Tariffs hit Alberta's beer and boating sectors

Albertans in the market for beer or boats could soon be paying more as local companies take a hit in the ongoing U.S.- Canada trade war.

In some cases, companies are taxed on both sides of the border

Canmore Brewing Company president Brian Dunn says he'll be hit by tariffs on both sides of the border. (Canmore Brewing Company)

Albertans buying beer or boats could soon be paying more as local companies take a hit in the ongoing U.S.- Canada trade war.

Some of those companies will be penalized twice by both U.S. tariffs on aluminum and steel and the retaliatory tariffs imposed by the federal government on July 1.

Among them is the Canmore Brewing Company, where the president Brian Dunn is bracing for the jump in cost on his next order of 100,000 tall cans. He relies on the 16-ounce cans for about half of his sales. 

The aluminum is sourced in Canada but has to be sent to the U.S where it's made into cans and lids before being shipped back That means Dunn will be taxed twice at a penalty of at least 11 per cent, he said.

"If our costs go up, our prices basically have to go up because like any other business we have to make money to stay in business and if we have that significant of an increase in our input cost that has to be translated into our sales price," said Dunn.
Argyll Motorsports & Marine said boat prices could soar for the 2019 season. (Argyll Motorsports & Marine)

It's the similar situation at Argyll Motorsports Marine in Edmonton where they'll place orders next month for the 2019 season.

Sales manager Ryan Dixon said the majority of boating manufacturers are in the United States. He said U.S tariffs could see the cost of a boat climb by $10,000 to $15,000 in the 2019 season.

"Sales are going to go down and I think people are going to wait and they're not going to purchase right now," said Dixon, adding there may be the possibility of a customer rebate if the situation is soon resolved.

But right now, said Dixon, boat sales are up, as customers buy up what's left of the old stock, before it's too late.

David Maclean, Alberta's vice president of the Canadian Manufacturers and Exporters (CME), said there are "significant impacts" on  Edmonton-area businesses that rely on steel and aluminum.

He cited the example of Argus Machine, an Edmonton company with about 150 employees, that is being taxed on both sides of the border by importing steel into Canada, and then shipping exports back into the U.S.

"So that's kind of the worst-case example for an Edmonton-based company," said Maclean, adding there are many such examples across the province.

"Our thinking is that the only way forward for Canadian companies that are integrated into the U.S economy is to get NAFTA done," said Maclean. "That's the only long-term solution."

Financial support available

Maclean said the Alberta government has been "very good about keeping the lines of communication open with manufacturers."

He similarly expressed his organization's support for the federal government's efforts on NAFTA, including fulfilling CME's request to provide some support packages to companies hurt by counter tariffs.

"So there is some financial support for companies and they just need to make those applications and see whether there's some compensation available to them," said Maclean.

Alberta Minister of Economic Development Deron Bilous said Wednesday the province and the federal government are evaluating the impact of the tariffs, while implementing other forms of support.

He lauded the federal government's move to return some of the money collected through counter tariffs to impacted businesses as requested by Premier Rachel Notley.

Bilous said the premier had formed a NAFTA working group with business leaders from different sectors while he met with politicians last month in Seattle and Spokane to promote trade and reduced barriers.