With the U.S. government implementing tariffs on Canadian goods as of March 4, 2025, the Canadian retail sector is bracing for economic turbulence. Diane J. Brisebois, President and CEO of the Retail Council of Canada (RCC), has been at the forefront of discussions, advocating for Canadian retailers while navigating a complex and rapidly evolving trade environment.
Since the first rumours of a trade dispute surfaced, the RCC has been actively working with the Canadian government, industry associations, and retailers to mitigate the fallout. “We’ve been working closely with retailers to understand the potential impact of retaliatory tariffs,” Brisebois stated. “The economic stakes are high, with the first wave of counter-tariffs covering approximately $30 billion in goods, and an additional $120 billion in products potentially facing higher costs in the coming weeks.”
Canadian Retailers Face Supply Chain Challenges
Retailers across multiple categories—including grocery, pharmacy, apparel, and home goods—are being forced to adapt to the new economic landscape. According to Brisebois, one of the primary concerns is the availability of alternative suppliers outside the U.S.
“Certain products imported from the U.S. simply have no other available source,” she explained. “We are working closely with our members to identify supply chain alternatives, but it’s not as simple as flipping a switch. Retailers need to negotiate pricing, secure production capacity, and ensure reliable delivery timelines.”
The RCC has been engaging in high-level discussions with federal officials to advocate for exemptions on essential goods that cannot be sourced elsewhere. “We saw similar efforts during COVID when we worked to ensure continued supply of critical products such as baby formula and over-the-counter medications. The goal now is to minimize disruptions where possible.”
Retailers Caught in a Pricing Dilemma
Beyond supply chain concerns, Canadian retailers are grappling with a tough decision: whether to absorb additional costs or pass them on to consumers already dealing with inflation and a high cost of living. The situation is further complicated by the declining value of the Canadian dollar against the U.S. dollar.
“For many retailers, products are purchased in U.S. dollars, which means every fluctuation in currency impacts pricing,” Brisebois noted. “With the dollar at one of its lowest points, tariffs will only add more financial pressure.”
This issue is exacerbated by limited consultation from the U.S. before implementing tariffs. “There was no meaningful process to request exemptions or discuss the economic impact,” she said. “Retailers now have to make rapid adjustments without much government support.”
The De Minimis Debate: A New Front in the Trade War
Another key issue is the potential elimination of the de minimis exemption, which allows duty-free shipments of low-value goods from foreign retailers. The U.S. has hinted at reconsidering its de minimis threshold, which currently stands at $800 USD, after recognizing that foreign e-commerce giants such as Shein and Temu are leveraging the rule to flood the market with duty-free imports.
“We fought hard during the USMCA negotiations to keep Canada’s de minimis level low,” Brisebois explained. “The U.S. argued it should be higher, but now they’re seeing the unintended consequences. It’s ironic that they are reconsidering their position.”
Interprovincial Trade Barriers: A Hidden Challenge for Retailers
While much of the trade discussion focuses on international relations, another significant challenge for Canadian retailers is the presence of interprovincial trade barriers. Brisebois pointed out that restrictions between provinces continue to complicate business operations, despite Canada being a single national market.
“Imagine running a retail chain with stores in multiple provinces and facing different regulations for packaging, labeling, and product distribution,” she explained. “Retailers constantly navigate these inconsistencies, which increase costs and limit efficiency.”
For example, differences in recycling and waste management policies between provinces can make it difficult for retailers to implement standardized product packaging. “A product label that meets regulations in Ontario may need to be altered to comply with rules in Quebec or British Columbia,” Brisebois said. “This adds unnecessary complexity at a time when retailers are already under immense pressure.”
The RCC has been actively advocating for a reduction in interprovincial trade barriers, arguing that harmonized policies would strengthen Canada’s domestic economy. “As we work to encourage retailers to source more products locally, it is critical that our own internal trade systems do not create additional obstacles,” she noted. “If we want Canadian businesses to thrive, we need a more streamlined regulatory framework.”
Government and RCC Advocacy Efforts Continue
The RCC has been actively engaging with both Canadian and U.S. officials in an effort to mitigate the fallout from the trade war. Brisebois confirmed that RCC representatives will be traveling to Washington, D.C. this week to meet with policymakers.
“Our goal is to support the Canadian effort to avoid tariffs altogether, but if that is not possible, we want to ensure that tariff exemptions, remissions, and compensation processes are fair and efficient for retailers,” she said. “We are also providing direct assistance to our members who need guidance on navigating these changes.”
Canadian Retailers Remain Resilient Despite Challenges
Despite the uncertainty, Brisebois emphasized that Canadian retailers remain resilient and adaptable. “Retail is about finding solutions. If you’re not looking for opportunities within challenges, you’re not in the right business,” she said.
However, she acknowledged that many retail executives are still processing the unprecedented nature of the situation. “Canada and the U.S. have always had a strong economic relationship. What we’re seeing now is a breakdown in that partnership, and retailers are struggling to navigate a new reality.”
