Leyne: It will take more than 'lots of sunshine' to lure Canadians to California

Canadians boycotting U.S.

Photo: Derrick Tuskan, AP FILES

California Gov. Gavin Newsom says California is ?2,000 miles from Washington and a world away in mindset.?

Premier David Eby and California Governor Gavin Newsom each gave breezy summaries of their brief video chat Monday that left the impression it was a pretty routine get-together.

But the next day, Newsom announced an ad campaign aimed at stemming the notice­able drop in Canadian visits to the U.S. and encouraging “northern neighbours” to visit his state.

You get the impression something was left off the public list of topics discussed.

Boycotting the U.S. is one of Eby’s favourite topics when it comes to raging about U.S. President Donald Trump’s economic attacks on Canada.

He cancelled a family trip to Disneyland in protest and has repeatedly urged British Columbians to cancel travel plans to the U.S. Last week, he issued a directive to curb government travel there and freeze out U.S. suppliers where viable.

You have to wonder if Newsom asked Eby to cool it.

Newsom posted that “the state of mind in the U.S. has dramatically changed as it relates to Canada,” as an oblique reference to Trump’s destruction of the formerly friendly relationship.

“We want to make sure we send a message to our Canadian friends up north to come to a state where two million Canadians visited last year.”

Some of the selling points of the California campaign: “We’re 2,000 miles from Washington and a world away in mindset.

“There’s lots of sunshine and a whole lot of love for our neighbours up north.”

Sure, you-know-who is trying to stir things up back in D.C., but don’t let that ruin your beach plans.

His post sparked the predictable barrage of sarcastic online contempt. Here's a ample:

“I don’t want to be the first Canadian with a spicy social media presence to end up in a foreign gulag because half your country is fine with voting the Antichrist into power.”

That’s a reference to a man with no criminal record who entered the U.S. illegally 14 years ago who was suddenly deported to an El Salvador prison. It was acknowledged as a mistake but Trump is refusing to return him.

It is remarkable how fears of arbitrary arrests have become a common concern after numerous dubious apprehensions by immigration and border officials.

Last month, a B.C. woman who entered the U.S. from Mexico was detained in a facility for almost two weeks because she didn’t have a work visa, and then deported.

There have been various official cautions about visiting the U.S. since Trump regained office.

Housing Minister Ravi Kahlon, who heads the NDP cabinet’s war room in the economic battle, voiced the same worry Tuesday.

“A lot of people have come to me who are really afraid of travelling to the U.S.”

Kahlon said he knows of someone who was held at the border for 10 hours.

“The family didn’t know where he was or what was happening, and so the fear is real.”

Kahlon and Eby have both expressed admiration for Canadians who are cancelling travel plans to the U.S. in protest over Trump.

Visit California, the state tourism agency, said Trump’s policies have dramatically cut Canadian tourism — by 12 per cent in February compared with last year.

The agency spends $5.2 million a year on Canadian advertising and is extending that budget in a bid to curb the drop.

It said two million Canadian visitors who went to California last year spent $3.72 billion.

That is a minimal part of the $150 billion generated by tourism there in a year. But Visit California is forecasting a ­$6-billion drop in tourism revenue this year arising from Trump’s policies.

The latest statistics from U.S. Customs and Border Protection, released Monday, show a drop of 864,844 travellers from Canada to the U.S. in March. There were 4.9 million in March 2024 and 4.1 million last month.

That follows a drop of about 500,000 in February.

The trend line in border crossing will be only minimally affected by Newsom or Eby’s contradictory recommendations.

It’s much more about a visceral reaction to the Trump administration that is driving people to arrive at their own conclusions.

Les Leyne is a columnist with the Time-Colonist newspaper in Victoria.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Charlebois: Counter-tariffs, not Trump, hurting Canada’s food economy

Canada's tariff response

Photo: Contributed

Prime Minister Mark Carney (left) and U.S. President Donald Trump

Canada’s food processing sector is becoming increasingly vulnerable – not merely due to global market volatility, but as a direct consequence of Ottawa’s policy decisions.

In choosing to retaliate against U.S. protectionism with formal counter-tariffs, Canada now finds itself aligned with China as one of only two countries to pursue such measures. While these actions may serve domestic political optics, they are inflicting measurable and lasting harm on Canada’s food manufacturing ecosystem.

Tariffs on U.S. food ingredients and critical inputs such as food-grade aluminum and steel are rippling through the supply chain. Large multinational processors often have the ability to absorb or deflect these added costs, passing them on to dominant grocery retailers like Loblaw, Sobeys, and Metro. Those grocers, in turn, push the increases to consumers. The result is a persistent layer of food price inflation that is now entrenched across many product categories.

But the deepest strain is being felt by Canada’s smaller, regionally based food manufacturers – the vast network of family-owned processors and local businesses that make up the core of this sector. These firms operate with tighter margins, limited purchasing power, and few options for substituting inputs.

And many now face cost increases of 15% to 25% on specific goods – levels that can jeopardize their viability.

Although Ottawa claims that mechanisms exist to offset these tariff impacts, the design of the system largely excludes the very firms it is meant to protect. Most smaller processors don’t import directly; they purchase ingredients through distributors and brokers, who are registered as the importers of record. Consequently, any rebates or tariff refunds are routed to intermediaries, not the manufacturers actually absorbing the higher costs.

Federal guidelines often classify end-users in ways that further disqualify small manufacturers from receiving support. This is what we are hearing from food manufacturers.

If a food manufacturer isn’t both the importer of record and the end-user, it’s out of luck – effectively excluding hundreds of food processors across the country.

The policy design here reveals a fundamental misunderstanding of how Canada’s food supply chain actually works. Expecting small processors to negotiate retroactive relief from intermediaries – some of whom are foreign-owned – is both impractical and naive. Encouraging them to “source elsewhere” ignores ingredient-specific dependencies that cannot be easily replicated outside the U.S.

The downstream effects are already emerging: reduced innovation, diminished product variety, and fewer new entrants in the market. With less competition and more reliance on imports, Canada’s food sovereignty erodes – and the system becomes more fragile.

This isn’t about whether Canada should take a stand in trade disputes. It’s about choosing tools that don’t quietly undermine our own economic foundation. Trade tensions with the United States – a country that accounts for roughly one-quarter of global GDP – requires more than performative gestures. They demand smart, targeted policy informed by rigorous economic analysis.

Mark Carney may view himself as a caretaker of Canada’s economic future in the face of Washington’s unpredictability, but current trade policy tells a different story – one in which political symbolism is prioritized over economic substance.

The food economy is paying the price for this disconnect, quietly but surely.

Canada’s independent processors are the backbone of our food manufacturing base. If they are forced out of the market by blunt instruments like counter-tariffs, the cost will be borne not just by business owners, but by consumers – through higher prices, fewer choices, and a diminished capacity to feed ourselves.

Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Afesorgbor: Canada mostly spared from Trump’s reciprocal tariffs but must not grow complacent

Canada and U.S. tariffs

Photo: AP Photo/Noah Berger, File

United States President Donald Trump’s so-called "Liberation Day" introduced sweeping reciprocal tariffs on approximately 60 countries on April 2.

Canada, a major U.S. trading partner, was largely spared from those reciprocal tariffs thanks to the Canada-United States-Mexico Agreement (CUSMA) — a free trade agreement renegotiated and signed by the previous Trump administration in 2020.

Although it may appear Canada has avoided the worst of the tariff measures, other existing tariffs could still significantly impact Canadian trade with the U.S.

Currently, Canada faces other tariffs on its exports to the U.S., which Trump has linked to concerns over illicit drugs and immigrants crossing the border. Under these measures, the U.S. has imposed a 25 per cent tariff on non-CUSMA compliant goods. Canadian energy and potash exports that are not CUSMA-compliant have been hit with a 10 per cent tariff.

If the current tariffs related to fentanyl and migration are lifted, CUSMA-compliant goods would continue to enjoy preferential treatment, while non-compliant goods would then be subject to a 12 per cent reciprocal tariff.

What makes a product CUSMA-compliant?

Under CUSMA, a product is considered compliant if it originates from any of the three member countries: Canada, the U.S. or Mexico. This means the product satisfies the originating status according to the rules of origin criteria listed in the CUSMA agreement.

To be deemed originating, some of the criteria includes, for instance:

• The product is wholly produced in the territory of one of the member states.

• If the product is produced with non-originating materials, the regional value of content must not be less than product specific rules of origin.

• The product has undergone substantial transformation or a change in tariff classification.

Regional value content is the difference between the transaction value of a product adjusted for costs related to international shipping of the good, and the value of non-originating material. It is expressed as a percentage of the transaction value.

When a product qualifies for an originating status, it is considered CUSMA-compliant. It then qualifies for a preferential treatment, which means it can enter the CUSMA market duty-free or at a reduced rate.

Products exported under CUSMA

Under the CUSMA tariff schedule, which outlines tariff commitments on Canadian products, the vast majority of Canadian exports to the U.S. are eligible for preferential treatment.

In fact, more than 98 per cent of tariff lines and more than 99.9 per cent of bilateral trade are CUSMA-compliant, meaning Canadian exporters can claim preferential access if their products meet the agreement’s rules of origin.

Based on the Tariff Schedule of the United States, 98.4 per cent of Canadian products enter the U.S. duty-free, while only 1.6 per cent face tariffs. These protected products are primarily agricultural goods considered sensitive by the U.S. — notably dairy and sugar.

These protected items are typically subject to tariff rate quotas, which allow limited quantities to enter at a lower (within-quota) duty rate, while imports beyond the quota are permitted at a higher (over-quota) tariff rate.

Steel and aluminum tariffs

Although Canada was not directly targeted by Trump’s reciprocal tariffs, its steel and aluminum industries remains significantly impacted by Section 232 tariffs. Importantly, these tariffs cannot be waived due to CUSMA.

Section 232 of the Trade Expansion Act of 1962 authorizes the U.S. president to restrict the import of certain goods if they threaten national security. Under this provision, the Trump administration has imposed a 25 per cent duty on steel, aluminum and related products.

Steel and aluminum products are crucial to Canada, with total exports of iron and steel, iron or steel products and aluminum products reaching $34.8 billion in 2024. It’s hard to imagine the U.S. justifying tariffs on Canadian steel and aluminum on national security grounds, given Canada’s longstanding role as one of its closest allies.

Automotive tariffs

The automotive sector has also been targeted with the Section 232 tariffs. As Canada’s second-largest export to the U.S., valued at over $72.3 billion in 2024, the industry relies heavily on an integrated cross-border supply chain. That makes the sector particularly vulnerable to tariffs.

The imposition of a 25 per cent tariff on non-U.S. content in vehicles threatens the profitability of Canadian producers and reduces production efficiency.

Determining non-U.S. content at the border will lead to significant inefficiencies, including long wait times, as companies attempt to prove American content in vehicles. This process will also demand an excessive amount of documentation, imposing unnecessary costs on businesses.

This tariff also undermines CUSMA’s rules of origin, which allow vehicles with at least 75 per cent North American content to qualify for duty-free access. The Section 232 measure effectively penalizes compliant vehicles, creating a trade barrier inconsistent with the spirit of the agreement.

The way forward

The uncertainty created by the Trump administration’s unilateral trade policies poses a serious threat to Canada and the global economy as a whole. With Trump’s presidency just beginning, both Canada and the rest of the world must brace for the economic disruptions his policies may bring.

At the bilateral level, Canada appears to have exhausted nearly all diplomatic avenues to persuade the Trump administration to reverse its harmful tariff measures. Regionally, while Trump renegotiated the CUSMA agreement, his actions have undermined its spirit and violated key provisions.

At the multilateral level, the World Trade Organization (WTO) has been significantly weakened. Its dispute settlement mechanism has been rendered ineffective due to the U.S. blocking the appointment of new judges to its appellate body.

The only faint silver lining is that, despite threats during his first term to withdraw from the organization, Trump has not followed through. This suggests he still holds at least some degree of respect or recognition for the WTO’s role in global trade.

The world is currently navigating a period of deep uncertainty and confusion. Canada must stand in solidarity with the international community to exert collective pressure on the U.S. A co-ordinated global response could compel Trump to reconsider his unilateral trade policies.

Although Canada has been granted a reprieve from the new reciprocal tariffs, this should not lead to complacency. Instead, Canada should continue to collaborate with other nations to push for a more stable and rules-based global trading system. This is the way to protect Canada’s interests and reinforce multilateral co-operation.

Sylvanus Kwaku Afesorgbor is an associate professor of agri-food trade and policy at the University of Guelph. This column first appeared on The Conversation website.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Yu: B.C. job vacancies reach lowest level in years, SME sentiment falls

Small business outlook

Photo: Building

B.C. job counts were unchanged in January according to Statistics Canada’s latest Survey of Employers, Payroll and Hours at 2.56 million positions, nudging down by 624 positions.

Goods-producing industries reported 1,370 more (0.4 per cent) positions while services-producing payrolls added 880 positions (0.04 per cent). The decline in overall headcounts were concentrated in unclassified businesses. Broadly, payroll counts in B.C. have been range-bound over the past year with little change in net positions.

The job vacancy rate edged down to 3.5 per cent in January, with total vacancies falling to around 87,000—lowest level since August 2017. While the job vacancy rate has remained below four per cent since May 2024, this January still marked the lowest level since June 2017. This points to weak hiring sentiment on the part of employers, which has further deteriorated with tariff threats.

Within goods-producing industries, energy posted an increase of 1,000 payrolls to lead the overall increase. The most notable increase in services was in education, which reported a gain of nearly 3,600 positions (1.9 per cent). The growth was offset by declines in sectors such as information and culture (down 1,600 positions or 2.6 per cent) and health care and social assistance (down 1,520 positions or 0.4 per cent). Transportation reported continuous growth with 1,400 more positions (up 1.1 per cent). There was little change in the remaining sectors.

Hiring momentum will continue to slow as businesses temper investment and expansion, and remain cautious due to economic uncertainty.

The Canadian Federation of Independent Business (CFIB) Barometer Survey showed a dramatic decline in sentiment in March amongst small and medium-sized enterprises (SMEs) as U.S. tariff threats intensified. The long-term 12-month confidence index fell for a fourth consecutive month, decreasing by 24.8 points to 25 points.

The short-term index also declined by 16.1 points to 31.2 points. The 12-month indicator was lower than that seen during the 2020 pandemic, 2008 financial crisis and 9/11. U.S. and Canadian retaliatory tariffs that went into effect in March and the plan for additional measures have caused widespread uncertainty, especially in exposed sectors and businesses.

Importing SMEs saw the measure decline to 35.6 points, down from the recent November peak of 60.9 points. Exporting SMEs saw a similar, slightly larger decline from 63.1 points to 35.9 points. The hospitality sector and manufacturing sector are the lowest sectors based on the 12-month index, coming in at 17 points and 18.6 points

The long-term index fell in B.C. by 22.6 points, but marked the third-smallest decline among the provinces, with only New Brunswick and Newfoundland and Labrador seeing a smaller decline. The short-term index fell by 7.5 points and was the second-smallest decline after New Brunswick.

The current value of 26.5 for the long-run index and 34.4 for the short-run index puts B.C. in the middle compared to other provinces, but the overall performance remains dismal. That said, B.C.’s export market is more sheltered from U.S. tariffs given less trade exposure to the country.

The U.S. share of B.C.’s international goods exports is about 52 per cent, compared to 75 per cent nationally.

Bryan Yu is chief economist at Central 1.This column first appeared on the Business In Vancouver's website.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.