Sarnia chemical industry facing uncertainty as looming tariffs pose 'dire' threat to sector

CBC News

· Posted: Mar 31, 2025 4:00 AM EDT | Last Updated: March 31

The president and CEO of the Chemistry Industry Association of Canada says imaginable U.S. tariffs connected Canada's chemic manufacture volition person a "dire" effect connected the assemblage — which has a important beingness successful Sarnia.

Some companies connected the ground, meanwhile, accidental it's concern arsenic usual, and they're doing what they tin to prepare. 

Chemical and plastics manufacturing successful North America is highly integrated, said the chemistry association's Greg Moffatt.

"Companies would person facilities successful Canada, the U.S. and Mexico, and they would beryllium producing one circumstantial commodity successful each of their locations, and they would be bringing them unneurotic for inputs for, you know, different product," helium said.

"And arsenic you've seen successful the automotive sector, you know, parts tin determination backmost and distant crossed the borders galore times earlier they upwind up successful a finished merchandise that mightiness beryllium utilized by an concern lawsuit oregon retail, right?"

It would not beryllium casual for companies connected either broadside of the borderline to reorient their businesses to debar tariffs, helium added.

Large percent of Canadian chemicals, plastics and resins spell to U.S.

U.S. President Donald Trump imposed 10 per cent tariffs connected Canadian vigor imports and 25 per cent tariffs connected each different Canadian imports connected March 4, lone to intermission them 2 days aboriginal connected goods that were compliant with the Canada-U.S.-Mexico escaped commercialized statement (CUSMA). 

Those tariffs are present acceptable to spell into effect connected April 2. 

And portion there's been overmuch absorption connected the interaction connected the Canadian car industry, the chemic manufacture is likewise exposed, Moffatt said.

Canada exported 77 per cent of its chemicals and 94 per cent of its plastics and resins to the U.S. successful 2023, according to information from the association.

Ontario unsocial exported astir $3 cardinal successful chemistry products and $9 cardinal successful plastics and resins to the U.S. that year.

Those products see polyethylene, butyl rubber, isopropyl alcohol, sulphuric acid, and integrative products utilized successful automobile manufacturing, nutrient processing, packaging and gathering materials. 

About $4.7 cardinal of the concern chemicals and resins exported to the U.S. came from Sarnia, said Dave Cherniak, the Chemistry Industry Association of Canada's argumentation manager for concern and transportation. 

During the little play that tariffs targeting the chemic assemblage were successful place, companies crossed Canada were absorbing them, Moffatt said. 

"And that would person important impacts, right?" helium said.

"That's your margin. That's your profitability. That's your quality to proceed to manufacture and run and wage your wages and your operating costs and make a instrumentality for your investments."

It remains unclear precisely however tariffs volition impact the country if Trump chooses to spell up with them long-term, said Matthew Slotwinski, the main enforcement serviceman of Sarnia-Lambton Economic Parthership.

'The connection of the time is 'uncertainty''

"The connection of the time is 'uncertainty,'" helium said.

Fuels, helium said, typically trust connected crude lipid piped successful from Alberta and converted into products for the Ontario market. 

"On the different hand," helium said, "When we look towards things similar our plastics manufacture — and past we're speaking astir companies similar NOVA Chemicals, for illustration — much of their feedstock successful the signifier of ethane is being derived from sources successful the United States, portion besides supplying to planetary customers with their output."

NOVA's manager of outer communications told CBC successful an email that the tariffs person the imaginable to make uncertainty. But the institution is "continuing concern arsenic accustomed per our lawsuit agreements."

When asked for specifics astir the company's vulnerability to imaginable tariffs, Samantha Peck referred CBC to the chemistry association.

NOVA established a hazard absorption squad precocious past twelvemonth aft Trump signaled his volition to levy tariffs, Peck said.

It besides pre-placed inventory successful the U.S  and worked with logistics and customs compliance teams "to unafraid tariff-free entree to export markets."

When asked to clarify what she meant by that, Peck replied successful part, "We person secured the indispensable entree to overseas commercialized zones to enactment our export concern without incurring tariffs."

Asked what the tariffs mightiness mean for accumulation and employment astatine NOVA successful Sarnia, Peck said the institution anticipates continuing to run its facilities arsenic accustomed to support a competitory and reliable proviso for customers.

The managing manager of Canada for ARLANXEO besides told CBC it's "business arsenic usual," though the institution is intimately monitoring the tariff situation.

"Our squad is committed to minimizing immoderate disruptions and ensuring compliance with the updated commercialized policies," Lori Wilkins:said.

Slotwinski said the businesses that run successful Sarnia-Lambton are planetary corporations with a beingness successful galore countries and planetary proviso chains.

That creates opportunities to avoid disruptions caused by tariffs.

"What we truly are proceeding from companies, astatine slightest astatine this constituent successful time, is that they're trying to beryllium proactive successful advocating to the provincial and national governments connected imaginable enactment plans," helium said.

"But they're besides readying successful presumption of identifying however their proviso chains tin possibly beryllium modified to trim the interaction of immoderate existing oregon imaginable tariff that whitethorn travel to reality."

Moffatt told CBC the tariff concern presents an accidental to code longstanding issues with competitiveness and productivity successful Canada, by improving infrastructure, adopting a predictable approvals process for projects, and offering competitory firm taxation rates.

But helium besides said it's captious that Canada find a diplomatic solution to the tariff issue.

"Our closest lawsuit is the United States, and it volition ever beryllium the United States," helium said.