Canada faces a defining economic challenge. American tariffs are threatening the manufacturing base that has sustained communities across eastern Ontario for generations.
Factories are reducing production, workers are losing jobs and companies are reconsidering investment. The federal government must make Canadian manufacturing a national priority, pursuing two strategies simultaneously: accelerating negotiations to preserve access to our largest trading partner while investing in the long-term diversification and competitiveness of Canadian industry.
The critical distinction is time. Developing new export markets will take years; our manufacturers, their suppliers and the families who depend on them cannot necessarily afford to wait.
Eastern Ontario’s prosperity was built on manufacturing. Following the Second World War, companies including DuPont, Black & Decker, Procter & Gamble, Hershey and Alcan established substantial operations across our region. Their investments created thousands of well-paid jobs and supported generations of families, generating opportunities for local suppliers, contractors, transportation companies and countless small businesses.
Canada’s postwar economic success rested partly on a practical understanding of geography and trade: we developed domestic industrial capacity while securing access to the enormous American market. The 1965 Auto Pact and subsequent trade agreements deepened continental integration, allowing Canadian manufacturers to participate in supply chains essential to our prosperity. Today, that relationship is under threat.
The consequences are already apparent. In September, Novelis announced reductions affecting approximately 80 employees at its Kingston aluminum facility, directly attributing reduced production to American tariffs. INVISTA closed its Maitland chemical facility last year, affecting approximately 100 jobs, and subsequently announced further layoffs in Kingston.
Although these corporate decisions have different underlying causes, they illustrate the vulnerability of eastern Ontario’s industrial economy. Every lost manufacturing job has consequences extending well beyond the factory: industrial employment supports relatively productive, well-paid work and creates demand for suppliers, transportation companies, contractors, engineering, retailers and municipal services. When a plant reduces production, an entire regional economy feels the effects.
The broader economic threat makes preserving that industrial base urgent. The Bank of Canada has warned that American trade restrictions are reducing Canadian exports, investment and potential economic output. Its January outlook projected that Canada’s GDP would be approximately 1.5 per cent lower by the end of 2026 than anticipated before the tariff shock.
This is not simply a trade dispute; it threatens productivity, wages and ultimately our standard of living. The federal government’s response must recognize an uncomfortable economic reality: we cannot rapidly replace the American market.
In 2025, the United States purchased 71.7 per cent of Canada’s merchandise exports. For Eastern Ontario manufacturers producing aluminum, steel, chemicals, machinery, electrical cable and fabricated products, American customers frequently represent years or decades of commercial relationships.
Anyone who has built a manufacturing business understands that developing new customers is expensive, demanding and time consuming. New markets require distribution networks, product certification, regulatory compliance, technical qualifications, competitive pricing and trusted commercial relationships.
Major industrial purchasing decisions frequently involve qualification and procurement cycles measured in quarters or years. Winning a new customer does not necessarily replace the production volume, established supply chains or economies of scale associated with an existing American account.
Geographic proximity, integrated transportation infrastructure and decades of continental investment provide commercial advantages that cannot simply be re-created overseas. Diversification is essential, but it is a long-term industrial strategy, not an immediate substitute for the United States.
The first priority must therefore be accelerated negotiations with Washington. Canada needs a durable agreement that restores predictable market access and protects Canadian production, investment and employment. Negotiation does not mean capitulation or accepting every American demand. It means recognizing that preserving our existing industrial economy is fundamental to Canada’s national interest.
Confusing diversification with an immediate replacement for American business risks sacrificing productive Canadian companies before alternative markets can sustain them.
The second priority must be a comprehensive manufacturing strategy. Canada should accelerate diversification into European and Asian markets, remove interprovincial trade barriers, strengthen domestic supply chains and use infrastructure and defence procurement to support Canadian industrial capacity.
Public investment should encourage automation, productivity, research and development, and the growth of Canadian-owned manufacturers. The Corridor already has companies demonstrating that industrial growth is possible. Northern Cables, Canarm, Greenfield Global, Burnbrae Farms and HFI Pyrotechnics represent opportunities across electrical manufacturing, HVAC equipment, renewable fuels, food processing and defence-related production. Federal industrial policy must address the needs of manufacturers prepared to invest, expand production, enter new markets and create Canadian jobs.
This requires more than temporary tariff assistance. Growing manufacturers need investment capital, competitive energy costs, skilled workers, modern infrastructure and practical support for market development. Equally important, we must preserve established industrial sites, their infrastructure and the skilled workforces that make future investment possible. Canada cannot build a stronger manufacturing economy by allowing its existing industrial capacity to deteriorate while waiting for new markets to materialize.
The stakes extend directly to our standard of living. Manufacturing generates productivity, supports skilled employment and creates the economic activity required to sustain wages, public services and prosperous communities. Once production mandates, specialized workforces and capital investment move elsewhere, recovering them becomes extraordinarily difficult.
Canada must negotiate now to preserve the markets and jobs that sustain our economy, while diversifying and investing to reduce our vulnerability over time. These are complementary objectives, not competing choices. Our greatest risk is allowing today’s trade disruption to become a permanent loss of Canadian industrial capacity.
We cannot build tomorrow’s manufacturing economy by sacrificing the one we have today. Canadian manufacturing must become a national priority, and the federal government must pursue both strategies with equal determination.
Charlie Mignault
Commissioner
St. Lawrence Corridor Economic Development Commission
