Ontario Construction News staff writer
Canadian municipalities are reporting rising project costs, supply-chain disruptions and delayed investment as trade tensions with the United States affect local economies, according to a new national report.
The report, Where Trade is Felt: Canadian Municipalities and U.S. Trade Disruption, was produced by the Federation of Canadian Municipalities (FCM), the Lawrence National Centre for Policy and Management at the Ivey Business School and the City of London. It examines how municipalities are experiencing and responding to trade-related pressures.
“Impacts show up locally before they appear in broader economic data, whether it’s shifts in business confidence, delayed investment decisions or challenges facing local employers,” FCM President Tim Tierney said. “That’s why understanding what’s happening on the ground is so important to building an effective response to economic challenges, like tariffs.”
The survey found that 80 per cent of participating municipalities had taken steps to respond to trade-related pressures. That figure rose to 100 per cent among municipalities reporting the highest levels of disruption.
Measures reported by municipalities included creating tariff-response teams, introducing Buy Canadian procurement initiatives, increasing outreach to local businesses and strengthening efforts to attract investment.
The effects varied significantly between communities, the report found. Exposure was linked less to population size than to the makeup of local economies, with municipalities tied to sectors including automotive manufacturing, oil and gas and steel reporting different levels of disruption.
Cost pressures and supply-chain disruptions were the most commonly reported severe impacts, followed by delays or cancellations of investment.
“The findings underscore the importance of local perspectives in identifying where trade pressures are emerging and how they are impacting communities across Canada,” London Mayor Josh Morgan said. Morgan is also chair of FCM’s Big City Mayors’ Caucus.
“Municipalities bring real-time insights that can help ensure Canada’s response reflects conditions on the ground,” he said. “As the trade environment continues to evolve, working together will be essential to help communities adapt, strengthen local economies and build resilience for the future.”
The report identifies three areas where the federal government could strengthen what it calls the Team Canada response: incorporating municipal data and insights into federal decision-making; improving the timing and flow of information to municipalities during disruptions; and addressing domestic barriers, including interprovincial trade barriers.
“The findings point to the value of drawing on municipal intelligence and local response capacity as part of the broader Team Canada effort in a rapidly evolving trade environment,” said Romel Mostafa, director of the Lawrence National Centre for Policy and Management.
Mostafa said there is an opportunity to improve coordination and ensure local conditions are considered in national economic strategies while maintaining the existing division of responsibilities among governments.
The research was conducted in May among 31 municipalities in nine provinces, providing a snapshot of communities’ initial responses to trade disruption.
The report also points to infrastructure spending as one way municipalities can support local economic resilience. It says infrastructure can help communities support businesses, attract investment and strengthen their capacity for long-term growth as trade conditions continue to change.
