Trade war worries remain

By Sandi Krasowski
Local Journalism Initiative Reporter
The Chronicle-Journal

While a 30-day postponement of U.S. tariffs on Canadian goods has paused an escalating trade war, there is still concern in Northwestern Ontario.

Thunder Bay-Atikokan MPP Kevin Holland said the proposed 25 per cent tariffs could have a devastating effect on the Canadian forestry industry.

“I’m concerned,” Holland said. “We’re at almost 15 per cent tariffs on softwood lumber and by example, there’s talk that in the Quarter Three of 2025, the U.S. is looking at doubling that. Then put another 25 per cent on and we’re going to have 55 per cent tariffs on softwood lumber.”

Holland said a strong, strategic approach is needed.

“We’ve watched California burn and the devastating impacts of hurricanes. They need Canadian lumber and we need to really make sure that we’re communicating that message of the importance of the partnership and how valuable it is for both countries.”

Thunder Bay Chamber of Commerce president Charla Robinson says it’s not just about forestry.

“Whether it’s food products, health products, or manufactured items, we’ve got many small businesses that also do some exporting to the U.S., and they’re concerned,” she said. “The retaliatory tariffs that the Canadian government is imposing will also have an increased cost that will likely be passed on to the consumer.”

Economist Livio Di Matteo says at this point it is really difficult to assess the impact of the proposed tariff.

“A 25 per cent across-the-board tariff will result in significant economic effects, including GDP and employment losses,” Di Matteo said. “In Northern Ontario, the resource sector will particularly be affected — forestry and mining — however, there will be some insulation on employment in the short run due to the large public sector employment in the region.”

While parts of southern Ontario tied to auto manufacturing could see employment drops of up to three per cent, Di Matteo said most of Northern Ontario is likely to be closer to a one per cent drop in employment.

“In a city like Thunder Bay, you might be looking at something like 600 to 1,000 jobs,” he said.

At the Port of Thunder Bay, CEO Chris Heikkinen said the vast majority of what they handle goes overseas. U.S.-bound cargo is about five per cent of the total volume shipped through the port.

“There is the potential for opportunity to come out of this,” Heikkinen said. “If the tariffs halt a grain moving by rail into the U.S., then they’re going to be looking for other markets to ship that grain to.”

He said we may gain shipments of grain destined for Europe that originally would have been railed into the U.S.

“We don’t know how it’s going to play out, but those are some of the things we’re monitoring.”

Thunder Bay-Superior North MP Patty Hajdu said some leaders in Northwestern Ontario are quite concerned.

“Northern Ontario is home to thousands of small- and medium-sized businesses with eight per cent of them exporting goods primarily to the U.S.”

In 2022, Northern Ontario exported $11 billion in goods and services to Americans, a 45-per-cent increase from the previous year.

“There’s an opportunity in this to grow our trade with other countries. Canada needs to sell our wheat, grains and the manufacturing excellence that we have in this country,” she said. “We do that by working together, by ensuring that our country is well poised to pull together, not to fracture apart. Canadians are showing that they can’t be divided.”

Hajdu said small communities who are relying on industries like mining or forestry will now be very vulnerable.

“If there’s a downturn and layoffs, it can deeply ripple throughout the entire economy,” she said, adding Canada is not going to take this lying down and this is an all-hands-on-deck moment.