Tariff Conflict: Workforce Planning for Canadian Employers

Managing your Workforce Amid Tariff Conflict: Considerations for Canadian Employers (Updated Fall 2025)

U.S. tariffs on Canadian goods have escalated, deepening concerns for Canadian businesses. Over the summer of 2025, the trade dispute intensified - the U.S. raised its general tariff on Canadian imports to 35% (up from 25%), though it exempted goods that qualify under the US-Mexico-Canada Agreement (USMCA) (source: tax.thomsonreuters.com reuters.com).

Canada, in turn, adjusted its retaliation strategy, removing many counter-tariffs by September as a goodwill gesture (source: reuters.com). While these steps restored duty-free trade for the majority of products, key sectors like steel, aluminum and autos remain under hefty duties on both sides (sources: reuters.com canada.ca). Volatility in our trade dynamics with the U.S. therefore persists, creating continued uncertainty for Canadian employers even as some relief measures take hold.

Breaking Down the Tariff Dispute: A Quick Timeline (Winter–Spring 2025)

Breaking Down the Tariff Dispute: A Quick Timeline

February 1, 2025: U.S. President Donald Trump invokes emergency economic powers and signs executive orders imposing sweeping new tariffs. The orders call for a 25% tariff on all imports from Canada (with a 10% rate on Canadian oil and energy) and 25% on all imports from Mexico, alongside a 10% tariff on imports from China, effective Feb. 4 pbs.org. These measures were justified by the U.S. as a response to undocumented immigration and fentanyl smuggling, but prompted immediate outrage. Canada vowed to retaliate with equivalent tariffs - an initial 25% surtax on about $30 billion of U.S. goods, expanding to $155 billion after 21 days.
February 3, 2025: Just one day before tariffs were to hit, both sides pulled back. President Trump agreed to a 30-day pause on the threatened tariffs against Canada and Mexico, while Canada put its counter-tariffs on hold. This temporary truce was intended to allow negotiations on border security measures.
March 4, 2025: The truce expired. The U.S. proceeded to implement tariffs on Canadian exports, with 25% duties on most goods and a 10% duty on Canadian energy and potash (reuters.com). Canada simultaneously imposed its Phase 1 retaliatory tariffs of 25% on $30 billion in U.S. imports (pm.gc.ca). At the same time, the U.S. doubled its tariff on Chinese imports to 20%. Then Canadian Prime Minister Justin Trudeau announced plans for further countermeasures totaling $155 billion CAD (Phase 2) over the coming week. However, Canada paused its Phase 2 tariffs (the additional $125 billion list) until at least April 2 in hopes that diplomacy might prevail.
March 5–6, 2025: Facing pressure from industry and allies, the U.S. offered limited relief. On March 5, President Trump announced a 30-day exemption for all automobiles and auto parts from Canada and Mexico. On March 6, this exemption was clarified to apply to products compliant with the Canada-U.S.-Mexico Agreement (CUSMA), essentially sparing vehicles/parts meeting North American content rules from tariffs until April 2. Goods failing CUSMA origin requirements still faced 25% tariffs, and non-CUSMA energy products 10%. In response, Canada maintained its initial 25% surtax on $30 billion of U.S. goods, but postponed its second round of retaliatory tariffs (the remaining $125 billion) until April 2.
March 12, 2025: The trade conflict broadened. The U.S. imposed new 25% tariffs on steel and aluminum imports globally (including Canada; source: pm.gc.ca). Canada responded in kind the next day (March 13) with equivalent 25% tariffs on U.S. steel ($12.6 billion worth) and aluminum ($3 billion), plus other U.S. goods totaling $14.2 billion - matching the U.S. metal tariffs dollar-for-dollar.
March 26, 2025: President Trump signaled further escalation in the auto sector. He announced plans for an executive order to impose a 25% duty on all vehicles not manufactured in the U.S., with effect from April 2. This raised the stakes for Canada’s vital auto industry.
April 3, 2025: The U.S. followed through on the auto tariffs. A 25% duty on Canadian-built automobiles came into effect, directly targeting an industry that employs over 500,000 Canadians (pm.gc.ca). The U.S. also indicated 25% tariffs on certain auto parts would kick in by early May, with the tariff only applying to the non-American content of CUSMA-qualified vehicles and parts. Canada immediately hit back: it implemented a 25% surtax on imports of U.S.-made automobiles that do not meet CUSMA rules. Ottawa also unveiled steps to support the sector, including a framework to incentivize automakers to continue producing in Canada. Every dollar collected from Canada’s auto counter-tariffs will be directed to support Canadian auto workers and communities.
April 9, 2025: Global markets struggled with the expanding trade war, prompting a dramatic U.S. policy shift. In the early hours, Trump’s promised “Liberation Day” reciprocal tariffs took effect, raising import taxes on dozens of countries. Hours later, the White House announced a 90-day suspension of most of these new tariffs in an attempt to calm markets. The U.S. rolled back planned increases, maintaining a baseline 10% tariff on nearly all global imports during the 90-day pause. However, Canada’s situation was unchanged - the 25% U.S. tariff on Canadian goods (and 10% on energy/potash) remained firmly in place (reuters.com). In other words, the U.S. excluded Canada (and Mexico) from this broad tariff pause, as those tariffs were enacted under a separate border-security rationale (toronto.citynews.ca). Canada’s retaliatory measures on U.S. goods likewise stayed in effect, now including the new 25% duty on U.S. automotive imports that had just been implemented.

(To summarize up to this point: after a temporary lull in February, tariffs largely proceeded - the U.S. was taxing most Canadian exports at 25% (with some sectoral exceptions), and Canada matched with its own 25% counter-tariffs on a wide array of U.S. imports. Autos enjoyed a brief reprieve, but by early April were very much in the crosshairs on both sides.)

Continued Escalation and Summer 2025 Developments

June 4, 2025: The U.S. doubled its tariffs on imported steel and aluminum to 50%, with no exemption for Canada (source: globalnews.ca). Prime Minister Mark Carney blasted the move as “unlawful” and warned that Canada was prepared to enact “reprisals” if negotiations failed. Canada’s steel and aluminum producers cautioned that the jump to 50% U.S. duties would cause significant layoffs and supply chain turmoil. (Canada maintained its own 25% counter-tariffs on U.S. metals, opting not to immediately match the U.S. increase.

June 16, 2025: At the G7 Summit in Kananaskis, Alberta, President Trump and Prime Minister Carney agreed to intensify talks and aim for a trade compromise within 30 days (source) en.wikipedia.org. Carney had taken office after Prime Minister Trudeau’s early 2025 resignation and won the April 28 federal election on a promise to stand firm against U.S. tariffs. The G7 discussions reflected a hopeful tone, with both countries pledging to work toward a resolution by mid-July.

Late June 2025: Despite the G7 commitments, negotiations hit turbulence. On June 27, Trump abruptly suspended the bilateral trade talks and announced plans for new tariffs targeting all goods crossing the Canada-U.S. border. This provoked alarm in Ottawa, but the crisis was short-lived. By June 30, the White House reversed course - talks were restarted after Canada made a key concession by scrapping its proposed digital services tax on large American tech firms. U.S. officials credited this climb-down for getting negotiations back on track, averting the threatened new tariffs. (The digital tax had been a major U.S. irritant; its withdrawal signaled Canada’s willingness to compromise to keep trade discussions alive.)

July 10, 2025: With no deal yet in hand, President Trump escalated the pressure. He announced plans to raise the main tariff on Canadian goods to 35% (from 25%), effective August 1 (source: tax.thomsonreuters.com). Notably, the White House specified that goods qualifying under USMCA would be exempt from this hike (source: reuters.com). This exemption for USMCA-compliant products - which include most Canadian manufactured goods that meet North American content rules - was a crucial carve-out that spared a large portion of Canada’s exports from the new 35% duty. In a letter to Carney explaining the move, Trump cited Canada’s “continued inaction and retaliation” as well as the ongoing flow of fentanyl into the U.S. as justification. He warned that if Canada raised its own tariffs further in response, the U.S. would mirror any increase on top of the 35%, but also hinted the tariff could be adjusted “upwards or downwards” depending on Canada’s cooperation on security issues like drug smuggling.

August 1, 2025: The U.S. 35% tariff on Canadian imports took effect after the two nations failed to reach an agreement by the August 1 deadline (source: reuters.com). Prime Minister Carney said he was “disappointed” by Trump’s decision to proceed with the hike, noting that it would heavily impact Canada’s lumber, steel, aluminum and automotive sectors. He reiterated that Canada would “stand our ground” and focus on supporting affected workers and industries (source) reuters.com. Importantly, due to the USMCA exemptions, the majority of cross-border trade continued to flow without tariffs despite the headline 35% rate. In fact, roughly 85-90% of Canada’s exports to the U.S. remained tariff-free because they meet USMCA rules of origin. Many Canadian companies had adjusted their supply chains in recent months to maximize USMCA compliance, allowing their goods to avoid tariffs. Canada, for its part, chose not to escalate its retaliation further at this stage - it kept in place the 25% counter-tariffs on U.S. goods that were already imposed (concentrated mainly on metals, autos and a $30 billion list of other products), but did not levy the additional $125 billion in countermeasures it had threatened earlier (source: reuters.com). This restrained response indicated that Ottawa was prioritizing a return to negotiations over a tit-for-tat spiral.

August 22, 2025: In a significant conciliatory move, Prime Minister Carney announced that Canada would remove many of its retaliatory tariffs on U.S. imports as of September 1. Specifically, Canada lifted the 25% surtaxes it had placed in March on most U.S. goods covered under USMCA - mirroring the U.S. approach of exempting USMCA-compliant products. Tariffs that target the U.S. in strategic sectors - notably the 25% duties on American steel, aluminum and non-USMCA automobiles – remain in effect (source: canada.ca), since the U.S. is likewise still applying tariffs on Canadian metals and vehicles (without exempting Canadian products even if they meet USMCA criteria in those categories). Carney framed the tariff rollback as a “goodwill gesture” to help restart stalled talks, after confirming that Washington would not tariff Canadian goods that are USMCA-compliant. The White House welcomed Canada’s step - Trump called it a “nice thing” and remarked that he “wants to be very good to Canada” as negotiations continue.
By early September, thanks to these mutual exemptions, the two countries had effectively re-established free trade for the vast majority of bilateral goods, easing the pressure on many businesses. However, no comprehensive deal has yet been reached. Intensive talks are ongoing toward what officials describe as a “new economic and security partnership,” but the outcome remains uncertain. In the meantime, steep tariffs persist in the few sectors still at issue (metals, autos, and certain other non-USMCA goods), and both governments are rolling out measures to support their domestic industries through the impasse.

Trade Negotiations with a Fresh Canadian Administration

With tariff volleys escalating through the spring, attention had turned to diplomacy and political change. In late March, after Mark Carney became Prime Minister, he spoke with President Trump and agreed to begin “comprehensive negotiations” on a new economic and security relationship immediately after Canada’s federal election. Both sides expressed willingness to find a longer-term resolution. In the interim, Canadian Minister Dominic LeBlanc and U.S. Commerce Secretary Howard Lutnick led working-level talks to address urgent trade concerns. Still, Canada made clear it would not back down: Carney informed Trump that Canada would proceed with retaliatory tariffs to protect its workers following the U.S. actions slated for April 2.

Canada’s federal election was held on April 28, 2025, amid this trade turmoil. The result maintained continuity in approach - Carney’s Liberal government won re-election, though with a reduced minority mandate. Prime Minister Carney had explicitly sought a strong majority to bolster Canada’s position in tariff negotiations with Trump, but will now need support from other parties to navigate the conflict. In his victory speech, he struck a resolute tone on trade, declaring that “our old relationship with the United States, a relationship based on steadily increasing integration, is over”. He acknowledged that the postwar system of U.S.-anchored free trade can no longer be relied upon, and vowed that Canada will adapt to this new reality. This signaled a policy shift toward diversifying trade partnerships and strengthening economic self-reliance. Allies such as the EU rallied around Canada - EU officials emphasized defending free and fair trade together with Canada and other G7 partners - suggesting Canada will deepen ties with Europe and others as a counterweight.

Following the election, the Canadian government’s stance on the tariffs remained firm. All provincial and territorial premiers presented a united front with the Prime Minister in opposing the U.S. trade actions. In a joint discussion in early April, Canada’s First Ministers condemned the U.S. tariffs for putting thousands of jobs at risk on both sides of the border. They agreed on a response strategy that “maximizes impacts in the U.S., minimizes impacts on Canadians, and avoids escalating a trade crisis”. Notably, the federal government pledged to use all retaliatory tariff revenues to support Canadian workers and businesses hurt by the dispute. This approach underscored Canada’s resolve to stay retaliatory yet pragmatic - maintaining pressure on the U.S. while shielding its own economy as much as possible.

High-level diplomacy unfolded in the subsequent weeks. Carney and Trump met face-to-face at the White House on May 6, 2025, in an effort to reset relations. The meeting, which included a 75-minute one-on-one conversation, was described by Carney as “very positive”. Trump struck a surprisingly cordial tone, calling Canada a “very special place” and joking that he only sought “friendship,” while Carney firmly quashed Trump’s half-serious musings about U.S. annexation of Canada by telling him, “it’s not for sale”. The two leaders agreed to kick-start the renegotiation of the trading relationship, with Trump committing to work on a new Canada-U.S. trade agreement. They also discussed broader issues like the Russia-Ukraine war and the China file. This early May summit set a constructive tone and led to the formation of negotiating teams on both sides. Carney emerged emphasizing that Canada would address U.S. security concerns (for example, cooperating even more on northbound drug interdictions) but would insist on stable, fair trade in return.

Despite the positive optics in May, by summer it became clear that talks would be protracted. The pledge to reach a deal by mid-July slipped as hardline positions persisted. By late August, Carney explicitly shifted to a “moderate approach” on the dispute, opting to ease retaliatory measures in order to keep negotiations alive. “Let’s be clear, we have the best deal of anyone in the world right now,” Carney said, referencing the largely intact free trade on most goods under USMCA. He argued that no other country enjoys the access to the U.S. that Canada still does, even if the situation is “different from what we had before”. Moving forward, Canada’s focus is on resolving the remaining sectoral tariffs and on the upcoming USMCA review in 2026 - an opportunity to reinforce and update the trade pact. In public statements, Canadian officials stress that successfully renewing USMCA is critical to protecting the country from broader tariffs. In short, the summer brought a mix of escalation and partial relief: the tariff war widened to 35% duties, but an implicit truce now shields most industries aside from a few strategic sectors. The political challenge for Prime Minister Carney is balancing toughness with pragmatism - a stance that has drawn some domestic criticism. Opposition leaders have accused him of going too soft after campaigning on standing up to Trump. Nevertheless, the federal government and all premiers continue to present a united front in defending Canadian interests, and diplomatic channels remain very much open as both nations seek a path out of the impasse.

Considerations for Employers During Ongoing Tariff Unpredictability

While government officials work toward solutions, many Canadian workplaces are feeling the strain of the unresolved tariff conflict. The threat - and reality - of escalating tariffs on Canadian goods has created considerable uncertainty for businesses. Employers have been grappling with difficult decisions in this unstable environment. Common impacts include hiring freezes or revised hiring plans, postponed capital projects, tightened budgets, and in some cases layoffs and production cuts.

Unfortunately, these scenarios have materialized in various sectors. Back in early April, a number of companies announced workforce reductions citing U.S. tariffs as a driving factor (bnnbloomberg.ca). For example, automaker Stellantis temporarily halted production at its Windsor, Ontario assembly plant for two weeks, putting approximately 3,200 employees out of work for the duration. The company directly attributed the pause to the newly imposed U.S. levies on imported vehicles and parts, which disrupted its cross-border supply chain. In another case, Winnipeg-based manufacturer Eascan Automation laid off about one-third of its staff in late February due to clients stalling projects amid economic uncertainty - the cost of aluminum for inputs was set to jump nearly 50% because of tariffs, eroding demand for new equipment. And in a more drastic example, furniture-maker Prepac Manufacturing announced the closure of its Delta, BC plant, moving production to North Carolina; the union representing workers lambasted the decision as “using the tariffs as an excuse”, illustrating how some firms have responded by shifting operations to the U.S. to bypass trade friction. These examples underscore that the tariff war’s aftershocks are being felt on both sides of the border, hitting Canadian firms and workers in tangible ways.

As the dispute dragged into the summer, the toll became more evident in macroeconomic data. Businesses that held off on major changes in the hope of a quick resolution have had to confront a new status quo of prolonged uncertainty. Canada’s manufacturing sector, in particular, has seen a downturn in employment. In July 2025, the number of people employed in manufacturing was down by roughly 10,000 compared to a year earlier, as companies linked to steel, aluminum and auto production curtailed hiring and implemented layoffs (source: aljazeera.com). The United Steelworkers union reports that about 1,000 of its members in Canada have been laid off so far due to the tariffs, and they fear that could rise if conditions don’t improve. Overall, the Canadian economy shed a net 40,800 jobs in July, and the national unemployment rate has crept up to 6.9% - the highest in several years (outside of the pandemic). Analysts attribute much of July’s pullback to the tariff fallout hitting manufacturing and related industries. In short, the longer the trade conflict persists, the more its effects are broadening from isolated plant closures to the wider job market. For employers, this has meant an ever-present need to evaluate and re-evaluate workforce plans in light of both company-specific and economy-wide conditions.

Canadian businesses are also confronting operational challenges beyond staffing. The on-again, off-again nature of tariff announcements has been described as a state of “whiplash” for companies dependent on cross-border trade. Many supply chain managers have found themselves in stop-and-go scenarios - rushing shipments across the border before new duties land, then scrambling to reroute or hold inventory when policies change last-minute. Logistics and customs brokers report clients repeatedly pausing deliveries whenever a White House tariff announcement looms, then paying premium storage and transport fees to move goods quickly during brief reprieves. This erratic climate makes it extremely difficult for businesses to plan production, pricing, or inventory with any certainty.

As the CEO of the B.C. Chamber of Commerce noted, “businesses need certainty in order to operate… and invest”, and right now certainty is in short supply (source: bnnbloomberg.ca). There may also be opportunities for certain sectors amid the turmoil. Some organizations are looking to repatriate processes or find domestic suppliers to reduce exposure to U.S. tariffs, potentially boosting Canadian supply industries. (For instance, a Canadian food manufacturer might source ingredients locally rather than from the U.S. to avoid import costs, creating new business for Canadian farms.) Conversely, other companies have made the hard choice to relocate operations into the U.S. to sidestep tariffs. As noted, a few Canadian manufacturers moved parts of their production south of the border ahead of the tariff hikes, sacrificing Canadian jobs to preserve access to the U.S. market. Each company’s situation is unique, but virtually all are engaged in some form of cost–benefit analysis around the tariffs - whether to absorb higher costs, adjust business models, or restructure their workforce - all under the cloud of trade uncertainty.

On top of everything, employees themselves are feeling vulnerable. Periods of economic uncertainty tend to heighten employee anxiety, and this trade conflict is no exception. Your workforce is likely aware of the headlines and may be worrying about the security of their jobs, especially in industries directly affected by tariffs. They’re also navigating the broader impacts of inflation and rising costs for their families, and watching the volatility in their retirement savings. (Notably, the stock market saw sharp swings tied to the tariff news; for example, in early April the S&P/TSX Composite Index plunged nearly 10% over just a few trading days - its worst stretch since March 2020 - amid fears of an all-out trade war, before rebounding when a partial U.S. tariff pause was announced on April 9.)

Some employees even express anxiety about extreme rhetoric - such as the speculative talk of U.S. annexation of Canada that surfaced in political commentary during the dispute - which, while far-fetched, can be unsettling when tossed into the public discourse. All of this adds up to a workforce under stress. By mid-year, those worries were being borne out in real layoff announcements and hiring freezes, further eroding morale. Even staff whose jobs aren’t immediately at risk could be feeling the strain indirectly. It’s critical for Canadian employers to acknowledge these concerns and take proactive steps to support their teams.

Strategies for Navigating Workforce and Operational Challenges

In the face of ongoing trade disputes and economic volatility, Canadian employers can employ several strategies to steady their operations and workforce:

Plan for Multiple Scenarios and Stay Agile: In an unpredictable environment, scenario planning is essential. Businesses should develop contingency plans for various outcomes - from a full-blown tariff escalation to a negotiated resolution. This might include forecasting financial impacts under different tariff levels and having “trigger plans” for each (e.g. steps to take if tariffs double vs. steps if tariffs are lifted). As the B.C. Chamber CEO put it, companies must “rely on [their] skills again while focusing on what [they] can control.” That means staying nimble: be ready to pivot operations or redeploy resources on short notice. Many firms learned during the pandemic how to operate with agility, and those lessons are invaluable now. Encourage your leadership team and managers to regularly review and update action plans as new information emerges. Don’t assume the situation will resolve on a single timeline - be prepared for twists, like temporary tariff exemptions or sudden increases, and build those into your plans.

Optimize Costs and Preserve Cash Flow: Tighter cost management can help weather the storm. Scrutinize budgets for non-essential spending that can be paused. Consider deferring large investments or expansion plans until the outlook clarifies. It’s also wise to bolster liquidity - for instance, drawing on credit lines or building cash reserves - in case sales dip or input costs spike. “Reduce costs where possible,” advises Ms. Fiona Famulak of the BC Chamber. Some businesses are taking creative steps to protect margins. One Edmonton-based catering company created a dynamic cost-tracking system for its 100 most-used ingredients so it can implement a “tariff surcharge” on customer orders if input costs jump unexpectedly. This kind of responsive pricing strategy, while a last resort, can help a company survive by passing through some costs transparently. The key is to be proactive - identify pressure points in your cost structure and address inefficiencies now, so you have a buffer if conditions worsen.

Diversify Supply Chains and Markets: The tariff conflict is a stark reminder about over-reliance on any single trade partner. Wherever feasible, explore alternative suppliers outside the U.S. for critical materials or inventory - or source more domestically. Even if U.S. suppliers remain your primary partners, having secondary sources (in Canada or other countries) can reduce your vulnerability to tariff or border disruptions. Likewise, consider diversifying your customer base and export markets. If your growth strategy was heavily U.S.-focused, you might ramp up marketing in Europe or Asia to open new streams of revenue. Government trade promotion agencies like Export Development Canada can assist in identifying new market opportunities. In the long run, a more diversified trade footprint will make your company less exposed to any one country’s policies. Also, take advantage of trade agreements beyond NAFTA/USMCA - for example, Canada’s deals with the EU or CPTPP partners - to offset U.S. volatility. Many Canadian firms have responded by ensuring their products qualify under USMCA rules, sidestepping U.S. tariffs altogether. By May, about 90% of Canadian exports to the U.S. were USMCA-compliant and thus exempt from Trump’s tariffs (source: reuters.com). This underscores how adapting your supply chain (e.g. using more North American content in manufacturing) can directly protect your business. Similarly, some exporters have pivoted to ship more volume to other countries - Canada’s exports to the U.S. as a share of total exports fell from 78% to 68% between mid-2024 and mid-2025, reflecting efforts to cultivate alternative markets. Diversification can be challenging and not immediate, but even incremental steps can reduce risk.

Leverage Government Support Programs: Ensure you take full advantage of relief measures offered by Canadian authorities. Both federal and provincial governments have introduced support to help companies and workers affected by the tariffs. For example, the federal government temporarily waived the one-week Employment Insurance waiting period for layoffs linked to the trade dispute and loosened EI rules so that severance payouts don’t delay benefits (pm.gc.ca) - this can soften the impact on employees if you absolutely must implement temporary layoffs.

Business owners should also note the tax deferrals in place: corporate income tax payments and GST/HST remittances that became owing in the spring were deferred to June 30, 2025, providing up to $40 billion in liquidity to Canadian businesses. Additionally, new federal financing facilities and increased funding to regional development agencies are being deployed to support companies through this crisis. As the situation evolved into late summer, further support initiatives have been rolled out. In August, Ottawa set up an “Electric Vehicle Production Incentive” allowing automakers that keep building in Canada to import a quota of U.S.-made vehicles tariff-free (despite Canada’s retaliatory auto tariff) - effectively rewarding companies for not offshoring production. And in early September, the federal government unveiled a comprehensive aid package dubbed the “Strategic Response Fund”, which includes $5 billion to help firms hit by U.S. tariffs, expanded loan guarantees for small and medium enterprises, and a reskilling program for up to 50,000 affected workers (source: globalnews.ca). Certain industries are getting tailored assistance; for example, a $370 million support package was announced for canola farmers hurt by China’s retaliatory 75% tariff on Canadian canola. The government has also waived or adjusted regulations that could burden tariff-impacted businesses - it suspended the 2026 EV sales mandate that would have required auto manufacturers to sell a certain percentage of electric vehicles, recognizing that automakers needed flexibility while grappling with trade uncertainty. Likewise, Employment Insurance is being made more flexible with extended benefits duration for those laid off due to trade disruptions. Stay informed about programs like the Work-Sharing Program (which allows staff to work reduced hours while receiving partial EI, helping avoid layoffs) or any provincial grants for impacted industries. These supports can be critical lifelines to maintain operations and retain your workforce during tough times. If you’re not sure what aid might apply to your business, consult government websites or industry associations - new measures are being introduced as conditions change, so what wasn’t available a few months ago might exist now.

Maintain Open Communication with Stakeholders: Proactively communicate with your key stakeholders - including employees, suppliers, customers, and investors - about how your company is managing the tariff situation. Uncertainty is easier to tolerate when people are being kept in the loop. If you are adjusting orders or production schedules with suppliers, give them as much lead time as possible and collaborate on solutions. With clients, be transparent if you anticipate any delivery delays or need to adjust pricing due to tariff costs; many customers will be understanding if kept informed. Internally, engage your workforce (more on this in the next section) so they understand the steps being taken to navigate the challenges. Clear and frequent communication can preserve trust and confidence, which are invaluable in turbulent periods.

It’s also a good idea to scenario-test communications: have a plan for what you would say to employees or customers if, for instance, tariffs jump to a higher level overnight, or conversely if a breakthrough eliminates tariffs. By thinking these through in advance, you’ll be able to respond calmly and credibly when surprises occur. Finally, don’t overlook your investors or lenders - they will appreciate knowing that management has a handle on the situation. Regular updates about how the company is mitigating risks (without divulging sensitive details) can maintain credibility in the capital markets or with your bank, which might be crucial if you need financial flexibility.

Supporting Employee Well-Being and Financial Health

During uncertain times, an employer’s duty of care toward employees becomes even more critical. Supporting your employees’ well-being and financial health isn’t just a compassionate response - it can help maintain productivity and loyalty when external stresses are high. Canadian HR leaders should consider several approaches to bolster their workforce through the tariff conflict:

Leverage your Benefits and Assistance Programs: Remind employees of the resources available to help them cope with stress or financial strain. For instance, most group benefit plans include an Employee Assistance Program (EAP) - ensure your staff know how to access it. EAPs often provide counseling services and self-help resources on managing change, anxiety, and uncertainty. They may also offer financial coaching or wellness tools. These can be invaluable for employees struggling with money worries or emotional distress related to the volatile economy. Additionally, review if your health benefits cover services that could support mental health (such as psychology sessions) and promote these to your team. Some employers are enhancing benefits in response to inflation, such as increasing coverage limits or adding wellness days - any steps that reinforce your support will be appreciated by employees.

Provide Financial Education and Market Guidance: Many employees are anxious about their financial futures - whether it’s daily budgeting as prices rise, or the hit to their retirement investments from market swings. Employers can play a role in improving financial literacy and resilience. Consider organizing financial wellness workshops or webinars for your staff. Topics could include budgeting under inflation, strategies for managing debt, or understanding RRSP/TFSA investment basics. You might partner with your retirement plan provider or a financial advisor to host these sessions; in fact, your group retirement plan providers likely have ready-made resources on managing market volatility and retirement planning tools (e.g. online calculators, investment seminars) - tap into those. By equipping employees with education on how to adjust their financial plans, you help them feel more in control. For example, explaining the importance of staying invested for the long term despite short-term market dips can calm those worried about their pensions or RRSPs. If your plan offers one-on-one sessions with a retirement counselor, encourage employees to take advantage. Market education tools and impartial financial advice can go a long way toward alleviating the fear of the unknown. Employees who feel more confident about their personal finances will be less distracted at work.

Communicate Transparently and Often: In turbulent times, leadership visibility and honesty are paramount. Make it a priority to communicate regularly with your employees about how the company is responding to economic conditions. This could involve monthly town-hall meetings, weekly email updates from the CEO, or departmental check-ins - any format that suits your organization, as long as the communication is consistent. Share what you can about the situation: for instance, if the U.S. tariffs have caused your input costs to rise, you might explain that the company is implementing cost-saving measures (travel freezes, etc.) to avoid impact on jobs. If business is slowing, address the elephant in the room and reaffirm your commitment to your team’s job security whenever possible. Employees don’t expect leaders to have a crystal ball, but they deeply appreciate candor. Transparent communication builds trust and credibility. It also quells rumors - in a void of information, employees might assume the worst. By updating them frequently, you demonstrate that management is on top of the situation and caring for the staff’s interests. Even if the news is difficult (say, a necessary reduction in hours), delivering it with openness and empathy will foster a more resilient workforce. Encourage two-way communication as well: provide channels (surveys, Q&As, anonymous suggestion boxes) for employees to voice concerns or ideas. Making people feel heard is a powerful way to boost morale when external events make them feel powerless.

Also, celebrate small wins - did your team successfully secure a new non-U.S. client or find a cheaper supplier? Share that news. Reminding employees that their efforts are making a difference can counterbalance the drumbeat of negative headlines.

Finally, simply show empathy and flexibility. Understand that employees may be dealing with challenges at home - for instance, a spouse’s job could be affected by the tariffs, or they may be cutting personal spending as household expenses rise. Whenever feasible, offer flexibility: allow remote work or adjusted hours if that helps an employee manage stress or save costs (e.g. on commuting).

If an employee’s role is slow due to trade impacts, consider whether they could be temporarily reassigned to a busier area - this can provide them stability while supporting teams that need extra hands. A supportive work environment will strengthen employees’ loyalty and mental well-being. By fostering a sense of security and community at work, you buffer your team against outside uncertainty. Everyone is watching how leadership handles this crisis - by prioritizing your people, you’ll not only get through the storm but come out of it with a team that’s stronger and more united.

Managing Your Workforce Amid Tariff Conflict: Considerations for Canadian Employers