Quebec manufacturers say Ottawa should redistribute tariff money to businesses

Quebec's manufacturing sector would like any money generated from tariffs to be distributed to businesses that will be affected by Trump tariffs. (Christinne Muschi / The Canadian Press) (Christinne Muschi/The Canadian Press)

If Canada responds to Donald Trump’s tariffs with tariffs of its own, the money raised should be used to help businesses that will suffer the repercussions of a possible trade war, argues Quebec’s manufacturing sector.

“If the federal government imposes tariffs, it will collect money, and we expect all the money collected to be reinvested directly in the sectors targeted by the tariffs,” said Quebec manufacturers and exporters (MEQ) president and CEO Julie White. “It’s important to us that this money doesn’t go into the consolidated fund in Ottawa.”

Foreign Affairs Minister Mélanie Joly said on Friday that Canada would be ready to retaliate immediately if President-elect Donald Trump goes ahead with his threat to impose 25 per cent tariffs on Canadian goods.

The Globe and Mail reported earlier on Friday that Ottawa could consider imposing a first round of tariffs on the equivalent of nearly $37 billion worth of US goods.

White acknowledges that the federal government “would have no choice” but to retaliate against any tariffs imposed by the Trump administration. It has to be specific products for which there may be alternatives in Canada.

The representative of Quebec manufacturers will be watching closely to ensure that federal decisions are not taken to the detriment of Quebec’s strategic industries, such as aerospace and aluminium.

“The government seems to want to be fair in this area, but our major economic sectors in Quebec must not be made to pay for other provinces,” she warns. “That’s clear to me.”

White was reassured to hear that the Legault government was ready to come to the aid of companies affected by the Trump administration’s tariffs. She hopes that Quebec will intervene quickly and be “agile”: “We’re in an exceptional situation. We can’t wait weeks or months.”

Among the assistance that could be considered, White mentions tax credits to increase productivity and innovation, as well as a moderation of electricity rate increases for businesses.

A shock wave

Trump’s threats have caused great concern in Canadian business circles.

The Republican candidate, who officially takes office on Jan. 20, is threatening to impose tariffs of 25 per cent on Canadian exports to the United States. He has even gone so far as to talk of annexing Canada under the threat of economic retaliation.

If Trump goes ahead with his threats, it could create “a real shockwave” for Quebec’s manufacturing sector.

“We’re currently in a spiral of uncertainty where everyone is trying to find the best options and reassure suppliers and employees,” said the MEQ director. “It’s difficult for everyone at the moment.”

Manufacturing companies are already preparing for a trade confrontation, which seems inevitable. The vast majority, 90 per cent, anticipate that US tariffs will have a major impact on their business, according to a survey of MEQ members carried out in December.

The spectre of tariffs is forcing many of them to consider relocating production, putting investment plans on hold, putting the brakes on recruitment and even reducing the number of employees.

White is concerned about the long-term consequences of a pause in the business investment needed to boost productivity.

“It could be very worrying for our small manufacturers in the medium to long term,” she said.

This report by The Canadian Press was first published in French on Jan. 17, 2025.