U.S. tariffs sour outlook for Canadian sugar and candy companies #CanadaFinance

The tariffs and retaliatory tariffs currently on the table would have a “significant adverse impact” on Canadian company Rogers Sugar and its operating subsidiary Lantic, the company said in a Feb. 6 earnings release.

Cadbury chocolate-maker Mondelez International, which has manufacturing operations in Canada, said in its earnings report that any escalation in the trade dispute would “pose a significant risk” to its sales and input costs.

Other multinational confectionary brands with manufacturing operations in Canada include Hershey, Nestle and Mars.

Some companies are already looking at ways to pivot as they face uncertainty over the next four years, said Lisa McEwan, co-owner of Hemisphere Freight and Customs Brokerage, which helps clients — including candy companies — import and export between the U.S. and Canada.

“A huge concern is that the margins just can’t take a 25 per cent increase,” said McEwan.

“It’s not feasible.”

Over the short term, there’s not much the Canadian industry can do to respond to tariffs, said Pouliot.

If it looks like tariffs are there to stay, then multinational companies are “going to look more seriously into building new plants within the United States,” he said.

If Canada retaliates, that would also have a big impact on imported products like packaging, said Norris.

That’s the worry for Canadian companies that don’t rely on the U.S. for sales, like Vancouver-based Purdy’s Chocolatier, which celebrates its 118th birthday later this year.

The company imports some important raw materials, in particular nuts, from the U.S., said president Lawrence Eade.

For example, the namesake pecans in the company’s staple Sweet Georgia Browns actually come from Georgia, he said.

“We’re not going to get around that. We’re not going to replace those,” he said.

Wahle said during the COVID-19 pandemic, she started sourcing more packaging from the U.S. to avoid supply chain disruptions. Now, she’s backtracking to avoid tariffs.

“I’ve already been in contact with European vendors to try to bring in stuff from Europe that is comparable in quality,” she said.

At the same time, the industry is also dealing with a significant rise in cocoa prices as farmers struggle with extreme weather.

With the loonie relatively weak right now, that could help offset some of the pressures from potential tariffs by the U.S., said Norris, since it makes Canadian imports a little cheaper.

But on the other hand, the weaker loonie makes imports from the U.S. — like packaging — more expensive, she said: “So it’s a balancing act there.”

There’s one silver lining for companies like Purdy’s: the “buy Canadian” push that has shoppers across the country favouring Canadian products.

“This is absolutely the moment for Purdy’s to really scream loud about what it means to be a Canadian business,” said Eade.

This report by The Canadian Press was first published Feb. 17, 2025.

Rosa Saba, The Canadian Press