Tariffs paused, but manufacturer that employs 700 in Steinbach now struggles with uncertainty
85% per cent of Loewen's door and window products goes to the U.S.
A 30-day pause on threatened U.S. tariffs might be a welcome reprieve for Manitoba's manufacturers, but uncertainty lingers about the potential impacts if they are implemented.
Neil Fast, president and CEO of Steinbach-based Loewen Windows, says 85 per cent of its products are exported to the U.S., which makes the 25 per cent tariff threatened by President Donald Trump — currently on hold — a danger.
"It instantly makes our products much more expensive in the U.S., it may make our dealers less profitable, it will certainly make Loewen less profitable," Fast said while touring Loewen's 600,000-square-foot manufacturing plant on Tuesday.
"And the worst-case scenario is, of course, customers choose to buy from some other location."
Manitoba Premier Wab Kinew has said there is still a need to "Trump-proof" Canada's economy, including boosting productivity in Manitoba and searching for more diverse export markets.
Fast agrees, saying there are other markets Loewen could export to.
"We still have small businesses in the U.K. and Japan, left over from when we were shipping much more there in the '90s … and we would certainly look toward Europe as well as further possibilities," he said.
His company's products are entirely manufactured in Canada, and it would be incredibly challenging to move everything from the Steinbach factory to the U.S., he said.
"We think that we are at our best producing here," and relocating is "certainly not a direction we would choose to go down, very likely," Fast said.
At the same time, the company is taking measures to help mitigate the impact of the tariffs, including increasing the frequency of shipments to the U.S. while there are no tariffs in place, and looking at sharing the cost of any tariffs with their dealer network and partners, he said.
Loewen is also managing its expenses carefully during an uncertain period, he said.
"An inconsistent trading partner … will be frustrating for our business, but we have been through worse."
Loewen has an employee workforce of about 700 in Steinbach, and layoffs are a concern, which has been expressed in town halls with staff.
"It's certainly possible, but there are several other actions that we're taking and that would certainly happen first, before we would look at layoffs. We have incredibly skilled employees and frankly, we would not want to lose a single one of them to layoffs if we have any other choice," Fast said.
Fast said Lowen is hoping to grow its Canadian market, but trying to make up for a hit to the 85 per cent of its sales currently going to the U.S. would be a huge challenge.
While there is a push to buy Canadian products, inter-provincial trade barriers are a challenge, said Fast.
"We have different adoptions of energy codes in different provinces. Our tradespeople, our health-care professionals have different certifications. There are challenges shipping products like alcohol across the border," he said.
"If our provincial and federal governments could work together to address all those issues, it will make buying … Canadian-made products much easier for everybody."
Uncertainty has an impact: association
Adrian Edge, the director of codes and regulatory affairs for Fenestration Canada — an association that represents about 150 Canadian window and door manufacturers and suppliers — says even without tariffs in place, the trade uncertainty could affect the industry.
"I have heard conversations about developers that have been threatening to drop windows from Canadian manufacturers on multimillion-dollar projects," and around "uncertainty of what it means for the products to go over the border, and who owns what responsibility," Edge said.
When it comes to the door and window industry, Canada doesn't have a competitive edge on the international stage, he said, and it's an industry that's particularly vulnerable to possible tariffs, since U.S. customers have a lot of options.
Window and door exports from Canada to the U.S. are also heavily influenced by the exchange rate, he said.
"Let's say a window and door is sold to a Canadian homeowner at $2,000 [Cdn]. That same window or door is sold at $2,000 [US] for the U.S. counterpart. And so that exchange essentially becomes whatever your margin is," said Edge.
Going forward, he said Fenestration Canada has a plan for which topics it wants to focus on, which includes "what the government can do as far as improving manufacturing capabilities."
"Our manufacturers, in order to capture that market loss … will need additional support," he said.
"They are not capable at this point to grow to that capacity in a short period of time. There will need to be incentives and support."
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