{"id":858519,"date":"2026-08-15T02:48:23","date_gmt":"2026-08-15T02:48:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/858519\/"},"modified":"2026-08-15T02:48:23","modified_gmt":"2026-08-15T02:48:23","slug":"already-beset-by-tariffs-quebec-braces-for-another-big-trade-hit","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/858519\/","title":{"rendered":"Already beset by tariffs, Quebec braces for another big trade hit"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Workers assemble Ski-Doos at BRP’s production facility in Valcourt, Que., in May. The company was hit by Washington’s changes to Section 232 tariffs in April.Graham Hughes\/The Globe and Mail<\/p>\n

Quebec executives and union leaders are bracing for a tariff shock next week that they say would deliver an agonizing blow to business in the province, worsening prospects for what is already Canada\u2019s hardest-hit regional economy if the U.S. unleashes a new wave of trade action. <\/p>\n

The French-speaking province is a global power in aluminum and aerospace with renewable energy resources and several multinationals that are the envy of the world. But since U.S. President Donald Trump<\/a> was elected, it\u2019s also been the biggest Canadian casualty of his protectionist trade agenda.<\/p>\n

The situation could get much worse if the White House makes good on its threat to levy new 50-per-cent tariffs<\/a> on US$20-billion worth of Canadian exports as scheduled on Aug. 19, including machinery, textiles and furniture. High level negotiations are under way between the two countries but if no deal is reached, U.S. tariffs and Canada\u2019s retaliatory actions could trigger a painful fallout, the likes of which we haven\u2019t yet imagined.<\/p>\n

\u201cI\u2019m not sure that Canadians and Quebeckers are prepared for what\u2019s about to happen,\u201d senior diplomat Louise Blais said on a recent podcast organized by the Canadian International Council. She evoked the prospect of thousands of layoffs hitting smaller communities in particular. <\/p>\n

Quebec\u2019s official envoy for the review of the Canada-United States-Mexico Agreement, Ms. Blais said many of the companies she\u2019s been in contact with during recent consultations would be hit quickly, with no time to pivot to other customers. Without help, \u201cthose companies will be gone in a month or two,\u201d she said. <\/p>\n

The stakes are high in Quebec. Exporters in the province have already been walloped with 50-per-cent tariffs on primary steel and aluminum and products made from those metals, as well as a 10-per-cent levy on lumber and 25 per cent on upholstered wooden furniture. <\/p>\n

Trade negotiators revive proposed steel and aluminum exports quota in return for lower U.S. tariffs<\/a><\/p>\n

The U.S. then made changes to those Section 232 tariffs in April to apply duties on the entire value of articles made with steel, aluminum and copper rather than just the specific value of the metal content. That hit a new swath of exporters, including Sea-Doo and Ski-Doo maker BRP Inc. DOO-T<\/a><\/p>\n

In all, the province currently has an average effective tariff rate of 7 per cent for goods going to the U.S., the highest of all provinces. <\/p>\n

That rate would climb to about 11 per cent with the new 50-per-cent tariffs, which are being implemented under Section 338 of the Tariff Act of 1930, according to research published last month by National Bank economists, leaving Quebec heavily exposed as the only province above 10 per cent. The new tariffs would punch hardest in its dairy sector, as well as in manufacturing industries such as sporting equipment, ATB Financial said in a recent report. <\/p>\n

The knock-on effects to the Canadian political dynamic could be significant. Quebec is widely seen as the primary reason Prime Minister Mark Carney\u2019s government was elected last year, and its continuing support \u2013 both in the corridors of power and from average voters \u2013 will be crucial for Ottawa in the weeks and months ahead.<\/p>\n

Quebeckers themselves are also headed to the polls Oct. 5 to elect a new provincial government. Questions about trade and sovereignty are sure to play out in the campaign as leaders jostle to convince voters that their party is Quebec\u2019s strongest defender. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Quebec Premier Christine Fr\u00e9chette has said her government will not compromise on some issues affecting the province as Ottawa pursues a trade deal with the U.S.Jacques Boissinot\/The Canadian Press<\/p>\n

Quebec Premier Christine Fr\u00e9chette has already said she won\u2019t necessarily follow Ottawa\u2019s lead if it pledges to put American liquor back on store shelves as a concession to Washington, adding Quebec would need to see substantial improvements to the U.S. levies it already faces before making such a move. <\/p>\n

And while a trade deal could bring relief to some sectors, others could wind up frustrated. The U.S., for example, is seeking concessions on how dairy quotas are allocated in Canada \u2013 a politically sensitive issue in Quebec. <\/p>\n

Ms. Fr\u00e9chette said on a social media post Thursday her government would offer \u201cno compromise\u201d on the supply management framework for dairy, and none on culture or language either. <\/p>\n

She said if the worst happens, Ottawa will need to assume the costs of the agreement it negotiated, and offer \u201call the help necessary\u201d to protect Quebec jobs. Nine per cent of Quebec\u2019s exports, worth $7-billion a year, are affected by the new tariffs, according to the premier.<\/p>\n

What Trump\u2019s threatened 50% tariffs could mean for Canadian businesses, according to experts<\/a><\/p>\n

If Mr. Carney makes a deal that\u2019s unpalatable to certain provinces, other premiers could also break rank and throw what was a largely united Canadian side into disarray. In fact, Washington might be counting on exactly that. <\/p>\n

\u201cThe negotiations, and opposing ideas of premiers, does reveal the decentralized and sometimes dysfunctional nature of the Canadian federation,\u201d said Ian Lee, associate professor at Carleton University\u2019s Sprott School of Business. <\/p>\n

If we do not finalize a trade agreement, Canada will face a \u201ccatastrophic capital flight of businesses exiting to the U.S.\u201d with a concomitant steep decline in the Canadian dollar relative to the U.S. greenback, Prof. Lee argues. <\/p>\n

Quebec has lost 58,800 net jobs since the start of the year, according to research published this month by economists at Desjardins Group. Most of the decline has been concentrated in the construction and manufacturing sectors<\/a> \u2013 both industries heavily tied to exports. <\/p>\n

\u201cI\u2019ve never seen such little hope in the eyes of the people I represent,\u201d said Magali Picard, president of the province\u2019s powerful FTQ union, whose 600,000 members include a majority working in the private sector. She said uncertainty over Canada\u2019s relationship with the U.S. has people worrying about their jobs, adding to cost of living concerns that have dominated headlines.<\/p>\n

If there\u2019s a rupture in talks and the trade conflict escalates, \u201cit\u2019s going to be devastating,\u201d Ms. Picard said. \u201cIt\u2019s going to be costly for Quebeckers and for all Canadians. For me, it\u2019ll be like going on strike.\u201d <\/p>\n

The union boss, who\u2019s part of Mr. Carney\u2019s Advisory Committee on Canada-U.S. Economic Relations, said a comprehensive and durable trade pact between the two countries is urgent. She said workers can\u2019t continue to navigate the stresses that come with the uncertainty much longer. <\/p>\n

Business groups agree. <\/p>\n

\u201cWe\u2019re seeing a certain exasperation on the part of those leading small and medium enterprises,\u201d said Simon Gaudreault, chief economist and vice-president of research for the Canadian Federation of Independent Business. <\/p>\n

Ottawa is dealing with a situation that\u2019s difficult to read, he said. But there\u2019s also some dissatisfaction among business leaders with the way things have transpired since the White House first imposed tariffs on Canada, he added. <\/p>\n

Some government programs put in place have \u201cmissed their mark.\u201d Meanwhile, many of the things that would really help small businesses be more resilient, such as lower taxes, haven\u2019t transpired. <\/p>\n

U.S. levies already in place have slowed orders and shrunk profit margins for Quebec companies, prompting some of them to cut workers\u2019 hours or lay off staff outright in a bid to slash costs. Other businesses, such as South Shore Furniture, have simply shut down<\/a> as U.S. tariffs trigger shifting trade patterns they haven\u2019t been able to overcome. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

The packaging line at South Shore’s factory in Sainte-Croix, Que. The company shut down its operations after the U.S. imposed tariffs that have transformed the sector.Renaud Philippe\/The Globe and Mail<\/p>\n

Many executives are reluctant to speak to the media about their situation because they don\u2019t want to scare their employees or shareholders. Drawing attention to their companies could also cause reputational harm and push customers to competitors perceived as more stable. <\/p>\n

For others, too much is on the line to stay silent. <\/p>\n

The Section 232 levies alone \u201dtook us close to the break-even point,\u201d said Alain Ouzilleau, owner and president of Cabico & Co., a maker of cabinets based in Coaticook, Que. The company has already trimmed its payroll from 700 to 450 employees over the last 18 months.<\/p>\n

Canadian wood-product manufacturers are being squeezed and they\u2019re suffering, Mr. Ouzilleau said. While Section 232 tariffs restrict access to the U.S., global exporters displaced from that market are redirecting massive volumes of products into Canada, often at prices Canadian producers simply cannot compete against, he explained.<\/p>\n

Any new tariffs will only deepen the distress, Mr. Ouzilleau said. \u201cThis is no longer simply a trade issue,\u201d he said. \u201cIt is about the survival of Canadian manufacturing.\u201d <\/p>\n

He warns that the entire forest-products ecosystem and supply chain could collapse without more muscled intervention from Ottawa, echoing comments from other industry players. Given wood is one of Canada\u2019s key natural resources, \u201cit\u2019s frustrating\u201d that more attention hasn\u2019t been paid to the the sector, he said. <\/p>\n

The province\u2019s clothing industry has already undergone major shakeouts in past decades as a result of aggressive global competition and the end of textile quotas. Its manufacturers are now girding for more tariff pain as the new levies apply to Canadian products that were previously exempt under CUSMA. <\/p>\n

Greg Nicoghosian, vice-president of global sales at Pajar, a Montreal-based maker of winter apparel, said the company can deal with low single-digit import levies when it ships products to U.S. customers. Anything higher becomes problematic, even for its high-end boots coveted by customers, he said. <\/p>\n

\u201cIf you\u2019re at $495 a pair and now you need to retail at $595 or more, it\u2019s a different ball game,\u201d Mr. Nicoghosian said. \u201cWe will lose business if we increase our prices, so we have not increased prices… You swallow the pill and take the hit against your bottom line.\u201d <\/p>\n

Pajar maintains a factory in Montreal\u2019s Plateau neighbourhood where it makes the hand-crafted boots. The site, which has been operating for more than 50 years, is a rare example of domestic production in an industry that has shifted to Asia and other lower-cost pockets of the world. <\/p>\n

Tariffs will challenge the plant\u2019s economics, Mr. Nicoghosian acknowledges. But \u201cwe will tough it out,\u201d he vowed. \u201cWe\u2019re positive. We believe something good will come out of it eventually.\u201d <\/p>\n

Others are striking an equally optimistic tone, at least as it relates to Canada\u2019s unity and resolve. <\/p>\n

Former Quebec premier Jean Charest, a lawyer who also sits on Mr. Carney\u2019s Advisory Committee on Canada-U.S. Economic Relations, said he doesn\u2019t see any province going rogue and defying the federal government in its dealings with Washington. He said the Prime Minister is providing premiers and other key leaders with regular briefings and listening to their concerns, and no one expects a full resolution by Aug. 19. <\/p>\n

Then again, no one expected Mr. Trump to announce the Section 338 tariffs in July either. <\/p>\n

\u201cIf the Americans go ahead with the 338s, then they\u2019re crossing a line,\u201d Mr. Charest said. \u201cAnd that brings us to a new dynamic in the relationship where Canada will have to look at its options.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Workers assemble Ski-Doos at BRP’s production facility in Valcourt, Que., in May. The…\n","protected":false},"author":2,"featured_media":858520,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,5756],"class_list":["post-858519","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-yesapplenews"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/858519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=858519"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/858519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/858520"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=858519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=858519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=858519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}