Photo: CTV News

When it comes to U.S. tariffs, Kelowna is more vulnerable than some of its neighbouring cities, according to a report called the U.S. Tariff Exposure Index.

The Canadian Chamber of Commerce created the report using Statistics Canada export data to rank the country's 41 biggest cities on their vulnerability to the effect of U.S. tariffs.

Kelowna placed 28th.

That means it was more vulnerable than other B.C. communities, including Kamloops which was ranked 40th, Vancouver ranked 32nd, and Victoria ranked 36th. Report writers say Canadian cities that have less to fear from tariffs, including Victoria and Halifax, export more to Asia or Europe.

The report showed that 296 Kelowna companies export $385 million worth of goods to the U.S. every year. Shipments of goods from the Kelowna area across the Canada-U.S. border account for almost three per cent of the Central Okanagan’s gross domestic product.

Roughly 82.8 per cent of everything exported from Kelowna goes to the U.S., and the cross-border trade is worth $1,559 per capita in this region, according to the report.

“President Trump’s proposed tariffs will have significant consequences for the global economy — but for some of Canada’s cities, the threat is far more local and personal,” said Stephen Tapp, chief economist at the Canadian Chamber of Commerce.

"With this analysis, Canadians, businesses and policy makers have more evidence to inform ongoing discussions about how Canada can best respond to the monumental challenge brought by unnecessary and unjustified U.S. tariffs."

Grant Fortuin, partner at Kelowna’s Grizzly Metal Fab Inc., is an exporter of goods across the border and said he expected tariffs in some form, though he had hoped they would be avoided.

That hope fell flat earlier this week when U.S. President Donald Trump signed orders imposing 25 per cent tariffs on all steel and aluminum imports, including Canada, more dread seeped in.

“Currently, the tariffs seem to apply only to raw steel and aluminum, so fabricated steel should still be protected under the USMCA, which was implemented in 2020,” Fortuin said.

“However, this is likely to cause upward pressure on steel and aluminum prices, especially if Canada responds with retaliatory tariffs. The commercial and residential construction markets in B.C. remain soft, so any increase in costs will certainly have a negative impact on the industry.”

As with any tariff, the majority of the costs will be passed on to the end user, as fabricators simply don't have the margins to absorb these increases.

Fortuin said his company will work with clients and suppliers, to mitigate price hikes and source material from alternative suppliers where possible.

“Our clients in the USA seem to have little appetite for a potential trade war with Canada, and they are actively working with us to minimize any negative impacts on upcoming projects," he said.

Fortuin said the company doesn’t expect any job losses directly related to the tariffs, but are concerned about the broader impact the uncertainty—and the potential for increased costs—will have on the economy in B.C. and across Canada.

“Our company, and our industry, is well positioned to weather this storm,” Fortuin said in an email.

“We just hope that cooler heads prevail and that our government can effectively argue that tariffs are poor economic policy. The U.S. and Canada are stronger when we work together as friends and allies. Many steel fabricators and manufacturers in B.C. rely on the US market."

While Fortuin is looking for resiliency other companies may not have as much luck, particularly in other parts of Canada.

Saint John, which the Canadian Chamber of Commerce said is the most vulnerable city to tariffs, is home to the largest crude oil refinery in Canada — it can process over 320,000 barrels daily and more than 80 per cent of that oil is exported south of the border.

The Chamber of Commerce report said seafood and forestry products are New Brunswick’s other top exports to the U.S.

Calgary is the second most vulnerable city because it also exports crude oil and natural gas to the U.S., the researchers say. Beef is another one of its major exports that would be exposed in a trade war, the report said.

Photo: Canadian Chamber of Commerce

Kelowna 28th on the list of 41 cities in terms of its vulnerability to the effect of U.S. tariffs