This week, as promised, President Donald Trump implemented his sweeping 25% tariffs on Canadian imports as part of a broader trade war involving Canada, Mexico, and China. The tariffs are expected to place upward pressure on prices, leading to higher costs for goods and significant job losses – on both sides. These tariffs will have a ripple effect on our entire economy, including on digital advertising. The Canadian Chamber of Commerce released a statement yesterday about the tariffs declaring them reckless and noting that they will lead to recessions, job losses, and economic disaster.
It’s simple – higher prices for goods will lead to reduced consumer spending which will directly impact business revenue. As consumers tighten their budgets, businesses will also cut back on spending – and often, the first budgets to go are marketing and advertising despite major strides being made by industry to re-define digital ad spends as essential operating costs. Such misguided cuts can create a major ripple effect on our Canadian media jobs and, concerningly, ad supported domestic content.
As prices rise, the increase in costs for e-commerce businesses will necessitate increased ad spend to maintain visibility and competitiveness. As protectionism continues south of the border, Canadian businesses will have to work twice as hard to entice US consumers to buy Canadian brands. This is an expensive endeavor from both a communications planning and media buying standpoint to maintain cross-border brand loyalty.
Meanwhile, on our soil, as many brands launch new communications to tout their Canadian origin, and the country rallies to “buy Canadian”, the reality is that our industry still relies on the successful execution of media campaigns that support brands from outside of Canada. There are needles to thread here and we must tread carefully.
So, while we face obvious and significant headwinds, it’s important to stay calm knowing that the Canadian digital advertising industry is strong. We have weathered many economic challenges in the past including recessions and even COVID-19. Our sector must now do what it does best, adapt and innovate. It is time to explore new markets and take deeper dives into untapped potential within our borders. We must regroup and better articulate the unique strength of Canadian agencies who cater strategically to a uniquely rich and diverse Canadian audience better than any foreign entity ever could.
Advertising is how businesses make themselves known; the tariffs will simply make this harder than it needs to be. Our industry has faced high taxes, the threat of even more taxes applied retroactively, and a consistent negative perception against which we have tirelessly fought. If all levels of government are committed to ensuring the success and protection of Canadian business, it must protect and defend the best means those business have to get their messages across and make themselves known. Advertising has always been, and will always remain, an integral and legitimate interest of our economy.