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Canadian businesses hope Trump doesn’t follow through on protectionist threats

OAKVILLE, OCT 5, 2016 - FRESH BUILD - Freshco CEO Mandy Rennehan poses in a section of her Oakville office that is currently getting a facelift. Fresco is a boutique, retail facilities firm that will either give a retail space a facelift, design a space from scratch a build it for a client or maintain a well working existing space.

Glenn Lowson photo for The Globe and Mail

Mandy Rennehan, chief executive officer of Freshco Retail Maintenance Inc., is – like other Canadian small-business owners – taking a deep breath after the shock of seeing Donald Trump as president-elect of the United States.

About 30 per cent of her business relies on U.S. sales – customers for her retail reconstruction and maintenance services include Apple, Nike and Gap – and Mr. Trump's campaign promises to renegotiate or even tear up the North American free-trade agreement (NAFTA) and take a protectionist "Buy American" stance have left her and her fellow Canadian entrepreneurs feeling anxious.

She has put off plans to expand further into the United States and is taking a wait-and-see attitude before deciding on her strategy for the Oakville, Ont.-based company, which she founded in 1995.

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"I'm not afraid of putting [investment funds] elsewhere," she said Wednesday after Mr. Trump's stunning victory in the presidential election against Democratic Party contender Hillary Clinton.

"If we see [Mr. Trump] coming after Canadian trade" with protectionist measures such as tariffs on imports then options for expansion elsewhere than the United States will be assessed, Ms. Rennehan said.

"There are a lot of moving parts here that I need to see. We're just going to hold steady and watch the markets."

Ms. Rennehan anticipates that some of the bold campaign promises Mr. Trump made will inevitably have to be watered down as the reality of actually governing sets in. Other small business owners agree.

"There are a lot of checks and balances in the U.S. system. I don't think one person will be able to do what they unilaterally want," said Steve Rhone, president of Mississauga-based Weston Forest Products Inc., which distributes wood products in the United States.

"There's going to be a little bit of time here for everybody to take a deep breath and figure out what he's going to do."

Marc Bedard, head of Chambly, Que.-based MTL Technologies Inc., believes Mr. Trump and his team will see that it's in the United States' best interest to maintain free trade with Canada, especially given the fact that Canada currently has a trade deficit with its neighbour south of the border.

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MTL recently opened a distribution office in the U.S., the destination for about 95 per cent of its sales of display freezers and refrigerators for retailers like Wal-Mart and Kroger.

In the meantime, Mr. Bedard said he's going to "look for the silver lining and how we could exploit it," namely the possibility of a bump to the U.S. economy if the president-elect follows through on promises to lower taxes and boost infrastructure spending.

Peter Kaufman, president of Aurora, Ont.-based Buddy's Kitchen – maker of gourmet cat and dog food – said "the question mark is quite big" now that "President Trump" will soon be a reality.

"This throws a knuckle-ball right at us. I have to hope it's just a lot of rhetoric and that the rhetoric will come down and the reality of governing will come into play."

He's worried about the protectionist mood and a possible backlash against products coming in from outside the country.

"I hope our U.S. clients realize the brand-name equity of our products being made in Canada," he said, adding that many of his customers – including Costco and Wal-Mart – currently view Canada as a "51st state" because of the seamless trade relationship that cuts down on paperwork and logistical irritants.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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