The 30-day reprieve on U.S. President Donald Trump’s tariffs is providing little relief for Anna Rubaj, the co-owner of Modern Komfort, a furniture and clothing retailer in Ottawa.
Rubaj feels it only delays what will be inevitable.
“It really does nothing. It causes more stress and uncertainty because we can’t properly plan. If we knew what was happening we could put in place an action plan,” said Rubaj, who operates stores in both Ontario and New Brunswick.
Rubaj and her staff are still trying to get more information from the Canada Border Services Agency and their furniture broker to understand how tariffs could impact them – even domestic suppliers import materials from the U.S.
To insulate themselves from the rising costs of U.S. tariffs, Rubaj says she will replace as much American and Chinese sourced furniture as she can with Canadian products.
Rubaj has been calling her domestic manufacturers to increase the store’s orders for sofas, dining room tables and accessories.
But even though there is a growing desire among Canadians to support homegrown companies, Rubaj says Canada’s furniture manufacturers are usually smaller and do not have the selection or same ability to mass produce as companies in the U.S. and in China.
Building up domestic manufacturing is something economists say Canada needs to do to ensure long-term economic security. Canada is good at exporting raw materials, but less so at turning those materials into products that consumers want to buy.
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Trade with the U.S. accounts for 67 per cent of Canada’s total GDP, while trade between provinces results in one third.
“If we were less dependent on the U.S. for manufactured goods in Canada, we’d be less vulnerable to these kind of trade threats,” says economist Hadrian Mertins-Kirkwood of the Canadian Centre for Policy Alternatives.
Trump’s tariff threats have drummed up talk on interprovincial trade as Canada’s leaders look for a safety net against an economically unfriendly neighbour to the south.
There are various barriers between provinces that hamper trade between them – typically in the form of how each regional government goes about purchasing and distributing goods. For example, the way one province designates certain kinds of alcohol for tax purposes might make it more difficult to sell those products across internal borders.
Ottawa and the provinces hammered out the Canadian Free Trade Agreement in 2017, which led to some provincial and federal barriers being softened or repealed to encourage interprovincial commerce.
Late last month, the prime minister chaired a meeting with premiers to discuss trade between their respective provinces as a means to sidestep the impact of steep U.S. tariffs.
With files from CTV’s Luca Caruso-Moro and The Canadian Press
