Canadian business owners have been increasingly eyeing relocation or expansion to the US, with the recent trade war being just one of many factors. President Donald Trump has put Canada on notice for a 25% tariff imposed on all goods coming into the US from its northern neighbour, citing a weak and “porous” border that has allowed a continuous stream of drug trafficking and illegal immigration for far too long. The tariffs were meant to go into effect February 1, but have been paused until March. Prime Minister Justin Trudeau in an 11th hour deal with the president agreed to install a “fentanyl czar,” of which former RCMP deputy commissioner and intelligence advisor to Trudeau, Kevin Brosseau has been appointed, as well as implement a list of measures designed to increase border security. Meanwhile, Trump has imposed a universal 25% tariff on all steel and aluminum products entering the US, which he activated Monday, and on Thursday gave a universal warning that the US would impose reciprocal tariffs on any nation that tariffs the United States. However, business and economics agencies tell the Western Standard the moving-to-the-US trend became evident long before there was any talk of these tariffs. .Smith says she wants to make Alberta most business-friendly Canadian jurisdiction .Inter-provincial trade barriers and the Trudeau Liberals’ ever-increasing bureaucracy, red tape, climate policies and staggering taxes over the last nine years have turned the prospect of doing business in Canada into an unattractive, and sometimes unviable, option. A report released January 29 by Canadian accounting agency KPMG based on research collected from 250 business leaders representing multiple industries indicates 48% “plan to shift their investments to the US and set up operations or production” in America.Further, 90% of business leaders say “it’s time to eliminate inter-provincial trade barriers” and 85% say “the federal and provincial governments must reduce business taxes and reform the tax system.”.UPDATED: Trump announces reciprocal tariffs on all nations that tariff the US.President and CEO of the Canadian Federation of Independent Business (CFIB) Dan Kelly told the Western Standard even prior to the tariff issue, there was an increasing number of Canadian business owners "that are frustrated with Canada's high tax environment and lack of approvals over getting anything done" that were looking at expanding in the United States as a result of Canada's "declining competitive position.” Kelly says Canada’s business community has fallen to the bottom of the federal government's list of priorities “for some time now.” “There were businesses that were already looking at greener pastures to the US [prior to the tariff threat]. So this is a pre-existing condition where businesses were starting to think about doing business elsewhere."Now with the tariff issue, "more business owners may start to explore this or take this more seriously, because they don't want to be caught on the outside of a tariff wall in accessing the US market,” said Kelly. Some CFIB small business members already sell 90% of their products to the American market. "So yes, we are certainly hearing from more business owners that are contemplating this,” said Kelly. .Trudeau Liberals' COVID lockdowns sank 120K Canadian small businesses .Kelly added there is a certain mentality in the US that is more conducive to business than in Canada. “The welcome mat that is often rolled out in US markets is quite different than the experience in Canada. And American governments are hungry to have Canadian businesses open up shop there and green light things quickly, whereas in Canada, you’re just hit with your 1000th permission form to sign to get anything to happen.”Businesses often sit on the planning stage “for a decade before” they get approval. He also mentioned the “steadily increasing taxes” — not counting the April 1 carbon tax hike and Canada’s planned liquor tax increase.“Both of those are obviously in the wrong direction,” said Kelly. .LET'S MAKE A DEAL: Smith optimistic Canada-US trade problems can be resolved .The Business Council of Alberta (BCA) VP of Policy and Chief Economist Mike Holden agrees the trend has “been around for a little while now” and is “not necessarily tied exclusively to this tariff uncertainty — but it's certainly being magnified by it.” For example, the BCA has seen some Alberta oil and gas companies shift more of their resources into the United States, among others. “The reason why they would is fairly straightforward,” said Holden. He told the Western Standard the big issue is, where do companies make their next investment?” “And that's something we've definitely been seeing across a range of sectors.” “If you have a tax advantage in the US, and then you see this kind of uncertainty around tariffs and whether or not you can actually access the US market from Canada — with the combination of those things, you can erode the case for why you decide to put that plant in Canada in the first place.”.UPDATED: Trump gives Canada a 30-day pause on 25% tariff threat.Holden says it’s the lower tax burden in the US and the fact that “a lot of Canadian companies have difficulty with the length of time it takes to get building permits.”“It just takes way longer to build anything in Canada,” he said, adding he had personally heard from business owners who have been romanced by American governors to move to the US. The governor "flies them down, meets them on the tarmac of the airport, shows them an empty factory that they're willing to refurbish, gives them a property tax holiday and a house, and says, ‘Hey, want to move your business to [our state]?”’“So it’s the combination of they want you there, it's a much larger market, even with any trade-related uncertainty and a lower lower tax rate," said Holden. Holden also put emphasis on Canada’s climate policies. “If you're in oil and gas, you know different climate-related regulations can increase the cost of doing business in Canada as well," he said. He pointed out that the message Trudeau’s 2016 pledge to meet the Paris Accord targets — net zero emissions by 20250 — sent to the oil and gas sector is that “additional investment production and expansion are not necessarily welcome.” .Bernier calls for Trump trade deal, announces Beauce candidacy .Holden also commented on Canada’s interprovincial trade barriers, which have been in place long before Trump’s tariffs threat — but the trade war has brought them under the microscope. The trade barriers are in place because each province makes their own regulations and have technical and administrative differences, such as parameters around the sale of alcohol, certification for skilled workers, weight limits or tire regulations for freight trucks on highways and the transport of hazardous chemicals. “[The provinces] are not necessarily interested in removing those barriers, because they have their own financial costs, even if it's better for the economy as a whole," he said. Holden said he’s “definitely heard before from companies that it's easier to ship things north-south (Canada-US) than it is east-west (inter-provincial).”.Trudeau defends decision to keep Parliament on break as trade war escalates .Shane Mackenzie, Canadian Chamber of Commerce (CCC) VP Media and Stakeholder Communications said he’s focused on the issue of inter-provincial trade — which the CCC has been drawing attention to “for many decades.” He said that the CCC, and its provincial affiliates, have proposed the All in One Canada plan to each premier, which would deliver on the promise of internal trade, build infrastructure and reduce red tape and high taxation. “Everybody was on board basically saying, ‘We're ready to do our part on internal trade. We're ready to take the talk and turn it into action,’” Mackenzie told the Western Standard. “Obviously it's a time that we should be looking at reducing red tape so that businesses can build up domestic industries.”In addition to the internal trade issue, the CCC has encountered many questions on Canada’s taxation measures, “whether it was capital gains or digital sales tax.”“This is really a moment for all-hands-on-deck to reflect upon, how are we going to be competitive in a tax environment where Trump is lowering the corporate tax rate and a number of other things when we don't have a taxation environment that is as competitive.”“Competitiveness, that's been a discussion that we've been having for a long time where there's been a lot of concern.”.UPDATED: Appeals court hears Trudeau's lawyers fight unlawful Emergencies Act decision.Mackenzie noted Canada could make investment “so much more friendly and attractive” — but internal trade often doesn't make us as attractive as a market.” He explained even if Canadians, or even Americans, were to invest in Canada, it becomes a challenge to do business across provinces. “It's easier to sell back into the states,” he said. Mackenzie also discussed government red tape and high taxes. “Frankly, the red tape is stuff that they can get rid of tomorrow,” he said. “Parliament should not be in [prorogation] right now. They should be back and sitting.”“It's not about political jockeying. There are trade infrastructure investments that they can make. There are measures that they can take federally to reduce red tape at that level and to help encourage the provinces to actually achieve internal trade.”“Parliament needs to be sitting and frankly, parties need to put [everything else] aside and realize this is a moment of national importance.”
Canadian business owners have been increasingly eyeing relocation or expansion to the US, with the recent trade war being just one of many factors. President Donald Trump has put Canada on notice for a 25% tariff imposed on all goods coming into the US from its northern neighbour, citing a weak and “porous” border that has allowed a continuous stream of drug trafficking and illegal immigration for far too long. The tariffs were meant to go into effect February 1, but have been paused until March. Prime Minister Justin Trudeau in an 11th hour deal with the president agreed to install a “fentanyl czar,” of which former RCMP deputy commissioner and intelligence advisor to Trudeau, Kevin Brosseau has been appointed, as well as implement a list of measures designed to increase border security. Meanwhile, Trump has imposed a universal 25% tariff on all steel and aluminum products entering the US, which he activated Monday, and on Thursday gave a universal warning that the US would impose reciprocal tariffs on any nation that tariffs the United States. However, business and economics agencies tell the Western Standard the moving-to-the-US trend became evident long before there was any talk of these tariffs. .Smith says she wants to make Alberta most business-friendly Canadian jurisdiction .Inter-provincial trade barriers and the Trudeau Liberals’ ever-increasing bureaucracy, red tape, climate policies and staggering taxes over the last nine years have turned the prospect of doing business in Canada into an unattractive, and sometimes unviable, option. A report released January 29 by Canadian accounting agency KPMG based on research collected from 250 business leaders representing multiple industries indicates 48% “plan to shift their investments to the US and set up operations or production” in America.Further, 90% of business leaders say “it’s time to eliminate inter-provincial trade barriers” and 85% say “the federal and provincial governments must reduce business taxes and reform the tax system.”.UPDATED: Trump announces reciprocal tariffs on all nations that tariff the US.President and CEO of the Canadian Federation of Independent Business (CFIB) Dan Kelly told the Western Standard even prior to the tariff issue, there was an increasing number of Canadian business owners "that are frustrated with Canada's high tax environment and lack of approvals over getting anything done" that were looking at expanding in the United States as a result of Canada's "declining competitive position.” Kelly says Canada’s business community has fallen to the bottom of the federal government's list of priorities “for some time now.” “There were businesses that were already looking at greener pastures to the US [prior to the tariff threat]. So this is a pre-existing condition where businesses were starting to think about doing business elsewhere."Now with the tariff issue, "more business owners may start to explore this or take this more seriously, because they don't want to be caught on the outside of a tariff wall in accessing the US market,” said Kelly. Some CFIB small business members already sell 90% of their products to the American market. "So yes, we are certainly hearing from more business owners that are contemplating this,” said Kelly. .Trudeau Liberals' COVID lockdowns sank 120K Canadian small businesses .Kelly added there is a certain mentality in the US that is more conducive to business than in Canada. “The welcome mat that is often rolled out in US markets is quite different than the experience in Canada. And American governments are hungry to have Canadian businesses open up shop there and green light things quickly, whereas in Canada, you’re just hit with your 1000th permission form to sign to get anything to happen.”Businesses often sit on the planning stage “for a decade before” they get approval. He also mentioned the “steadily increasing taxes” — not counting the April 1 carbon tax hike and Canada’s planned liquor tax increase.“Both of those are obviously in the wrong direction,” said Kelly. .LET'S MAKE A DEAL: Smith optimistic Canada-US trade problems can be resolved .The Business Council of Alberta (BCA) VP of Policy and Chief Economist Mike Holden agrees the trend has “been around for a little while now” and is “not necessarily tied exclusively to this tariff uncertainty — but it's certainly being magnified by it.” For example, the BCA has seen some Alberta oil and gas companies shift more of their resources into the United States, among others. “The reason why they would is fairly straightforward,” said Holden. He told the Western Standard the big issue is, where do companies make their next investment?” “And that's something we've definitely been seeing across a range of sectors.” “If you have a tax advantage in the US, and then you see this kind of uncertainty around tariffs and whether or not you can actually access the US market from Canada — with the combination of those things, you can erode the case for why you decide to put that plant in Canada in the first place.”.UPDATED: Trump gives Canada a 30-day pause on 25% tariff threat.Holden says it’s the lower tax burden in the US and the fact that “a lot of Canadian companies have difficulty with the length of time it takes to get building permits.”“It just takes way longer to build anything in Canada,” he said, adding he had personally heard from business owners who have been romanced by American governors to move to the US. The governor "flies them down, meets them on the tarmac of the airport, shows them an empty factory that they're willing to refurbish, gives them a property tax holiday and a house, and says, ‘Hey, want to move your business to [our state]?”’“So it’s the combination of they want you there, it's a much larger market, even with any trade-related uncertainty and a lower lower tax rate," said Holden. Holden also put emphasis on Canada’s climate policies. “If you're in oil and gas, you know different climate-related regulations can increase the cost of doing business in Canada as well," he said. He pointed out that the message Trudeau’s 2016 pledge to meet the Paris Accord targets — net zero emissions by 20250 — sent to the oil and gas sector is that “additional investment production and expansion are not necessarily welcome.” .Bernier calls for Trump trade deal, announces Beauce candidacy .Holden also commented on Canada’s interprovincial trade barriers, which have been in place long before Trump’s tariffs threat — but the trade war has brought them under the microscope. The trade barriers are in place because each province makes their own regulations and have technical and administrative differences, such as parameters around the sale of alcohol, certification for skilled workers, weight limits or tire regulations for freight trucks on highways and the transport of hazardous chemicals. “[The provinces] are not necessarily interested in removing those barriers, because they have their own financial costs, even if it's better for the economy as a whole," he said. Holden said he’s “definitely heard before from companies that it's easier to ship things north-south (Canada-US) than it is east-west (inter-provincial).”.Trudeau defends decision to keep Parliament on break as trade war escalates .Shane Mackenzie, Canadian Chamber of Commerce (CCC) VP Media and Stakeholder Communications said he’s focused on the issue of inter-provincial trade — which the CCC has been drawing attention to “for many decades.” He said that the CCC, and its provincial affiliates, have proposed the All in One Canada plan to each premier, which would deliver on the promise of internal trade, build infrastructure and reduce red tape and high taxation. “Everybody was on board basically saying, ‘We're ready to do our part on internal trade. We're ready to take the talk and turn it into action,’” Mackenzie told the Western Standard. “Obviously it's a time that we should be looking at reducing red tape so that businesses can build up domestic industries.”In addition to the internal trade issue, the CCC has encountered many questions on Canada’s taxation measures, “whether it was capital gains or digital sales tax.”“This is really a moment for all-hands-on-deck to reflect upon, how are we going to be competitive in a tax environment where Trump is lowering the corporate tax rate and a number of other things when we don't have a taxation environment that is as competitive.”“Competitiveness, that's been a discussion that we've been having for a long time where there's been a lot of concern.”.UPDATED: Appeals court hears Trudeau's lawyers fight unlawful Emergencies Act decision.Mackenzie noted Canada could make investment “so much more friendly and attractive” — but internal trade often doesn't make us as attractive as a market.” He explained even if Canadians, or even Americans, were to invest in Canada, it becomes a challenge to do business across provinces. “It's easier to sell back into the states,” he said. Mackenzie also discussed government red tape and high taxes. “Frankly, the red tape is stuff that they can get rid of tomorrow,” he said. “Parliament should not be in [prorogation] right now. They should be back and sitting.”“It's not about political jockeying. There are trade infrastructure investments that they can make. There are measures that they can take federally to reduce red tape at that level and to help encourage the provinces to actually achieve internal trade.”“Parliament needs to be sitting and frankly, parties need to put [everything else] aside and realize this is a moment of national importance.”
