Canadian entrepreneurs do not like the uncertainty of the trade dispute between Ottawa and Beijing, and fear that the quarrel will drag on.
It all began last December in Vancouver with the arrest, at the request of the United States, of a leader of the Chinese company Huawei. Since then, China has been hard on Canadian entrepreneurs by blocking their products for a variety of reasons, from insalubrity to lack of documentation.
Beijing imposed sanctions on canola and then on peas and soybeans. Then there was the suspension of export licenses for two pork producers in May. And on June 25, China blocked all imports of Canadian meat.
Canadian companies are very concerned about this latest measure from China, explains Véronique Proulx, CEO of Quebec Manufacturers and Exporters (MEQ), which represents 2,500 members across the country.
“Companies, especially in the area of meat and pork, are still quite captive of the Chinese market. So overnight, no longer having access [to this market], it has a direct impact on their ability to market and their profitability too,” says Proulx.
A multitude of Canadian products are exported to China, from pulp to oilseeds, to meat and copper or nickel ores. The sanctions could extend to other products than those affected so far, believes Ms. Proulx.
What we have seen since the beginning of the conflict is that the further we go, the more China puts in place various measures or sanctions against Canada. So others could follow. We hope not, but everything is possible at this stage.
Véronique Proulx, CEO of MEQ
“Until now, most companies were unaffected and waiting to see what would happen. There, clearly, it hurts. It hurts Quebec because we have a lot of companies in the sector that is targeted [pig], “says the CEO.
The question is how long will the conflict last, she adds. She gives the example of the tariff war on steel and aluminum with the United States. Nobody knew when it was going to end, she notes.
It creates a lot of uncertainty for companies. It’s going to last a month, two months, three months. Or is it to last for years? If so, it changes the business model of the companies. They need to completely review how they do things, and to which countries they will develop new opportunities.
Uncertainty is never good. Uncertainty means that we will postpone investment projects. We saw it with the United States. Companies postpone investment projects because they do not know if they will have access to a market tomorrow morning.
Véronique Proulx, CEO of MEQ
An impact on the confidence of entrepreneurs
The latest Chinese sanction is also bad news for the Canadian Federation of Independent Business (CFIB), which brings together 110,000 SMEs across the country. This announcement brings even more uncertainty, notes Simon Gaudreault, senior director of national research at CFIB .
Business people, in general, like predictability, they like to be able to develop their business in a stable environment , notes Simon Gaudreault. And ads like this are spreading to businesses everywhere , he adds. They are the ones who pay the price, and these are our local economies, it must be said. There are exporters everywhere, across the country. It can actually slow things down, complicate things. So that’s not good news from that point of view.
It has been some time since the uncertainty in our trade relations with China could have an impact, if only on the confidence of entrepreneurs.
Simon Gaudreault, CFIB
The CFIB has a monthly survey of its members, including their optimism and business development plans. In many parts of the country or for many companies, there is uncertainty, and we are not as optimistic as we should be in a situation of economic growth. Then there are other factors that come to play, but there are particular uncertainties on the side of China as a factor that does not help now.
“What we want is that we can go back to trading freely,” adds Simon Gaudreault. “China is and will remain a very important market for Canadian companies. That is why our governments must not spare any effort to resolve the stalemate very quickly.”
Joe Robinson was born and raised in California but moved east when he was 25. Apart from running his own consulting firm. Joe spends his time as an instructor at Row New York. As a financial journalist, Joe has published stories for NPR Business Online, as well as Buzz Feed and Motherboard. As a contributor to Press Release Forum, Joe mostly covers markets and trade.