Prepare the tariff contingency plans

Here’s the Atlantic news we’re tracking this week, including provincial plans to ease tariff burdens,?a fight with China over EVs and lobsters, and some Atlantic Loop progress.?

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Rolling out the contingency plans

Whiplash. noun: 1. injury caused by a severe?jerk?to the head, typically in a?motor-vehicle?accident. 2. The effect on Canadian business of Donald Trump’s on again/off again tariff policy.??

Last week brought another month-long reprieve from the U.S. President’s planned 25 percent tariffs on Canadian goods, or at least a partial break. Goods covered by the existing North American free trade agreement, the USMCA, will be exempt from tariffs; that’s about 40 percent of Canada’s trade, although a good deal more is technically compliant if exporters fill out the required paperwork.??

The U.S. still plans to push ahead with 25-percent tariffs on steel and aluminum today (March 12), and with “reciprocal” tariffs on April 2 on goods that other countries have tariffs or non-tariff barriers on and import from the U.S.??

Canada will maintain the tariffs on $30-billion worth of U.S. goods that it announced last week, but will hold off on a second wave until it’s clear where all this might land.??

If it ever becomes clear. “The one month, one month, one month, it’s incredibly mean-spirited,” Nova Scotia Premier Tim Houston said. “We can’t live for four years one month at a time. I’m hopeful that the tariffs come off and the president realizes the damage he’ll do to the American economy and the Canadian economy.”??

Last week, Atlantic premiers concentrated on how they will handle the damage done by a full-on trade war. Houston offered some details on what the $200-million contingency fund his province has set aside might be used for: “We’re looking at options like [employment insurance]?top-ups, like buying goods from cancelled projects and retraining options” for workers. If more money is needed, he promised, “we’ll put more there.”??

Newfoundland and Labrador announced its own $200 million?in contingency funds to finance tariff relief measures. Finance Minister Siobhan Coady said the province has its “elbows up,” and there would need to be “flexibility with liquidity for companies who will have some challenges in inventory.” She suggested some specific measures for the fisheries industry might be on their way.??

P.E.I.’s Finance Minister, Jill Burridge, said the province’s next budget would include a contingency fund to be used for tariff response initiatives but did not say how much money it would commit. P.E.I. Premier Rob Lantz said his province would double the number of trade missions it conducts to promote P.E.I. exports and launch an export diversification fund to provide grants to cover marketing, travel and advertising costs to companies looking to expand exports to other markets. It also announced a program to provide “relief loans” to companies of up to $500,000 at 4 percent interest.?

New Brunswick unveiled its $162-million “action plan” that included $40 million to help large exporters increase productivity and diversify markets, another $30 million in supports for businesses and $33 million for laid off workers.?

Donald Trump’s trade war attack represents an existential threat for Canada. It has also brought into sharp focus our pressing challenges: Canada’s dependence on America, our lagging productivity, our unattractive investment climate.?

On April 24, PPF will bring together Canada’s top economic and public policy experts at Growth Summit 2025. The event will?focus on how to urgently unlock Canada’s potential to safeguard our country’s global competitiveness — and our own standard of living — in these extraordinary times.

Head to ppforum.ca to see the agenda and to register.?

Caught in the crossfire

As if Trump’s tariffs were not a big enough headache, China announced on the weekend it was putting tariffs on $3.7-billion worth of Canadian agricultural and food products, including lobster from Atlantic Canada.??

Nova Scotia lobster exporters told Saltwire they’d heard from buyers in China that a 25 percent tariff will take effect March 20. Lobster is Nova Scotia’s second largest export — at $1.02 billion worth in 2024 — and roughly 40 percent of the province’s live lobster exports go to China.??

“The news on tariffs out of Washington seems to change daily, even hourly,” said Stewart Lamont, owner of Tangier Lobster. “But China is different. They are disciplined. They don’t walk back a decision easily.”?

China’s Ministry of Commerce said the tariffs were in response to Canada’s move last year to impose tariffs of 100 percent on electric vehicles coming in from China, and 25 percent on Chinese steel and aluminum.??

The tariffs “seriously violated the rules of the World Trade Organization” and “damaged China’s legitimate rights and interests,” the statement said.??

The EV tariffs mirrored those imposed by the U.S. on China, and were put in place after consulting the Biden administration. The Trump administration has encouraged Canada to keep tariffs in place against China and match any new ones it imposes — proof, if any were needed, that’s there no winning an international trade war.??

Free beer (almost)

There was significant progress made last week on dropping interprovincial trade barriers, seen as a means to foster economic growth and blunt the impact of U.S. tariffs.??

Federal internal trade minister Anita Anand announced an agreement that would see the provinces and territories review their exceptions under the Canada Free Trade Agreement (CFTA) to see how many they can eliminate by June 1, and to develop a Canada-wide credential program by that same date. The two levels of government will also begin negotiations to have financial services covered by the CFTA.?

Since booze is the bellwether of progress on free trade between the provinces, it got most of the attention. Almost all provinces, said Anand, had agreed to remove barriers to alcohol sales from out-of-province, meaning New Brunswick wine connoisseurs could buy Okanagan product and breweries, wineries and distilleries could ship direct-to-consumer sales in some jurisdictions within weeks. “This is unprecedented action to reduce trade barriers in Canada,” the internal trade minister told CBC News.?

Though not in P.E.I. or Newfoundland and Labrador. In the latter case, only beer brewed in the province can be sold in convenience stores or gas stations. Unions representing workers at the Molson Coors and Labatt breweries in St. John’s have said in the past they would likely close if any change was made, which would mean about 200 job losses.??

“We don’t want to have unintended consequences,” said Finance Minster Siobhan Coady, defending the protectionist measure. “We have two breweries in this province and we don’t want to impact the workers or the manufacturing of those products here in Newfoundland and Labrador.”?

P.E.I. just hasn’t come to a decision as yet. The province has no big national brewers to protect, but Finance Minister Jill Burridge said the province “had requested some time to have conversations with stakeholders.”?

Another cross-border power play

The Atlantic Loop, an ambitious megaproject meant to carry electricity around Atlantic Canada and through Quebec, was abandoned in 2023 as unviable, but bits of it are getting built. The latest is a new 160-km electrical transmission line that will run parallel to existing lines between Onslow, N.S. and Salisbury, N.B. The Canada Infrastructure Bank (CIB) announced last week it is pouring $217 million into the project.??

The structure of the deal is complicated. The CIB and Nova Scotia Power will be equal partners in a regulated utility company that will build, own and operate the Nova Scotia portion on the line. It will also pay for the New Brunswick section, which will be built, owned and operated by New Brunswick Power.??

The project carries an estimated price tag of $800 million, though Nova Scotia Energy Minister Trevor Boudreau said he expected it to come in at less than that. NS Power said the CIB deal would save ratepayers $200 million compared to traditional financing.??

Once Nova Scotia’s energy regulator approves the project, CIB will then provide a loan to the Wskijinu’k Mtmo’taqnuow Agency (WMA), co-owned by 13 Mi’kmaw bands in Nova Scotia, to allow it to take an equity stake in the project.??

Glooscap Chief Sidney Peters said the deal would provide “long-term”?financial returns for the 13 Mi’kmaw communities in the agency and assure they are “part of the decision making and economic benefits. ... For too long, Indigenous communities have been left out on the sidelines of major infrastructure projects. That is changing.”??

New Brunswick First Nations are negotiating a similar arrangement. The transmission line will be called the Wasoqonati Reliability Intertie — Wasoqonati meaning “illuminate” or “keep light on” in the Mi’kmaw language.?

Boudreau said the connection is “critical” to the province’s plan to have 80 percent renewable electricity by 2030, and to assure reliability with access to “the larger North American grid that we can lean on in times of stress.” His New Brunswick counterpart?René?Legacy was more focussed on the energy self-sufficiency in light of current Canada-U.S. relations: “This is the right answer. The best method for us to retaliate or defend ourselves is to take care of each other, to take care of home.”??

Towers for power

Everwind Fuels, the company pitching a massive wind-powered green hydrogen project in Cape Breton, has added an electrical transmission line across the Strait of Canso to its plan. The line would bring electricity from a wind power substation on the mainland to the hydrogen/ammonia plant at Point Tupper. It would be just 1.5-kilometres long, but feature special transmission towers 210 metres high, or more than twice as tall as those on the Macdonald Bridge in Halifax, so that ships can pass underneath.??

Everwind filed an environmental assessment for the new line last week, detailing how it would handle mitigation and monitoring of its effects on land use, fish and wildlife, and assuring it could handle any extreme weather it would face. The wind farms to feed the project are all located onshore, and have had their environmental assessments approved.??

Offshore wind power looks to be in for a bumpier ride. Nova Scotia wants 5 gigawatts of offshore wind energy in place by 2030, and expects to hand out the first licences. But there won’t be any turbines placed on the George’s Bank, a rich fishing ground off the southwest shore of the province. Nova Scotia and the federal government have told their joint offshore energy regulatory board to put a moratorium in place on offshore wind power development there, similar to the ban in place on oil and gas development.??

Premier Tim Houston has mused about lifting all bans on natural resources development in the province, but it’s clear the George’s Bank is different. “It’s a very lucrative fishing bank, has an incredible resource there that we’re utilizing to its full potential,” said Nova Scotia Energy Minister Trevor Boudreau, “and this is about saying?that’s where we’re focused on?is that sector in that area.”??

The long good-bye?

The practice of hiring “travel nurses” to plug holes in the overburdened public health system seems to be truly winding down.??

Last week The Globe and Mail reported that Vitalité Health Network, New Brunswick’s francophone health authority, told nurses working for Canadian Health Labs their services were no longer required. Its contract with the agency is still in place, and will be until next February, but the nurses were told not to show up for work.??

Local health authorities across Canada made extensive use of agency nurses during the pandemic due to staffing shortages, but the practice was particularly controversial in New Brunswick and in Newfoundland and Labrador when it emerged the companies were being paid as much as $300 an hour for their services, or six times what a regular staff nurse would make.??

In some cases, the provider was found to be charging for meal allowances that weren’t forwarded to the workers.??

Vitalité has said its $100-million deficit last year was largely due to its reliance on travel nurses, and its vice-chair told a board meeting in January that $44.2 million of the $52.1 million in red ink it’s run up in the first half of the current fiscal year is related to travel nurses.??

New Brunswick Premier Susan Holt has said she wants the contacts stopped.??

It’s proving a bit of a messy divorce, however. Vitalité acknowledged last week the contract is still in place. CHL said it was in full compliance with the terms of the contract, and was simply told the health authority was stopping deployment for 30 days. In an email to staff, CHL said “our preferred path forward is to restore the previous schedule.” Holt declined to get into details, noting that “Vitalité has been taking aggressive action to get us out of a bad contract.” The health authority says a “weaning plan” has cut the use of travel nurses “significantly” and will put an end to it by February 2026.?

In Newfoundland and Labrador, acting Health Minister John Haggie?gave assurance that his province was taking action too. The province recruited 1,133 nurses between April 2023 and December 2024, and 95 percent of last year’s nursing graduates remained in the province. The number of travel nurses is down 42 percent from its peak, he said, “and that trajectory downwards continues. We are committed to reduce our reliance on them to an absolute minimum.”?

By Mark Stevenson

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