Feds’ tariff response requires a ‘Team Canada’ approach, expert says

Canada’s response to the escalating U.S.–Canada trade tensions is being shaped by a new report that stresses the need for a coordinated “Team Canada” approach. The study, produced by the Federation of Canadian Municipalities in partnership with the City of London and Ivey Business School, argues that the impact of tariffs is felt across the country but is unevenly distributed, with industrial composition playing a more decisive role than population size. As the federal government prepares its next steps, municipal leaders and economists say the on‑the‑ground intelligence they collect is essential for crafting policies that protect every community, from small resource towns to larger manufacturing hubs.

The report’s core finding: industry matters more than size

According to the report, the severity of tariff‑related pressures on a municipality is closely linked to the types of industries that dominate its local economy. A town like Mackenzie, British Columbia, with a population of roughly 3,700 and an economy rooted in forestry and mining, experiences a different set of challenges than a city such as Windsor, Ontario, where the auto sector has long been the backbone of employment. The analysis suggests that size alone does not predict how a community will feel the economic shock; rather, the specific supply chains and export markets tied to its primary industries dictate the level of vulnerability.

Romel Mostafa, an economist and assistant professor of international business at Ivey, highlighted this nuance when speaking to Global News. He noted that “understanding these nuances means that there are different policy implications for it,” underscoring the need for tailored responses that reflect the industrial realities of each locality. The report therefore calls for a more granular, data‑driven approach to federal assistance, one that recognises the diversity of Canada’s economic landscape.

Municipal insight as a strategic asset

Municipal governments sit at the intersection of businesses, residents and local labour markets, giving them a unique perspective on how tariff shocks translate into everyday realities. Mostafa described municipalities as “on the ground connecting with businesses and residents,” a role that equips them with valuable intelligence for federal decision‑makers. This grassroots intel includes observations about investment pauses, workforce mobility and the immediate effects on small‑scale enterprises that may not be captured in national statistics.

Mayor Josh Morgan of London, Ontario, echoed this sentiment, pointing out that the city’s own experience reflects a mixture of hardship and adaptation. While London recorded the highest unemployment rate among Canada’s 20 largest municipalities—9.1 % in March, up from six per cent a year earlier—the mayor stressed that raw numbers do not tell the whole story. He highlighted a “migration of the labour force from smaller communities… to larger cities like London for job opportunities,” suggesting that municipal data can reveal hidden dynamics such as labour redistribution that influence broader economic trends.

Uncertainty and its impact on investment

The report identifies the persistent uncertainty surrounding the U.S.–Canada trade relationship as a major obstacle for municipal economies. Mayor Morgan described the climate as one that has “created a real pause in investment and job creation.” Businesses, faced with an ever‑changing tariff environment, are reportedly delaying capital projects and hiring decisions, waiting for a more stable policy outlook. This hesitation has manifested in both job losses in some sectors and modest gains in others, reflecting a patchwork of outcomes across the country.

For municipalities that rely heavily on export‑oriented industries, such as the auto plants in Windsor or the forestry operations in Mackenzie, the unpredictability of tariff rates can disrupt supply chains and erode profit margins. The report warns that prolonged uncertainty could exacerbate regional disparities, as communities with more diversified economies may weather the storm better than those dependent on a single sector.

Labour market shifts and the hidden story behind unemployment

London’s unemployment figures illustrate how headline statistics can mask underlying labour market movements. While the city’s unemployment rate rose to 9.1 % in March, Mayor Morgan noted that “we have seen actual net job creation.” He explained that the influx of workers from smaller, more heavily impacted towns has expanded the local labour pool faster than the rate of new jobs being added. This dynamic creates a paradox: unemployment rates climb even as the city absorbs additional workers seeking opportunities.

Such labour migration underscores the interconnectedness of municipal economies. As workers leave resource‑dependent towns for larger urban centres, they bring with them skills and expectations that can reshape local labour markets. The report suggests that federal policies should consider these mobility patterns, ensuring that support measures address both the communities losing workers and the cities absorbing them.

Cross‑border municipal collaboration

Mayor Morgan highlighted another dimension of municipal involvement: dialogue with counterpart cities in the United States. He stressed that “municipalities in Canada and municipalities in the U.S. are facing the same sort of impacts,” and that these shared challenges have fostered a spirit of cooperation rather than competition. By exchanging information and strategies, Canadian and American local leaders can develop coordinated responses that mitigate the adverse effects of tariff measures on both sides of the border.

This cross‑border collaboration could prove valuable for sectors that operate in integrated supply chains, such as automotive manufacturing, where parts often cross the border multiple times before final assembly. Joint municipal efforts may help identify bottlenecks, share best practices for diversification, and present a unified voice to higher levels of government on both sides of the border.

Bringing municipal intelligence to federal policymakers

One of the report’s key recommendations is to formalise the flow of municipal intelligence to the federal decision‑making apparatus. Mostafa called for a clearer “process of getting municipal intelligence to reach the policymakers at the higher order of the government.” He argued that the current ad‑hoc channels risk overlooking critical on‑the‑ground insights that could inform more effective tariff mitigation strategies.

Potential mechanisms could include regular briefings between municipal associations and federal ministries, data‑sharing platforms that capture real‑time economic indicators from local jurisdictions, and joint task forces that incorporate municipal representatives into policy design. By institutionalising these connections, the federal government could better align its trade response with the lived realities of Canadian communities, ensuring that no region is left behind.

Implications for Canada’s broader economic resilience

The report’s findings arrive at a pivotal moment as Canada seeks to balance its trade relationship with the United States while safeguarding domestic economic stability. The emphasis on a “Team Canada” approach reflects a recognition that a one‑size‑fits‑all policy may overlook the nuanced impacts on different regions. Tailored support—whether through targeted subsidies, workforce retraining programmes, or infrastructure investment—could help communities like Mackenzie diversify beyond resource extraction, while larger centres such as London might need resources to manage rapid labour inflows and housing pressures.

Ultimately, the study underscores that municipal voices are not merely anecdotal but constitute a strategic asset for national policy. By integrating local intelligence, acknowledging sector‑specific vulnerabilities, and fostering cross‑border municipal cooperation, Canada can craft a more resilient response to the ongoing trade dispute. The challenge now lies in translating these recommendations into concrete actions that bridge the gap between federal strategy and municipal experience, ensuring that the economic health of every Canadian community is protected as the trade landscape continues to evolve.

This article was produced with AI-assisted research and editorial support. Reporting is based on the source material cited below. Sources: Global News Canada; globalnews.ca; Global1.News (24 September 2026).

By Alex Thompson, Staff Writer