Calgary city council wants federal help after they learned the protracted Canada-US trade battle could mean half a billion dollars in extra purchasing costs, mostly from counter-tariff impacts.

Councillors at the Sept. 8 Executive Committee got an update on US tariffs and the impact they could have on the City of Calgary’s supply chain.

Amit Patil, the City of Calgary’s director of supply management, said that with their current active procurement contract value of $5.3 billion, there’s an estimated potential increase in costs of between $315 million and $466 million.

“That’s through the life of the contract, and there (are) no mitigation strategies in place. I will emphasize this scenario-based modeling, and I understand the number is concerning,” he said.

“This is a point-in-time snapshot, and to set the expectations, we have mitigation strategies, and we have proven that they work to reduce the cost. But not everything can be mitigated.”

Patil said that the impact would be felt largely in infrastructure projects, utilities, transit and technology. This amount is reflective of the City of Calgary’s commitment to 95 per cent of contracts with Canadian suppliers.

“When there are tariff costs or risks presented to us, we have asked our suppliers to demonstrate the detailed breakdown of their quotes to highlight the true impact on our contracts,” he said.  

“We take our responsibility to protect the public funds seriously and analyze all the impacted contracts line by line.”

Calgary Mayor Jeromy Farkas said that the “unjust” trade war with the US would result in high local costs. He believed Calgarians and Canadians had a far greater appetite to fight “far beyond what the Americans do.”

He said he supports the federal government’s trade actions to assert Canada’s trade sovereignty. To that end, he said it gives him an opportunity to advocate for an expedited trade relief program through the federal government.

“We have to continue to build the needed pipes and infrastructure, and so on. It’ll take us some time to be able to diversify,” he said.

“So, in the interim, we’re seeking that support from the federal government to allow for a remittance process, where essentially we could provide our receipts and the charges that either us, or our various aligned contractors, are incurring.”

Be careful championing retaliation: Coun. Ward

Ward 11 Coun. Rob Ward said he supports Canada, he loves the country, and he encourages folks to buy Canadian. He doesn’t support the open cheerleading of counter-tariffs.

He said in the case of fire engines, which are purchased in Canada but built in the US, the retaliation could mean fewer fire engines for the Calgary Fire Department.

“I think it’s somewhat irresponsible for us as members of council to go out cheering for these retaliatory tariffs that are only making our fire engines more expensive,” Ward said.

“Which means we could possibly end up getting less fire engines because we have to pay more for them now.”

Outside city council chambers, Patel said most of the estimated cost escalation would come from Canadian retaliatory tariffs.

“American (tariffs are) more or less equivalent to how the inflation rolls in, because we are net importers of other goods. We don’t really export anything, so the bigger impact for us is the retaliatory tariffs.

Ward said he didn’t think the City should stay silent on the US – Canada tariff situation.

“I don’t think we should be mute about it, but I don’t think we should be cheerleading actions that cause things that we badly need to become more expensive,” he said.

To date, the City of Calgary has incurred $1.2 million in tariff costs, with another $5.7 million currently in negotiation.

Patil said that the city would be employing mitigation strategies, where possible, to reduce tariff impact. Having multiple suppliers helps, as does purchasing or delivering materials at varying times to avoid tariffs. They also review product specs to help identify potential local suppliers for different products.

Chase Smith, manager of procurement transformation, said there is a lot of data collected to inform decisions.

“We also use real-time data modeling through our supply chain risk scenario dashboard, which was developed in-house to show our contract exposure to such scenarios as escalating tariffs or the Iran war,” he said.

“The city’s bringing together of current and past procurement spends, geographic information, market intelligence, and scenario modeling has given us effective data-driven insights to allow us to pivot and adjust our procurement strategies as and when needed.”

Councillors approved a motion at Executive Committee to have Mayor Farkas, through the Federation of Canadian Municipalities and the Big City Mayor’s Caucus, write a letter requesting that a rapid municipal tariff remittance program be set up to help recover municipal costs.