Sarnia chemical industry facing uncertainty as looming tariffs pose 'dire' threat to sector
U.S. President Donald Trump's pause on sweeping tariffs against Canadian imports ends April 2

The president and CEO of the Chemistry Industry Association of Canada says potential U.S. tariffs on Canada's chemical industry will have a "dire" effect on the sector — which has a significant presence in Sarnia.
Some companies on the ground, meanwhile, say it's business as usual, and they're doing what they can to prepare.
Chemical and plastics manufacturing in North America is highly integrated, said the chemistry association's Greg Moffatt.
"Companies would have facilities in Canada, the U.S. and Mexico, and they would be producing one specific commodity in each of their locations, and they would be bringing them together for inputs for, you know, another product," he said.
"And as you've seen in the automotive sector, you know, parts can move back and forth across the borders many times before they wind up in a finished product that might be used by an industrial customer or retail, right?"
It would not be easy for companies on either side of the border to reorient their businesses to avoid tariffs, he added.
Large percentage of Canadian chemicals, plastics and resins go to U.S.
U.S. President Donald Trump imposed 10 per cent tariffs on Canadian energy imports and 25 per cent tariffs on all other Canadian imports on March 4, only to pause them two days later on goods that were compliant with the Canada-U.S.-Mexico free trade agreement (CUSMA).
Those tariffs are now set to go into effect on April 2.
And while there's been much focus on the impact on the Canadian auto industry, the chemical industry is similarly exposed, Moffatt said.
Canada exported 77 per cent of its chemicals and 94 per cent of its plastics and resins to the U.S. in 2023, according to data from the association.
Ontario alone exported around $3 billion in chemistry products and $9 billion in plastics and resins to the U.S. that year.
Those products include polyethylene, butyl rubber, isopropyl alcohol, sulphuric acid, and plastic products used in automobile manufacturing, food processing, packaging and building materials.
About $4.7 billion of the industrial chemicals and resins exported to the U.S. came from Sarnia, said Dave Cherniak, the Chemistry Industry Association of Canada's policy manager for business and transportation.
During the brief period that tariffs targeting the chemical sector were in place, companies across Canada were absorbing them, Moffatt said.
"And that would have significant impacts, right?" he said.
"That's your margin. That's your profitability. That's your ability to continue to manufacture and operate and pay your wages and your operating costs and generate a return for your investments."
It remains unclear exactly how tariffs will affect the area if Trump chooses to go ahead with them long-term, said Matthew Slotwinski, the chief executive officer of Sarnia-Lambton Economic Parthership.
'The word of the day is 'uncertainty''
"The word of the day is 'uncertainty,'" he said.
Fuels, he said, typically rely on crude oil piped in from Alberta and converted into products for the Ontario market.
"On the other hand," he said, "When we look towards things like our plastics industry — and then we're speaking about companies like NOVA Chemicals, for example — much of their feedstock in the form of ethane is being derived from sources in the United States, while also supplying to international customers with their output."
NOVA's manager of external communications told CBC in an email that the tariffs have the potential to create uncertainty. But the company is "continuing business as usual per our customer agreements."
When asked for specifics about the company's exposure to possible tariffs, Samantha Peck referred CBC to the chemistry association.
NOVA established a risk management team late last year after Trump signaled his intention to levy tariffs, Peck said.
It also pre-placed inventory in the U.S and worked with logistics and customs compliance teams "to secure tariff-free access to export markets."
When asked to clarify what she meant by that, Peck replied in part, "We have secured the necessary access to foreign trade zones to support our export business without incurring tariffs."
Asked what the tariffs might mean for production and employment at NOVA in Sarnia, Peck said the company anticipates continuing to operate its facilities as usual to maintain a competitive and reliable supply for customers.
The managing director of Canada for ARLANXEO also told CBC it's "business as usual," though the company is closely monitoring the tariff situation.
"Our team is committed to minimizing any disruptions and ensuring compliance with the updated trade policies," Lori Wilkins:said.
Slotwinski said the businesses that operate in Sarnia-Lambton are international corporations with a presence in many countries and international supply chains.
That creates opportunities to avoid disruptions caused by tariffs.
"What we really are hearing from companies, at least at this point in time, is that they're trying to be proactive in advocating to the provincial and federal governments on potential action plans," he said.
"But they're also planning in terms of identifying how their supply chains can perhaps be modified to reduce the impact of any existing or potential tariff that may come to reality."
Moffatt told CBC the tariff situation presents an opportunity to address longstanding issues with competitiveness and productivity in Canada, by improving infrastructure, adopting a predictable approvals process for projects, and offering competitive corporate tax rates.
But he also said it's critical that Canada find a diplomatic solution to the tariff issue.
"Our closest customer is the United States, and it will always be the United States," he said.