CME calls for urgent action to protect Canada’s manufacturing sector from U.S. tariffs

Canadian Manufacturers & Exporters (CME) president and CEO Dennis Darby has sent a letter to Prime Minister Trudeau and federal party leaders urging immediate action to protect Canada’s manufacturing sector from the imminent threat of U.S. tariffs.

CME notes in a press statement that Canada’s manufacturing sector is the backbone of the country’s economy, supporting more than one in four jobs in Canada and driving more than 60 percent of its merchandise exports. If U.S. tariffs proceed, they will present an immediate and severe risk to thousands of businesses and workers across the country.

CME shares that without swift and targeted government action, these tariffs will devastate investment, disrupt supply chains and weaken Canada’s industrial base. CME is calling for urgent government intervention to provide short-term tariff relief, investment incentives and supply chain support to help manufacturers weather the economic shock. This crisis has also reportedly highlighted the need for long-term structural reforms to enhance Canada’s competitiveness, including the elimination of internal trade barriers and modernizing Canada’s regulatory and tax frameworks.

CME further adds that Canadian manufacturers stand ready to work with policymakers and parliamentarians to develop solutions that protect jobs, reinforce supply chains, and position our sector for long-term success. Decisive leadership is needed to safeguard Canada’s economy and manufacturing future.

In the letter to the Prime Minister, Darby writes:

“To mitigate, the immediate  shock and support manufacturers, the following relief measures may be necessary: 

• Short-Term Tariff Relief – Implement a short-term federal cost-coverage mechanism (of at least three months) to offset the immediate impact of tariffs on Canadian exporters, preventing rapid relocations and allowing negotiations to proceed without causing major job losses and supply chain disruptions. Funding could be supported by revenues from counter-tariffs or export taxes.  
• Investment Incentives & Reshoring Support – Take a proactive approach by introducing incentives to encourage manufacturers to proceed with planned investments and re-shore production to Canada. This could include matching the Ontario Made Manufacturing Investment  Tax Credit (OMMITC) with higher limits and providing low-cost loans to stimulate investments that strengthen domestic supply chains and long-term competitiveness.
• Leverage Existing Federal Programs – Accelerate or unlock additional funding within existing programs to support productivity-enhancing investments, ensuring manufacturers remain globally competitive amid heightened trade uncertainty. 
• Tax Relief Measures – Introduce corporate deferrals to improve short-term cash flow, freeing up funds for operations, wages, and supply chain adjustments.  
• Work-Sharing Program – Implement special measures under the Employment Insurance Work Sharing Program to help employers and employees avoid layoffs.  
• Supply Chain Support – Assist businesses in identifying alternative suppliers and markets, while expanding trade facilitation services to support rapid export diversification efforts.”