Survey_Responses_Report

Survey Response Report February 27, 2025

Background • On Feb. 1, U.S. President Trump signed an executive order imposing a 25% tariff on Canadian imports and a 10% levy on Canadian energy, effective Tuesday, Feb. 4.

• In response, Prime Minister Trudeau announced that Canada will impose a 25% tariff on $30 billion worth of American goods starting the same day, followed by an additional $125 billion on American products in 21 days.

• Since then, the tariffs have been delayed for 30 days to allow for further discussions.

• In preparation for the tariffs, the Delta Chamber of Commerce and City of Delta launched a survey for local businesses, seeking to better understand the potential impacts of the proposed tariffs on our economy.

• The survey ran for one week between Feb. 10 and 17, 2025.

Survey Participants

59 Participants

50

Owners and Senior Leaders

1,600 Employees*

>$138M 16 13 Annual Revenues*

* Figures are approximate.

Manufacturing Businesses

Industry Sectors

Participation By Area and Sector Annacis Island

NAICS Sectors

2 3 16

11

Agriculture, Forestry, Fishing, and Hunting

3

21

Mining, Quarrying, and Oil and Gas Extraction

1

23

Construction

4

31-33

Manufacturing

16

41

Wholesale Trade

6

44-45

Retail Trade

5

48-49

Transportation and Warehousing

6

52

Finance and Insurance

2

54

Professional, Scientific, and Technical Services

9

62

Health Care and Social Assistance

3

71

Arts, Entertainment, and Recreation

3

72

Accommodation and Food Services

4

81

Other Services (except Public Administration)

7

North Delta

Tilbury

18

Ladner Amalgamated by Postal Code

4

Tsawwassen

9

Beach Grove

Sources of Revenues Revenue - Total

76% of all revenue earned by participating businesses comes from Canada compared to 55% for Manufacturing.

Manufacturers rely more on U.S. markets for revenue than other participating businesses.

Revenue – Manufacturing

76% 55%

19%

36%

Sources of Inputs 57% of all inputs sourced by participating businesses comes from Canada compared to 44% for Manufacturing.

Manufacturers rely more on U.S. markets for inputs than other participating businesses.

Inputs - Total Inputs – Manufacturing

57% 44%

27%

33%

U.S. Tariff Impacts Businesses affected by U.S. Tariffs %

1

Manufacturing, Wholesale, Retail, Transportation and Warehousing anticipate impacts.

15

30

Yes

No

70% of participants believe they will be affected by U.S. tariffs.

Manufacturing

No

4 6

70

Yes

Wholesale Trade

1 4 Retail Trade

6

5

Transportation and Warehousing

Professional and Technical

59% expect tariffs to affect their business immediately.

U.S. Tariff Impacts on COSTS and PRICES (%) COSTS COSTS - Manufacturing

63

Manufacturing

COSTSTotal - Total

24

51

0

35

12

5

2

7

PRICES PRICES - Manufacturing

56

Manufacturing

PRICESTotal - Total

Significant increase (>10%)

33

49

Increase (<10%)

33

No impact

Decrease (<10%)

Significant decrease (>10%)

86% of participating businesses anticipate cost increases and the need to increase prices, passing those costs to consumers. The Manufacturing sector

anticipates even greater impacts compared to the combined results.

0

7

13

5

Don't know

7

Anticipated Response to U.S. Tariffs 26

Most businesses are waiting for more information on tariffs before responding. Some have started to seek new markets within Canada and in some cases, are seeking alternate suppliers.

21

15

10

9

10

7

6

5 3

Awaiting more information on tariff specifics before responding

6

6

5

4

Seeking new Exploring Negotiating with Diversifying markets within international clients on pricing export markets Canada manufacturing or structure outside of the suppliers U.S.

2

1

2

5 2

3

3

2

Partnering with Reducing We do not have a Investigating Moving part or all Reducing prices industry business plan yet available support business proactively associations to operations (e.g., resources (e.g., operations to the advocate for layoffs, scaling Export Navigator, U.S. government back production) BDC, government policy changes or programs) support Total

Manufacturing

2

1

Other (please specify)

Adapting to U.S. Tariffs

Have you already made changes? (%)

“we just put a few restrictions in place and stand to lose an $88,000 contract” “started sourcing an office in Arizona”

19

19

63 Yes No, but planning changes soon.

No, and no changes are planned.

“stockpiling items that may be affected”

“set up separate pricing strategies… expecting the CAD (Canadian Dollar) will drop as tariffs come in”

Canadian Tariffs Businesses affected by Canadian Tariffs %

4

Manufacturing, Wholesale, Retail, Transportation and Warehousing anticipate impacts.

Yes

No

3 11

36

3 3

64

Yes

Manufacturing

Wholesale Trade

2

4

4

6

1 Retail Trade

Transportation and Warehousing

Professional and Technical

No

49% expect tariffs to affect their business immediately.

Fewer participating businesses believe they will be impacted by Canadian tariffs than U.S.

Canadian Tariff Impacts on COSTS and PRICES (%) COSTS COSTS - Manufacturing

70

Manufacturing

COSTSTotal - Total

20

54

31

0

10

9

0

6

PRICES PRICES - Manufacturing

Manufacturing

55

PRICESTotal - Total

53

Significant increase (>10%)

Increase (<10%)

36

25

No impact

Decrease (<10%)

Significant decrease (>10%)

85% of participating businesses anticipate cost increases and the need to increase prices, passing those costs to consumers. The Manufacturing sector

anticipates even greater impacts compared to the combined results.

0

17

Don't know

9

3

3

Price Increase and Customer Response (%) 94

57

23 13

4

6

0

0

A price increase will decrease A price increase will not affect I am unsure how a price I'm not expecting my prices to demand. demand. increase will affect demand. increase.

Total

Manufacturing

0 Other (please specify)

Anticipated Response to Canadian Tariffs

25

16 12 9

8 6

5 1

1

4 2

4 1

4 2

1

1

Awaiting more Exploring Seeking new Diversifying Investigating Negotiating with Partnering with Reducing Other (please Moving part or all information on domestic markets within import markets available support clients on pricing industry business specify) business tariff specifics manufacturing or Canada outside the U.S. resources (e.g., structure associations to operations (e.g., operations before suppliers Export Navigator, advocate for layoffs, scaling outside of responding BDC, government government back production) Canada programs) policy changes or support Total

Manufacturing

Adapting to Canadian Tariffs

Have you already made changes? (%)

29

16

55 Yes No, but planning changes soon.

No,and no changes are planned.

“purchasing from Canadian suppliers more” “secured domestic suppliers for all parts sourced from the U.S., these suppliers are a little more costly and have longer lead times”

“purchasing ahead of schedule to receive some products before tariffs take effect”

Overall Impact on Business

Manufacturing

25

Total

38

14

0%

27

10%

20%

Severe Impact

30% Significant Impact

19

4

40%

6

37

50%

Moderate Impact

60%

13

17

70%

Minimal Impact

Participating manufacturing businesses are anticipating a much more significant impact from tariffs.

80% Don't Know

90%

100%

Areas of Support

34

20

18 12

10 5

Access to Alternate Suppliers

Awareness of Local Suppliers

5

Marketing and Sales Support

Total

Manufacturing

11 5

Assistance with Understanding Impacts

6

Info on Navigating Trade Regulations

Council Resolution 33

16

16

4

4

1

2

Total

Manufacturing

3 3

1. Allow cities to accept only Canadian businesses in procurement bids.

2. Urge the expedited approval of Fortis BC’s Tilbury Phase 2 LNG expansion project in Delta.

3. Request the immediate commencement of construction on the Massey Tunnel replacement project.

Comments “Opening up interprovincial trade and business and removing local bureaucracy and sluggishness will have much more of a positive impact than any high-level tariff noise” “Massey Tunnel replacement project very high on my priority list” “I cannot pass the increase tariff amounts on goods already sold… in a competitive market the potential to increase prices are limited.”

“I’m already seeing clients holding off on projects because they are being impacted by tariffs (i.e. rebar fabricators, metals recycling)

“Neither we nor our U.S. partners may be able to adapt quickly enough to adopt viable alternatives. If tariffs remain substantial for over a year, we would most likely cease operations.”

Conclusions • Nearly all participating businesses expect to be impacted by both U.S. (70%) and Canadian (64%) tariffs.

• Manufacturers are more reliant on U.S. markets for revenue and inputs compared to other industries in Delta and expect more severe and significant impacts (63% compared to 41%).

• Impacts are expected to be felt immediately or within 1 to 2 months once tariffs are introduced.

• Most businesses are awaiting information before taking action. (63% planning changes soon.) Some have started seeking domestic suppliers and markets.

• Any effort to pass costs on to consumers is expected to decrease demand according to 33% of participants and nearly all manufacturers.

• Participants are seeking support to identify local suppliers and new suppliers.