Ontario’s rural municipalities are beginning to prepare for the potential financial impact of escalating tariffs between Canada and the United States, although it remains unclear just how much the additional costs will ultimately be.
Christa Lowry, chair of the Rural Ontario Municipal Association, says municipalities will not be immune from the effects of tariffs, even as much of the public discussion has focused on rising prices for groceries and other consumer goods:
Lowry says municipalities are starting discussions about how they can prepare, but there are still plenty of unknowns about how the situation will unfold.
Tariffs on imported goods can increase municipal costs, reduce revenues and disrupt supply chains. A report from the Association of Municipalities of Ontario identifies electrical equipment, steel and diesel as posing the greatest financial risk to Ontario municipalities because of their reliance on U.S. imports.
For municipalities, the impact could become particularly noticeable when major purchases or infrastructure work are required.
Lowry says the potential costs are something municipalities need to be planning for now:
The tariffs could affect municipalities across Ontario in a number of ways, from the cost of equipment and fuel to the expense of maintaining and repairing roads and other infrastructure.
While it is too early to determine the overall financial impact on municipal budgets, Lowry says it would be unrealistic to assume municipalities will avoid the effects of the escalating Canada-U.S. trade tensions.
Municipalities will therefore be watching both tariff developments and their impact on supply chains and costs as they plan future purchases and infrastructure projects.
Written by: Cindy Clyne
