Trade war’s uncertainty, not tariffs, real concern: Highbury Canco CEO
It’s not the tit-for-tat tariff spat between Canada and the United States that has business leaders like Leamington’s largest employer worried the most — it’s the uncertainty over when and where this looming trade war ends. “Most of my peers would agree — the most important thing here is that we get certainty,” said Highbury Canco president and CEO Sam Diab.
“What will the landscape be long-term? Constant change stifles investment,” said Diab, who is also one of the Leamington company’s owners.
On July 1, Canada begins slapping retaliatory tariffs on a broad range of U.S. goods in response to the Trump administration’s June 1 imposition of new tariffs on steel and aluminum imports, justified at the time as being in the interests of American national security. Calling that reason “absurd,” the Trudeau government is hitting back on Canada Day, but U.S. President Donald Trump is already threatening more tariff hikes.
“Everyone’s attention now is on, ‘What’s next?’” said Diab.
The new Canadian tariffs include a 10-per-cent hike on imports from America of ketchup and other tomato sauces that might, over time, provide a competitive advantage for the Leamington company. But Highbury Canco will now have to also pay more for the steel food cans used for its consumer products. As with automobiles, food processing is a highly integrated sector between Canada and the U.S.
As part of a Canada Day crosscountry tour, Prime Minister Justin Trudeau will be visiting Highbury Canco workers on July 1. Diab said the machinery at the Leamington factory, as per normal on Sundays and statutory holidays, will be shut down, but the PM will be greeted with a street party and community barbecue.
A stretch of Erie Street South will be closed from 9:30 a.m. to 3 p.m. There will be tents and food and a live performance from homegrown rocker Jody Raffoul. Diab anticipates about 1,000 people — factory workers and their families — from the former Heinz plant alone, while the rest of the community is also invited. Leamington already had big Canada Day weekend plans, including the Windsor Symphony Orchestra performing on the beach on June 30 and bands at the amphitheatre and fireworks on July 1. Trudeau’s visit will be “icing on the cake,” said Mayor John Paterson. Highbury Canco, which emerged from the ashes after Heinz’s foreign owners decided to close down the town’s long-time largest employer, currently has 560 full-time employees and continues to grow. Diab said an additional 150 fulltime seasonal workers will soon be hired to help process this year’s harvest of about 160,000 tonnes of locally grown tomatoes. Formerly famous for its Heinz ketchup, the sprawling food processing facility now makes “more pasta sauce and salsa than we ever made in ketchup,” said Diab. “We’re a good news story for Ontario and Canada,” he said. The company boasts “a few hundred products,” including a recently launched Kettle Creek BBQ Sauce that Diab said is selling fast off the Costco shelves.
While “uncertainty doesn’t help anybody,” said Diab, neither does being fearful. “At Canco, we’ll focus on what we know … good, quality, safe food products.”
At an emergency meeting Tuesday of the House of Commons standing committee on international trade, MPs heard one of the next biggest dangers is the threat by Trump of a new 25-per-cent tariff on automobile imports. “We’re in a legitimate trade war at this point,” said committee member MP Tracey Ramsey (NDP — Essex). “What we heard today was very disturbing,” she told the Star Tuesday after hearing submissions from business, industry and workers.
Such a hit on the auto sector — being considered under the same U.S. national security provisions as previously used for steel and aluminum — would be “devastating” for Windsor-Essex County, said Ramsey. She hopes that’s one of the messages Trudeau hears on Sunday. He flies into Windsor Airport that morning, will meet with workers in Leamington and then fly to Regina, Sask., and Dawson City, Yukon.
“I don’t think there’s a region in this country with the potential to be harder hit than ours,” said Ramsey.
While the news presented Tuesday to the parliamentarians was grim, Ramsey said there were “encouraging ” suggestions on how Ottawa could respond to escalating American tariffs in order to protect Canadian jobs and livelihoods. Among the proposals: expand EI supports to assist workers who need to move, require re-education for other jobs or whose employers might look at job sharing as a way to avoid layoffs. Another suggestion is to “put 50 per cent (of the funds being raised from the new tariffs) right back into the sectors that are being hit,” said Ramsey.
While those who spoke to the committee were fearful of further American retaliation and warned of the possibility of Canada’s economy dipping into recession under a trade war scenario, MPs also heard that Canada could not simply sit back and not respond. Leamington’s mayor believes Trump knows exactly what he’s doing, hoping to secure a trade advantage for the U.S. by creating chaos and uncertainty in the marketplace.
“This is his M.O. as a business person — he bullies and everyone acquiesces,” said Paterson. This time, however, Leamington’s mayor said he’s doubtful Trump will “pull this one off.”