Tariff uncertainty posing a challenge for Ontario municipalities

Kris Ketonen · CBC News

· Posted: Apr 21, 2025 5:00 AM EDT | Last Updated: 10 minutes ago

The ongoing Canada-U.S. commercialized warfare is forcing Ontario municipalities to "be incredibly nimble" erstwhile readying infrastructure projects, Thunder Bay's metropolis manager said.

While the tariffs associated with the commercialized warfare are starring to accrued costs for Canadian companies, the uncertainty astir when — oregon if — tariffs volition beryllium imposed or removed, is posing a large situation for cities similar Thunder Bay, City Manager John Collin said.

"We conscionable don't cognize what's going to hap next, and that uncertainty dramatically affects, I would suggest, each cities," helium said.

One illustration is the demolition task of Victoriaville Centre successful Thunder Bay's southbound end. 

The demolition of the promenade was initially expected to statesman successful April. However, successful March, the metropolis said it had extended the tender play until April 10, meaning it wouldn't statesman earlier May.  

Part of the hold came arsenic a effect of the analyzable quality of the project, metropolis engineering manager Aaron Ward said astatine the time, due to the fact that the task besides involves renovations and roadworthy operation successful the contract. 

But the commercialized warfare besides played a relation successful the delay, Ward said, with tenders needing to beryllium reworded to accommodate imaginable on-again, off-again tariffs, particularly since the full Victoriaville project won't beryllium completed until autumn 2026.

Ward said procurement besides needs to change. "We request to springiness immoderate benignant of comfortableness to the contractors," helium said, "because different each the contractors volition bash is they volition escalate their prices to found a contingency to support themselves to a degree." 

The metropolis mightiness besides person to enactment disconnected aboriginal projects including superior projects.

In a connection to CBC News, Allen Hensel, the city's manager of proviso management, said the "ever-changing tariff threats, changing implementation dates, changing lists of products to beryllium included oregon omitted, on with changing tariff percentages to beryllium charged" are leaving the metropolis successful a "position of heightened risk."

Hensel stated that simply asking contractors to wage a fixed lump sum up-front, which would screen imaginable tariff costs associated with a task isn't the answer, arsenic that would effect successful contractors either expanding their bid prices, oregon not bidding astatine all.

"The City besides recognizes that shifting each hazard to the contractor could effect successful further costs being built into their bid terms that whitethorn ne'er really materialize, thereby leaving the City paying much than different necessary," the connection reads.

Harold Lindstrom, manager of the Thunder Bay operation association, said allowances for imaginable tariffs request to beryllium made erstwhile tenders are issued.

"What I would urge to immoderate proprietor that's purchasing operation services is to let rules to set the the costs after, according to duties, and marque allowances successful determination erstwhile they grant a contract," helium said.

"We enactment what we telephone a contingency allowance of X fig of dollars, truthful successful their budget, they cognize that they've got this X fig of dollars that, if should thing hap with duties and that, they tin summation the cost."

And that other outgo would travel retired of the project's budget, Lindstrom said.

"We're not talking astir minimal alteration here. We're talking about, you bid a $1,000,000 occupation ... it could beryllium 15 oregon 20 per cent. That's immense dollars for owners to crook astir and accommodate for."

Lindsay Jones, manager of argumentation and authorities relations with the Association of Municipalities of Ontario (AMO), said the commercialized warfare is manifesting successful a assortment of ways for municipalities.

"From the position of the existent governments, determination are immense implications erstwhile it comes to, successful particular, infrastructure projects," she said. "There's besides considerations erstwhile it comes to procurement policies, and however municipalities are capable to employment a benignant of bargain local, oregon bargain Canadian, approach."

"But past there's besides important implications from the assemblage perspective," Jones said. "So knowing however this is going to interaction the section economies and past trying to find ways to enactment businesses arsenic overmuch arsenic they tin done antithetic section economical improvement initiatives."

Jones said Ontario municipalities walk astir $22 cardinal each twelvemonth connected procurement of goods and services. However, simply buying Canadian tin beryllium complicated.

"Is it idiosyncratic who has a office successful Canada? Is it a institution that employs a ample colonisation successful Canada?"

Jones said municipalities person to besides see immoderate requirements for different commercialized agreements specified arsenic inter-provincial commercialized oregon the Canada-EU commercialized agreement.

"There's besides conscionable the world that immoderate of the goods that municipalities trust connected to bash their jobs are not disposable from Canadian companies."

U.S. proviso chains inactive critical

Cutting retired the United States wholly erstwhile it comes to procurements is not an option, said Collin. 

"We mightiness get to that aft many, galore years, but the world is immoderate of the merchandise that is required simply does not beryllium successful Canada, whitethorn not adjacent beryllium successful Europe oregon Asia," helium said. 

Collin said the provincial and national governments request to determine a strategical absorption and past they request to connection municipalities wide direction.

Jones said AMO members are expressing a "really beardown tendency to enactment the national and provincial governments" successful their efforts to mitigate the effects of immoderate tariffs.

"While I deliberation that there's a batch of uncertainty, I deliberation that there's besides a batch of creativity and innovation that is perchance emerging done the municipal assemblage astatine this point."

The large national parties person outlined what they'd bash to code the commercialized warfare if they signifier the adjacent government. A afloat rundown of their positions is avialable here.