A London-area municipality is feeling the toll of tariffs after the cost of a snowplow ordered before the trade war started by U.S. President Donald Trump jumped almost $75,000.
Central Elgin, a rural municipality bordering St. Thomas, had allocated $370,000 in its 2025 budget to replace an aging plow truck in its fleet for delivery next July. But the cost of the tandem-axle snowplow jumped due to “continuous changes in trade agreements and tariffs,” a staff report said.
The municipality prioritizes Canada-made products where possible, but Central Elgin Mayor Andrew Sloan said specialized equipment often requires imported components. He called the roughly $74,500 price hike a clear example of how global trade policies can have real, direct impacts on municipal budgets.
The truck’s body is built in Canada but uses American and Mexican parts, Sloan said. The snowplow is made in Mexico but requires components from Canada and the U.S. that now face 25 per cent tariffs, illustrating the interconnectedness of trade among the three countries.
“I think it’s underreported, because I didn’t think about (tariffs) as much,” Sloan said before a recent council meeting.
“Sure, we’re not buying hundreds of $380,000 trucks, but to serve the residents of Central Elgin, I need to have hardware. And the cost of . . . that is all of a sudden, in this case, 25 per cent more.”
Council debated exploring alternatives, such as delaying the snowplow purchase, exploring other possibilities, or continuing to maintain the current aging unit – which has cost $80,000 over the last four years.
Ultimately, council voted 4-3 to buy the new truck.
Tariffs can have a major budget impact, especially on smaller municipalities, Sloan said. Central Elgin has a $17-million budget, so every $170,000 in extra costs represents a 1 per cent property tax hike.
“Luckily, we have a very good situation financially right now, because of the St. Thomas deal,” Sloan said. “Costs for all these things are a lot higher when you have a truck (price increase by $75,000. . . . The money’s) got to come from somewhere.”
The deal he referred to was last year’s settlement after St. Thomas annexed 485 hectares (1,200 acres) of Central Elgin land in 2023 to make way for Volkswagen’s massive $7-billion electric vehicle battery plant.
The agreement gave the rural municipality $15 million – two-thirds up front, the rest over five years – plus the ability to tap into city wastewater processing and the potential to develop 166 hectares (410 acres) of former St. Thomas psychiatric hospital lands.
But it’s not just Central Elgin that could see prices increase as a result of tariffs.
Andreas Schotter is an international business professor at Western University’s Ivey business school. Schotter called tariffs not just “an abstract trade dispute,” but a direct strike on municipal governments’ bottom lines.
“The real danger for rural municipalities is the compounding effect: higher costs for goods and services they need to buy, paired with slower revenue growth from a stressed local economy,” he said in an email.
Local governments buy a lot of goods, such as fire trucks, snow plows and road salt, from U.S. suppliers and tariffs are driving up prices.
“That means councils either have to cut back on what they buy, postpone planned upgrades, or find more revenue – often through higher local taxes or fees,” Schotter said.
David Creery, Woodstock’s chief administrator, said the Oxford County city of about 50,000 hasn’t yet felt the impact of tariffs.
“There are some things that we find it difficult to source domestically, let alone locally, and it’ll be those things where you really don’t have much of a choice,” he said.
Woodstock has some pricey orders coming up in its next budget, like artificial turf at one of its sports complexes – a largely U.S.-supplied product – but Creery said the city would explore alternatives for the potential $1-million-plus project.
“We’ll do what we can to try and avoid (tariffs) as much as possible,” Creery said.
