Winnipeg’s diversified economy less prone to tariff shock: report

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This article was published 13/02/2025 (259 days ago), so information in it may no longer be current.

Winnipeg is better positioned than other Canadian cities to withstand tariffs threatened by U.S. President Donald Trump, says a report by the Canadian Chamber of Commerce.

“Winnipeg appears to be relatively less exposed than most Canadian cities to U.S. tariffs first and foremost because its exports are much more diversified than most cities,” said Stephen Tapp, the chamber’s chief economist.

The chamber’s business development lab created an interactive tool to show how export-dependent Canada’s biggest cities are based on data on goods exported to the U.S. (in values, per capita, as a share of GDP, and a share of total exports), the number of exporters to the U.S., as well as the latest gross domestic product and population statistics.

Trump’s promised tariffs, including 25 per cent on all Canadian non-energy exports and a 10 per cent tariff on energy exports to the U.S., starting in March, are expected to cause major economic disruption to the global economy. The national business group studied which Canadian cities would be most affected.

Winnipeg is near the bottom of the list — 38th out of 41 cities, Tapp said Thursday.

“Just over one-third (34.5 per cent) of Winnipeg’s exports went to the U.S. in 2023, which is far below the 76 per cent national average,” he economist said.

“In addition, Winnipeg’s economy is almost half as trade intensive to the U.S. — 10 per cent of GDP versus 18 per cent for Canada,” Tapp said.

“For these reasons, Winnipeg comes out are relatively well situated, unlike some other local economies where exports are high and they are almost entirely concentrated in the U.S. market,” Tapp said.

The cities ranked most vulnerable because they would be the hardest hit by Trump tariffs are those that rely on energy exports: Saint John, N.B. — home to Canada’s largest refinery of crude oil that exports 80 per cent of it to the U.S. — and Calgary, a major energy hub that exports crude oil and natural gas to the U.S. Midwest.

“I think Winnipeg should take some solace and comfort in knowing our diversity has been a strength of our economy for a very long time,” said Winnipeg Chamber of Commerce president Loren Remillard.

“It’s not ideal when everything’s booming, but during times of difficulty like this, it is definitely something that will help,” Remillard said. “What the study does demonstrate is the benefits of the diversity of our economy,” he said Thursday.

Winnipeg may be less vulnerable, but Trump’s tariffs could still cause major pain, the mayor’s office said.

“Winnipeg’s economy is diverse, but that doesn’t make us immune,” Mayor Scott Gillingham said in a statement Thursday.

“If key employers in manufacturing, aerospace, or agriculture take a hit, the shock waves will be felt across the entire city,” he said. “We can’t afford complacency. The city will look at what we can do to protect those jobs and the industries that depend on them,” Gillingham said.

Chuck Davidson, president of the Manitoba Chambers of Commerce, said although Winnipeg has a diversified economy, 72 per cent of Manitoba exports are shipped to the U.S.: “whether that’s from Winnipeg or Winkler or Steinbach.”

“It doesn’t just impact the manufacturing company, it also impacts the companies that would do business with that manufacturing company, whether it’s food production (or) cleaning services. There’s all sorts of spinoffs of other companies that are attached to these as well that are impacted,” Davidson said.

Jesse Hajer, an economics professor at the University of Manitoba, said the focus on cities’ vulnerability to tariffs misses the point.

“Looking just at cities… downplays the role of agriculture and the fact that cities in agriculturally intensive regions benefit from spin-off economic activity arising from agriculture,” he said.

“The key issue is how dependent is your economy on U.S. exports, and Winnipeg is average in this respect,” he said.

On a Zoom call from Washington, D.C. Thursday, following a trade mission by Canada’s premiers and territorial leaders, Premier Wab Kinew told reporters it’s his job to stand up for the economy and jobs throughout the province.

“We want everyone to succeed,” he said when asked about Winnipeg’s ranking.

Trump said Thursday the U.S. will impose further tariffs on any retaliatory tariffs Canada imposes. Tariff threats are “creating havoc for so many businesses,” Remillard said.

“The diversity of our economy is a positive thing, but it won’t account for the consumer confidence dropping considerably — if people feel anxious about their job security and their ability to have disposable income to spend,” he said.

“It’s why we’re also very pleased to see that people are really rallying around the ‘shop local, shop Canadian’ themes. That is one way that stimulates and maintains that consumer confidence that’s going to be so vital for us to get through these difficult times.”

carol.sanders@freepress.mb.ca