The new US administration’s tariffs are causing global uncertainty. This week, we highlight key insights on mentions of Canada and U.S.-Canada tensions beyond tariffs. Executives across industries, from metals to healthcare, have addressed the issue on recent earnings calls.

Read more about our previous analysis: Most executives upbeat after Trump election

Steel Industry Struggles

Alcoa Corp $AA warned that Trump’s proposed 25% tariff on Canadian imports would hurt its Quebec smelters. It expects trade flows to shift, with Canadian metal rerouted to Europe and other countries. Even in the most extreme tariff scenario, AA anticipates only a modest impact on its 2025 cash flows, citing supply chain adjustments and the strengthening of the US dollar against the Canadian dollar (Q4’24; Jan 22).

The Canadian Steel Producers Association reports that Canada and the U.S. trade $20 billion in steel annually, with 40% of Canada’s steel imports coming from the US.The law firm Gowling WLG estimates that the steel industry supports 23,000 Canadian jobs.

AA also believes that this 25% tariff could represent $1.5-2.0B additional annual cost for the US, hurting the US transportation supply chain and industrial competitiveness, specifically the automotive market.

Despite negative industry impact, the 25% tariff on steel and aluminum imports took effect Tuesday, March 11. Next day, the Canada Metal Processing Group, part of the US A&D firm HEICO Corp ($HEI), announced layoffs of 140 workers across three Ontario and Quebec facilities, citing declining demand and tariff uncertainty. Ivaco Rolling Mills in L'Orignal, eastern Ontario, bears the largest impact. Of its 472 employees, 30 received permanent layoffs, and another 120 were temporarily furloughed (CTV news).

Canadian Market Exit

Blade Air Mobility ($BLDE) exited Western Canada in Q3 2024, calling it unprofitable. The CEO criticized Canada’s market potential despite prior expansion efforts, noting that this exit accelerated its path to profitability (Q3’24; Nov 12, 2024).

This greatly contrasts the firm’s bullish stance in 2023 when it reported “robust growth in Canada,” with revenue increasing 65% YoY. Management then described Canada as “a profitable contributor to our short-distance business” (Q1’23; May 11, 2023).

Immigration Policy Headwinds  

Flywire Corporation ($FLYW) cited Canada’s student visa caps and India-Canada tensions as reasons for its $30M revenue shortfall, with Canadian revenue down 35%. It has to diversify beyond this core market and is now focusing on Europe and Australia. (Q4’24: Feb 25). The company continues to see pressure in Canada as of March (Industry conference; March 5).

On a positive note, FLYW expects to benefit when the Canadian market stabilizes and returns to growth. Canada remains a key market for the company, with significant opportunities to acquire new accounts, expand existing relationships, and upsell solutions.

Regulatory Frustration in Pharma 

Aytu BioPharma ($AYTU) recently announced a deal with Lupin Canada but criticized Canada’s slower approvals compared to Israel’s. The CEO acknowledged the delays but reaffirmed their commitment to the country’s $1 billion ADHD market (Q1’25: Nov 13, 2024).  

Energy Sector Defies Uncertainty

On a brighter note, Ovintiv ($OVV) has doubled down on Canadian LNG expansion projects despite US regulatory uncertainty. As LNG Canada comes online this year, management expects Western Canada’s gas supply and demand fundamentals to improve.

OVV has strategies to offset potential tariffs. It sells natural gas condensate domestically in Canada, maintains investment-grade status, and has a strong gas resource base. The company positions itself as Western Canada’s preferred gas provider for projects such as data centers and petrochemicals. It also expects a stronger USD, favouring its free cash generation (Q4’24: Feb 27).

Other Notable Mentions

• Molson Coors ($TAP) successfully launched Miller Lite in Canada, while Coors Light remains the country’s "#1 light beer" amid US brand struggles. (For our Canadian readers: Molson Canadian is produced by the Canadian division of this US conglomerate). 
• Sysco Corp ($SYY) holds a 25% market share in Canada, with regional sales growing 5% last quarter. It forecasts a 2% US inflation but has not factored in potential tariff impact due to uncertainty.
• Custom Truck ($CTOS) sourced 30% of its 2024 chassis from Mexico and Canada. Management remains watchful but does not see tariffs as a crisis.