Daniel Perry is the Director of Federal Affairs at the Council of Canadian Innovators (CCI).
The United States has slapped tariffs of up to 50 percent on nearly $20 billion worth of Canadian goods.
For Canada’s fastest-growing companies, the immediate problem is larger than this latest tariff round. Many are asking: what will the rate be in three months? Which products might get hit next? Will digital services be targeted? Will customers, or investors, still be there when the next executive order lands?
For months, Canadian CEOs have been making decisions around the possibility that the rules governing their largest export market could change (again) with little warning. One Council of Canadian Innovators’ member has been carrying additional inventory in US warehouses. They’re not doing it because products are currently subject to a tariff, but rather, the company cannot confidently predict what the border will look like even months from now.
Daniel Perry, CCI
“For scaling companies, uncertainty itself has become a tariff.”
That is what makes this period particularly consequential for scaling companies: uncertainty itself has become a tariff.
A known tax or tariff can be baked into a company’s pricing model. Pricing the possibility that a product, sector, or technology could become the subject of the next executive order, investigation, or negotiating tactic is much more difficult.
Canada, therefore, has two jobs in front of it.
The first set of jobs is immediate and unavoidable: defend Canadian economic interests, keep working toward the best possible agreement with the United States, and help affected companies preserve access to customers. Canada cannot simply turn away from an economy so deeply integrated with its own, nor should it pretend that new markets can replace the United States overnight.
The second job is harder. It requires Canada to think beyond this particular dispute.
What we are witnessing is not an aberration from an otherwise predictable international economic order. Major powers are increasingly using tariffs, subsidies, procurement, regulation, investment controls, and access to technology as instruments of statecraft.
The United States is acting in what it perceives to be its own strategic interest. Canada should assume that this kind of behaviour—not only from Washington—will remain a feature of the global economy.
Its response cannot be designed solely around surviving the latest measure; it must increase the number of choices available to Canadian companies when the next shock arrives.
That means getting Canadian resources to more markets; it means helping companies sell more products and services around the world; and it means building more globally competitive firms whose intellectual property, strategic decision-making, and high-value jobs remain anchored in Canada.
This is where domestic economic policy becomes inseparable from trade policy.
For too long, Canada has measured economic success by whether it can attract investment, generate startups, and participate in global supply chains. Those things matter. But in an era of greater geopolitical competition, countries also need firms with the scale, technology, balance sheets, and customer relationships to withstand pressure from abroad.
One of the most powerful tools available to governments is also one of the least strategically deployed: procurement.
Governments collectively purchase goods and services equivalent to roughly 15 percent of Canada’s economy. Those purchases shape markets; they determine which technologies receive reference customers, which companies develop expertise, where supply chains deepen, and where intellectual property and capabilities accumulate.
Yet Canadian procurement has too often been treated primarily as an administrative exercise: define a requirement, run a competition, and purchase the compliant product at an acceptable price.
That is necessary, but it is no longer sufficient.
“What we are witnessing is not an aberration from an otherwise predictable international economic order.”
For a scaling technology company, winning a government customer can matter far beyond the value of a single contract. It creates recurring revenue, validates the product in a demanding environment, and provides a reference customer that can help the company sell elsewhere. In CCI’s latest CEO survey, 39 percent of respondents identified access to customers as their greatest barrier to growth, ahead of either capital or talent.
Canada should not wall itself off from international competition. But it should also leverage the economic power of public purchasing and design procurement systems that reflect this reality.
Governments should ask what economic capacity a purchase helps create. Where is the research and development performed? Who owns the intellectual property? Where are the high-value jobs? Where are strategic decisions made? Will the supplier build Canadian expertise and supply chains, or will Canada simply become a permanent customer of technology developed and controlled elsewhere?
Those questions matter federally, but they matter just as much provincially. Provinces are among the country’s largest purchasers of health technologies, digital services, infrastructure, and other strategically important goods and services. They are central to whether Canadian companies can establish strong domestic reference customers before competing internationally.
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Retaliation and strategy are not the same thing. Replacing one foreign supplier with another may send a political signal, but it does little to build Canadian economic capacity.
Canada cannot control the strategic choices made in Washington, Beijing, Brussels, or anywhere else, but it can control how exposed Canadian companies are to those choices. Leveraging the enormous purchasing power of Canadian governments to create stronger companies and deeper capabilities at home should be a defining priority.
As legislatures across Canada return for the fall and the federal pre-budget process continues, we need to keep pressing a larger question: how do we use the tools and powers already at our disposal to strengthen Canada’s economic security, sovereignty and prosperity? Acting in the national interest means building greater resilience, creating more choices and growing stronger Canadian companies for the long term.
The opinions and analysis expressed in the above article are those of its author, and do not necessarily reflect the position of BetaKit or its editorial staff. It has been edited for clarity, length, and style.
Feature image courtsy Pexels. Photo by Brian Forsyth.