10 Ways Canadian Companies Navigate the Impact of U.S. Tariffs

10 Ways Canadian Companies Navigate the Impact of U.S. Tariffs

The Trump Administration has announced that it will impose tariffs on Canadian goods exported to the U.S. In response, Canadian politicians have vowed to impose retaliatory tariffs on U.S. imports.

While the specific amount, extent, or start date for tariffs on either side of the border is currently unclear, Canadian organizations that will be directly or indirectly affected must be proactive and prepared. The only thing that seems indisputable at this time is that tariffs in some form are not a matter of “if” but a question of “when.”

At PIVOTAL, there are multiple ways that we can help Canadian organizations impacted by the tariffs remain agile and resilient in a difficult economic landscape. PIVOTAL’s expertise in this area include:

  1. Updating Workforce Policies and Agreements
  • Employment Agreements: Adding or updating clauses pertaining to temporary layoffs, terminations, and/or reduced hours in cases of significant economic hardship caused by tariffs, or by similar market disruptions.
  • Force Majeure Clauses: Ensuring that your employment and vendor contracts include provisions to address unforeseen delivery or economic impacts caused by tariffs.
  1. Workforce Planning
  • Cross-Training Employees: Helping you develop cross-functional training programs so that your employees can effectively and rapidly adapt to changing roles and business priorities.
  • Flexible Workforce Models: Helping you adopt flexible staffing options, such as contingent workers, PEO employees, or outsourcing arrangements, that help you more effectively manage fluctuations in demand.
  1. Financial Impact Mitigation
  • Salary Reduction Provisions: Adding temporary salary reduction clauses to your employment agreements, in order to avoid or lessen the impact of layoffs during financial downturns (this could include workshare options).
  • Variable Compensation Structures: Shifting compensation to variable pay models tied to performance or profitability, so that you have more predictability and control over fixed costs.
  1. Talent Retention During Turbulence
  • Retention Strategies: Providing advice and direction regarding employee engagement and retention techniques, which help you retain top performers despite financial uncertainty.
  • Stay Interviews: Providing advice and direction to help you regularly checking in with key employees, in order to address their concerns and build loyalty.
  1. Compliance and Legal Support
  • Review Legal Obligations: Ensuring that you are fully aware of your legal obligations related to layoffs, terminations, and changes to employment terms in Canada and cross-border.
  • Compliance Monitoring and Assurance: If your U.S.-based organization has a Canadian footprint or does business through a Canadian PEO, that you remain in compliance with HR legislation that may change at the provincial or federal level in response to tariff-related pressures (or any other factors).
  1. Supply Chain Impact
  • Internal Realignment: Helping you realign internal resources if supply chain disruptions affect production schedules or volume needs.
  • Retraining Programs: Designing retraining programs to upskill employees for roles in other parts of the business (e.g., logistics or procurement).
  1. Scenario Planning
  • Risk Assessments: Working with you to assess potential risks tariffs pose to their operations, including financial, workforce, and supply chain impacts.
  • Contingency Planning: Creating detailed contingency plans to respond to various scenarios, such as increased costs, reduced revenue, or supplier issues.
  1. Communication Strategies
  • Transparent Employee Communication: Developing communication plans to explain tariff-related decisions to employees clearly and with empathy.
  • Consistency and Compliance: Ensuring that all internal and public-facing communications related to HR are consistent with changing priorities and strategies driven by the shifting economic climate.
  1. Training and Upskilling Leadership
  • Leadership Development: Training your leaders in decision-making during economic uncertainty, in order to help them confidently navigate tariff impacts.
  • Legal and Financial Literacy: Equipping your managers with training on the financial and legal aspects of tariffs and their workforce implications.
  1. Payroll Management Support
  • Remote Work: Helping you manage payroll for remote workers who are working in different provinces or countries.
  • Recruitment and Retention: Designing personalized payroll benefits that drive engagement and help you hire and keep critical talent.

Get Prepared and Stay Ahead

For many organizations in Canada, the next several months (and perhaps years) could present multiple tariff-related challenges and issues affecting all aspects of HR, from hiring and retention, to compliance and legal. Partnering with PIVOTAL during this difficult and uncertain time is a smart, strategic, and safe way forward. We have been supporting Canadian organizations for more than 40 years, and are one of the country’s most experienced and reputable HR management firms.

 

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