Orillia business owners are hustling to figure out how U.S. tariffs will harm their bottom line and what they can do to stay afloat.
Tariffs create the "perfect storm" for the boating industry, said Chris Meyer, a sales consultant for Crate's Lake Country Boats in Orillia.
"It's the worst news we could possibly get," said Meyer, who has worked for the Crate family business for more than 20 years.
Crate's sells Regal, Cruisers Yachts and Pursuit Boats, all of which are manufactured in the U.S.
"It's the perfect storm. We have a weak Canadian dollar. We have very expensive manufacturing. We have a 10 per cent luxury tax on boats (coming out of the United States on boats that are newer than 2018). We have 13 per cent HST and now a 25 per cent tariff," he said.
That's a total of 48 per cent tax on the cost.
On Friday, the exchange rate was $1.44 for one American dollar.
The least expensive boat at Crate's is $100,000, for a 20-foot boat, and prices go up to $3 million for a large cruiser.
The federal Liberal government implemented a 10 per cent luxury tax on yachts valued at more than $250,000 in September 2022. Meyer said HST is added on top of the cost of the boat, plus the luxury tax.
"We've already had our challenges with the luxury tax," he said.
Today, a $500,000 boat costs $621,500 ($50,000 in luxury tax, plus 13 per cent HST), not including tariffs.
"Now add a 25 per cent tariff," Meyer said.
There will be a 25 per cent tariff on the boat's components such as aluminum and 25 per cent tariff on the new boat when it crosses the border, he warned.
"No new boats from America will ever come up here again as long as 25 per cent tariffs exist," he said.
It's not just the boating industry. At Cards and Coasters board game café in downtown Orillia, owner Darren Minler created a Facebook video in which he warns customers about increasing prices and the store's vulnerability to closure.
He warned price increases are coming for trading card games that originate from the United States, such as Pokémon.
"We're really concerned about the future of our business, in particular trading card games, which is half of what we do here," Minler said.
He points out the trading cards of various games such as Magic and Pokémon cost $8. With tariffs, the price of each pack of cards will rise to $10. Now that the HST tax holiday is over, a single pack of new cards that was $8 last month will cost $11.30.
A box of cards that sold for $195 before tariffs is going up to $250 after tariffs.
"We are making a 23 per cent profit margin on items like that ... When a release comes out, we aren't making big, big money on this. We're making just enough to get by, and if the prices increase and people buy a little bit less, we're in very, very concerning waters here," he explained.
He predicts his profit will go down to 18 per cent while the government will be collecting 38 per cent (25 per cent tariff, plus 13 per cent HST) in taxes.
"Anyways, come to our store and support us. We really need the support," Minler said.
At Trombly's Tackle Box in Orillia, a family-owned business since 1988, owner Remi Trombly said tariffs will increase the cost of both items manufactured in the United States and items that are made overseas but shipped through the United States and then into Canada.
Prices for fishing rods, reels, lures, ammunition and firearms will increase, Trombly predicted.
"A lot of them are made in the U.S. or come through the U.S. to Canada. A lot of the companies are U.S. based and they don't have a warehouse in Canada," he added.
Trombly's has always supported Canadian-manufactured items.
"We believe in supporting as much local product as we can," said Trombly. "We carry a full line of outdoor furniture that is Canadian made. Crossbows are Canadian made. Smaller tackle is Canadian made."
The store carries three brands of life-jackets, three brands of kayaks and two lines of canoes that are Canadian made.
"We carry a lot of products that are Canadian made," Trombly noted.
He said he's been in touch with a lot of his suppliers and everyone is trying to figure out what's going to unfold and what the numbers will be, but he added there will definitely be price increases on products coming in.
However, new developments to circumvent tariffs are already in the works, said Trombly.
"I had a supplier literally call me 15 minutes ago that is setting up a warehouse in Canada to bring product from Europe to Canada to avoid the tariffs. So, there could be more of that happening. It will hopefully create more Canadian jobs as we go forward," he said.
Allan Lafontaine, executive director of the Orillia District Chamber of Commerce, said the U.S. tariffs should be a wake-up call for Canada to become more independent.
"Why is Canada not talking about building refineries? Why are we not talking about getting off our dependence on U.S. natural gas? Canada needs to go on a trade mission to Taiwan and get microchip processing plants opened here in Canada," he said.
"We need a Canada plan, a made-in-Canada plan. A Canada plan involves Canadians building back our supply chain. We're paying way too much attention to Trump. I'd like to see us work on our own problems. So, how do you do that?
"Shop local. That's the greatest way of keeping our economy going. Shopping local has always insulated us."
Also, people should not punish all U.S. companies, he said, noting McDonald's in Canada employs Canadians and uses Canadian beef and produce.
He said it's also vital to remove interprovincial trade barriers immediately.
Lafontaine is also calling on the government to provide grants and tax incentives to build the supply chain and remove red tape to speed up the process.
Finally, he said, it's time for Canadian politicians to go to the U.S. and negotiate better trade agreements that bring prosperity to both countries because the U.S. is Canada's largest trading partner.
Lafontaine said he is working closely with other chambers in the area and with the Ontario Chamber of Commerce to figure out how to lessen the effects of tariffs, how to get back to the table to hammer out better deals and how to increase trade with countries other than the U.S. and China.
"How do we insulate ourselves from future trade wars?" he asked.
He likes to explain the issue using hockey terminology: "We're not playing offence. That's what Canada has to do. We have to see where the puck is going and we have to score more goals."