Canada Should Stay Course Amid Proposed US Tariffs

CoStar's chief economist Mario Lefebvre says Canada shouldn't panic about proposed US tariffs of up to 50% on imports from Canada. Instead, he advises commercial real estate companies to 'stay the course' and not let recent developments deter them from planned acquisitions or development projects.

Lefebvre notes that while the tariffs may be a negotiating tactic by President Trump, it's essential for Canadian businesses to remain vigilant about their investments. He attributes the current uncertainty in trade policies as one reason why companies are hesitant to proceed with investment plans due to concerns about future trade agreements.

According to Lefebvre, the tariffs will not exempt goods traded under the Canada-US-Mexico Agreement (CUSMA), which could impact nearly US$20 billion in Canadian exports. However, he believes that good sense will prevail in the negotiations and points out that previous measures have shown that tariffs can be beneficial for both parties involved.

The economist warns that delaying investment decisions due to trade uncertainty may lead Canadian companies to fall behind their American counterparts in the age of AI and other technological advancements. He emphasizes the importance of competition and notes that Canada's economy has proven resilient, with low inflation rates (6.5% on average over 15 years) and a growing market share.

Lefebvre predicts that the current trade tensions will have a delayed impact on investment and productivity in Canada, but ultimately believes that Canadian businesses should execute their plans to capitalize on opportunities both at home and abroad.