How Trump’s tariffs will hit Saskatoon and Regina

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Regina and Saskatoon will both be impacted by United States tariffs imposed on Canadian imports, but it appears the provincial capital is in a better position to weather the storm than Saskatchewan’s largest city, according to the Conference Board of Canada.

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U.S. President Donald Trump’s tariffs on Canada will hit Saskatoon harder than Regina, placing it in the top 10 most exposed cities, the Conference Board said in a recent report, The True Cost of Trump Tariffs: City Impacts. The report examined how 24 major cities’ economies would be affected by tariffs of 25 per cent on all Canadian exports to the U.S., plus the fallout from retaliatory tariffs on the U.S. from Canada, over a three-month period.

Saskatoon ranked in 10th place, with real gross domestic product (GDP) expected to fall 1.2 per cent below the Conference Board’s baseline forecast in the second quarter. Regina came in 13th place, with its GDP also expected to contract 1.2 per cent below baseline.

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There’s really two different stories at play between Saskatoon and Regina,” said Richard Forbes, principal economist with the Conference Board of Canada.

He said the discrepancy between the two cities comes down to Regina’s economy being more service-oriented than Saskatoon’s.

“About 75 per cent of the city’s economy, or jobs in the city, are in the service sector,” Forbes said.

Regina’s service sector is made up of public service, health care and education. It also includes professional services like legal and consulting, along with retail, wholesale and transportation. Services are more insulated from fallout from tariffs, Forbes said.

“The impact in Regina is pretty modest relative to other cities,” he said.

But Saskatoon is a different story. Forbes said that city’s economy is more exposed to resource industries that could be impacted by tariffs, like mining.

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“(Saskatoon’s) ties to the mining and agriculture sector, particularly potash and uranium, (that) might take a little bit of a hit,” he said. “These are resources that get shipped to the United States.”

But while Canadian potash and uranium aren’t expected to experience a major drop-off in U.S. demand because buyers lack alternatives, the tariffs could still lead to an overall economic slowdown. That would have a knock-on effect for potash and uranium.

“There will be some impact if we see the U.S. economy slowing down as a result of the tariffs,” Forbes said. “So there might be just less overall demand.”

Notably, Saskatoon also has a large manufacturing base, a sector heavily exposed to the U.S. thanks to closely integrated supply chains. According to the report, 36 per cent of Saskatoon’s economy is reliant on industries that produce goods.

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Manufacturers are expected to face challenges finding alternative markets for their goods tied to U.S. supply chains.

“Manufacturing we see as probably the hardest hit industry of all of them,” Forbes said.

On the flip side, Saskatoon’s agriculture sector is in a more nimble position. Forbes said agricultural exports could possibly be shifted to alternative markets in Europe and Asia.

“Things like agriculture we see as more able to diversify exports away from the U.S.,” he said.

In February, the Conference Board looked at the impact of tariffs on individual provinces and determined Saskatchewan would be the third-hardest hit, thanks to a strong manufacturing sector that relies heavily on selling goods to the U.S. The Conference Board said it expected the province’s real GDP to fall 1.4 per cent below its baseline forecast in the second quarter.

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The upheaval over tariffs and trade wars is having an impact on workers in Saskatchewan. The Saskatchewan Federation of Labour (SFL) said in an emailed statement that people employed in the resources, energy and manufacturing sectors are feeling anxious. Health-care and retail workers are also concerned the tariffs could cause supply chain breakdowns.

The impact on workers cannot be overlooked, the SFL said.

“Saskatchewan’s GDP is more reliant on exports than any other province, and the heavy reliance on U.S. markets makes jobs and workers especially vulnerable,” SFL said in the statement. “Saskatchewan workers must not be left on the sidelines.”

Though Saskatoon is more exposed to economic fallout from tariffs than Regina, overall both cities fall in the middle of the pack nationally.

Cities in southern Ontario are most likely to experience negative impacts, according to the Conference Board. Guelph, Ont., is considered to be the most exposed, with second quarter GDP expected to fall 2.3 per cent below the Conference Board’s baseline forecast for the second quarter. Windsor, Ont., which has a strong automotive manufacturing sector, is next, with its real GDP forecasted to drop 2.2 per cent below baseline. Kitchener-Waterloo-Cambridge, Ont., another manufacturing hub, rounds out the top three, with a 1.9 per cent expected drop in its second quarter GDP.

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Forbes said Guelph makes the top of the list because of its large manufacturing base in the food processing and agri-foods industry, which has close ties to the U.S.

“Its proximity to the U.S. border also implies that it’s very reliant on shipping goods south of the border,” Forbes said.

Here is the Conference Board’s full list of cities, ranked in order of tariffs’ impact on GDP:

1. Guelph, Ont.
2. Windsor, Ont.
3. Kitchener-Waterloo-Cambridge, Ont.
4. Hamilton, Ont.
5. London, Ont.
6. Toronto
7. St. Catharines-Niagara, Ont.
8. Montreal
9. Vancouver
10. Saskatoon
11. Edmonton
12. Oshawa, Ont.
13. Regina
14. Winnipeg
15. Thunder Bay, Ont.
16. Greater Sudbury, Ont.
17. Quebec City
18. Kingston, Ont.
19. Calgary
20. Victoria
21. Ottawa-Gatineau
22. Moncton
23. Halifax
24. St. John’s

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