The ever-changing tariff war started by the United States of America (U.S.), specifically President Donald Trump, is forcing industries and small business owners to think outside the box.
As tariffs threaten to increase the cost of many items typically sourced through U.S. distributors and manufacturers, local Muskoka businesses have begun to adjust tactics to protect themselves and their clients from huge cost hikes.
A Canada-first mentality has taken hold wherever possible, with other sources being explored when products aren’t available here.
Chris Litschko, CEO of Lakeland Holding Ltd., sent a letter to his customers explaining how they proactively adjusted their purchasing strategy through the implementation of a Canadian Pride Purchasing Policy.
Doppler spoke to Litschko after the letter came out and he discussed Lakeland’s commitment to purchase local, provincial, and Canadian products and services now and into the future.
“We do have all the resources, all the people we really need, and the expertise here in Canada,” he says. “We’re just putting a bigger emphasis on (using Canadian products and services). We’re putting KPIs, key performance indicators, in place. We’re watching what we buy, where we buy it from, how much it is.”
He explains that though they must continue to be fiscally and financially responsible, they aren’t going to hedge if a Canadian product is a little more expensive than one made south of the border.
“For instance, we had a transformer last summer that blew on us – a substation transformer – it’s got about a $1.5 million repair,” he says. “And we got four bids from the US and one from Quebec and it’s going to Quebec. We’re going to keep in Canada.”
They are now looking at workarounds for getting their EV stations past tariffs. They have 40 installed with another 15 to 17 still needing to be added. The Korean built EV stations have been travelling through a distributor in the U.S., meaning they’ll now be tariffed before coming into Canada.
“So, now we’re working with the company to get them directly,” says Litschko. “And we’re looking in Canada to see who can build these EV stations.”
Algonquin Outfitters have been taking steps internally to get ahead of any tariff issues explains Controller Mark Sinnige.
“Where we usually source things from the United States, we’re trying to source as much as we can from other places,” he says. |Especially sourcing product within Canada.”
In cases where the quality of the product could not be sourced elsewhere, Algonquin Outfitters pre-ordered extra stock before the tariffs came into effect.
As well, they will not be increasing prices on the rental and outfitting side. They will be keeping their 2024 rates for as long as possible. Sinnige says they are trying to keep those prices from climbing up, but recommends that individuals and families book early to ensure they get those prices.
“We did do the timing of product and brought some stuff in from the U.S. early because there are certain categories where there weren’t any realistic alternatives product-wise for us,” says Sinnige. “At least not with the quality that we’re looking for. Where we couldn’t find alternatives to maintain the quality, we pulled product from the states early before the tariffs hit.”
At Minds Alive Toys, they have similar but still relatively different situations to Lakeland and Algonquin Outfitters.
Jeff Weersink, who owns the toy store with wife Janet, says 85 per cent of the toy market product is made in China or southeast Asia. He says the little bit of product made in the U.S. was already too expensive to carry due to the exchange rate.
What is an issue they are navigating is the fact that several years ago the toy companies consolidated their Canadian and U.S. warehouses into North American distribution centres based in the U.S.
“The market has changed, so they closed down a lot of warehouses in Canada and have a North American distribution,” explains Weersink. “So, now products come from overseas into the US and then get spread over the rest of North America. That impacts us now because those imports from China, they used to go to Canada directly, now they go through the states, so they’ll be subject to tariffs.”
He says that most suppliers are savvy enough to know it doesn’t take much to fill a container and ship directly to a third-party warehouse in Canada. Though it does make the individual unit cost a tiny bit more, it’s a fraction of what would be charged if it had to go through the new U.S. tariffs.
These slight increases are much more manageable for the businesses and the consumers.
“There are some fairly big brands – American companies – who import from China into the US. And the only way we can get them is through the US supplier or manufacturer,” says Weersink. “Those are the companies we really have to evaluate what we’re going to do in the future. For now, we’ve stopped buying from most of them.”
This is a situation where they are stuck between a rock and a hard place, but in other cases, they can find European products that are the same—or better—than the U.S. version.
“We have a fairly big puzzle supplier,” he says. “They’re a Canadian company. The puzzles are printed in Canada and then shipped to the Midwest US where they are then stamped into puzzles and then shipped back up again. But, in that process, the product is now going to be subject to tariffs. That company is now going to ship the puzzles to be stamped in Europe and then brought back. Again, they’re going to be more expensive, but not as expensive as being subjected to the tariffs.”
The good news is that one very popular Minds Alive product, which appeals to people from age three to 100, is not going to suffer from the US tariff situation (at least not yet).
“We are lucky,” says Weersink. “North America Lego is thankfully made in Mexico, so that’s not tariffed. It gets shipped directly to Canada.”
The other good news is that Canadian companies are finding ways to trump the tariffs, whether it’s working with businesses at home or abroad.
Don’t miss out on Doppler!
Sign up here to receive our email digest with links to our most recent stories.
Local news in your inbox so you don’t miss anything!
Click here to support local news
I am so impressed with all the stores I go to how they have labelled Canadian product etc. Also buying local products is so much better for all of us. We will all make Canada a better and more productive country. 🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦🇨🇦