially with the U.S. “There are absolutely fears when it comes to repercussions, both with respect to employment and investment. The economic uncertainty is very real.
“It’s hard to predict what today looks like, let alone next month, so I think we need to be prepared. Hopefully, this is short-term pain.”
Companies are recognizing the need to look for alternative suppliers and markets, either here in Canada or in other “like-minded” countries, she notes.
Just as individual Canadians are embracing the viral “elbows up” meme that is encouraging consumers to better support Canadian-made products, the burgeoning trade war is being framed by some Ottawa business leaders as an opportunity to seek out Canadian suppliers and expand their customer bases beyond the U.S.
“I’m seeing a level of unity in the business community and across the country that’s unprecedented,” says Invest Ottawa president and CEO Sonya Shorey, a self-described “glass-half-full” person.
After touching base with local businesses in recent weeks — including a roundtable discussion with 28 companies responsible for more than 8,000 local jobs — Shorey now has a grocery list of recommendations to help Canadians, and Ottawans, get through this war.
Among them is taking advantage of our weaker dollar to attract businesses beyond the U.S.; promoting Ottawa’s tech sector to countries other than the U.S.; communicating with U.S. businesses the mutual risks of tariff escalation; and partnering with Ottawa’s four colleges and universities and 65 research institutes to attract and develop business and tech talent. There’s even a recommendation to improve regulations on product labelling, which I know would help local consumers more easily determine what is and isn’t Canadian-made.
These ideas would better counter U.S. tariffs than would counter-tariffs. They would also go a long way to addressing the current uncertainty stemming from Trump’s headless-chicken policies. His unpredictability should also tell us that keeping our elbows up, while brave and patriotic, is only part of the answer. Keep calm, buy Canadian and be open to changes that might make Ottawa a better, stronger home.
And I’d suggest that we strap on our helmets, too, just in case.
