Canadian exporters, fearing border tax, scramble to shift production
(This story corrects title of Vladimir Budker to financing consultant, not chief executive, in paragraph 13)
By Andrea Hopkins
OTTAWA (Reuters) - Canadian exporters are scrambling to find ways to avoid a potential 10 percent import tax promised by U.S. President-elect Donald Trump, including the possible shifting of production or supply lines south of the border.
Amid warnings from the Bank of Canada on Wednesday that protectionist policies brought in by Trump could drive companies to invest in the United States rather than Canada, executives said their search for options has already begun.
Canadian exporters are not alone, with global business leaders talking up the benefits of local production to shield themselves from criticism from Trump, who will be sworn in as president on Friday.
"We're a Canadian company, we like to build things in Canada and export them ... but you can't sell stuff and not make money," said Jim Rakievich, chief executive of Edmonton-based McCoy Global, which makes oil and gas industry equipment.
"We could move our production down into the U.S. fairly quickly, we could absorb that production (in our U.S. plants) if we had to."
National Bank Financial estimated a 10 percent border tax could cause Canada's total goods exports to the United States to drop by about 9 percent, with non-petroleum goods sinking almost 11 percent.
Exports are expected to drive about a third of Canada's economic growth in 2017, behind only consumption and government spending, according to the Bank of Canada's forecast this week. The United States is Canada's largest export market with about 74 percent of all goods heading south. Continued...