Manitoba Shows Economic Strength Amidst Newly Announced U.S. Tariffs

As President-Elect Donald Trump prepares to take office, his newly announced 25% tariff on Canadian goods has cast a shadow of uncertainty over Canada’s economic landscape.

The purported aim of this new tariff is to address border-related issues such as drug trafficking. However, this move has sparked concerns about the economic impact that the tariff will have across various sectors, particularly those heavily reliant on cross-border trade. Canadian industries – from automotive to agriculture – are bracing for increased costs and potential supply chain disruptions.

Manitoba’s critical minerals: A pillar of economic strength

On December 3, 2024, the Honourable Wab Kinew, Premier of Manitoba, gave his second State of the Province Address and shared the current Manitoba government’s plans in light of this new economic issue. Premier Kinew’s stance is that Manitoba, bolstered by its critical minerals sector, is a trusted and necessary trade partner that is essential to the success of the U.S. economy.

For Manitobans, the implications of this are significant. The province’s economy is deeply intertwined with that of the U.S., with substantial exports crossing the border daily. The introduction of steep tariffs could lead to higher prices for Manitoba’s goods in the U.S. market, potentially reducing demand and, in turn, affecting local businesses and jobs.

Despite these challenges, Manitoba’s critical minerals sector offers a strong counterbalance. The province is home to 29 of the 31 minerals that are currently deemed to be “critical” by the Canadian government (including lithium, nickel, cobalt and rare earth elements). These minerals are essential for various high-tech and green energy applications, making Manitoba a key player in the global supply chain. These factors, combined with the burgeoning (and timely) growth of CentrePort Canada as a critical trimodal North American trade port, potentially place Manitoba in a strong trade economic position despite the looming tariff.

Additionally, Manitoba has recently released its Affordable Energy Plan and Securing Our Critical Mineral Future. The strategies outlined in these documents aim to accelerate the development of critical mineral projects and sustainable energy sources, while ensuring environmental sustainability, addressing climate change and building strong Indigenous partnerships. Coupled with low-cost, clean hydroelectric power, Manitoba is an attractive destination for companies looking to minimize their carbon footprint and operational costs.

Manitoba: A focus on collaboration and equity

Manitoba’s economic growth sectors are not just about extraction and profit; these new strategies are about building a sustainable and inclusive economy. The province’s approach emphasizes collaboration with Indigenous communities, ensuring that these communities benefit from resource development through equity participation, revenue-sharing models, loan guarantee programs and job creation. This inclusive approach not only fosters economic growth but also promotes social equity, reconciliation and protects Manitoba’s resources for future generations.

Manitoba’s economic strategy exemplifies resilience and opportunity in the face of external pressures. By leveraging its natural resources, strategic location and inclusive economic policies, the province can continue to thrive and contribute to the global economy, even amidst the uncertainty of new trade policies. As the world transitions to greener technologies and sustainable practices, Manitoba’s role as a reliable supplier of critical minerals will only grow in importance, ensuring a bright economic future.

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Authors: Erin Moch, Kevin Mehi

MLT Aikins LLP