SAGUENAY, Que. — It's difficult to drive along the snow-covered roads of Quebec's Saguenay-Lac-St-Jean region without coming across trucks transporting freshly cut logs.
Wood, as well as aluminum, are economic drivers in the region north of Quebec City. They're also both in the sights of U.S. President Donald Trump, whose looming 25 per cent tariffs are leaving businesses in Saguenay-Lac-St-Jean bracing for impact.
Inotech, a company that specializes in manufacturing equipment for the wood industry, said the economic disruption started in early February, when Trump had initially promised to impose tariffs, before delaying them. “In Quebec, the entire wood market was paralyzed," Michel Marceau, the company's CEO, said at a local Tim Hortons in Jonquière, Que.
"People are waiting to see what will happen and during this time, no one is investing," added Michael Dufour, Inotech's sales director.
A recent study from the Canadian Chamber of Commerce identified Saguenay and Drummondville — a city northeast of Montreal — among the Canadian cities most vulnerable to U.S. tariffs.
Drummondville is vulnerable because its manufacturing sector represents nearly 26 per cent of its gross domestic product — almost double the Quebec average and more than double the Canadian average.
“Of course, there will be job losses, that’s clear,” said Gerry Gagnon, general manager of Drummond économique, a non-profit that works in partnership with the city and companies in the surrounding region.
Drummondville Mayor Stéphanie Lacoste said 18 per cent of the jobs in the area are linked to the U.S. "So we're talking about roughly 3,100 jobs that could be at risk," Lacoste said. "I've rarely seen so much insecurity in all segments of the population."
On March 4, Trump imposed tariffs of 25 per cent on almost all Canadian and Mexican imports, with a lower 10 per cent levy on Canadian energy. But last week, after days of market chaos, Trump signed an executive order delaying until next month the tariffs for goods — such as wood-based products — that meet the rules-of-origin requirements under the free-trade agreement between the U.S., Canada and Mexico.
However, Trump has also said he plans to move ahead with 25 per cent tariffs on steel and aluminum on Wednesday.
The Quebec forest industry council said that wood products such as panels, cardboard, and kraft paper are exempt from tariffs for the time being. But Dufour said there is still uncertainty regarding lumber, which is already subject to a combined anti-dumping and countervailing duties of 14.4 per cent.
Inotech offers equipment that allows wood mills to optimize their production. “If wood producers don’t make money, well, it impacts us directly because they don’t do any modernization projects,” Dufour said.
The company also has several American clients and had planned to generate 50 per cent of its business in that market, but may turn toward Europe given the uncertainty. But Dufour notes that doesn't happen overnight.
In addition to lumber, one-third of Canada's aluminum is produced in Saguenay-Lac-St-Jean, and the region exports 85 per cent of it to the United States.
Patrick Dubé, sales director for the Sotrem-Maltech group, in Saguenay's Chicoutimi borough, has four divisions focused on aluminum processing. About 70 per cent of its production is exported to the United States.
“The tariffs are going to hurt us," Dubé said, adding that any money the federal government collects from counter-tariffs should be directed toward exporters who have lost business.
Dubé says governments should ease regulations and the tax burden so that Quebec companies can more easily compete with those in the United States.
Back in Drummondville, the city and local economic partners set up a war room to deal with the impact of looming tariffs.
One of the participants, Claude Fournier, said his company, Sixpro, a subcontractor in surface coatings on metal parts with 160 employees, has already started to feel the effects. Even though nearly all his clients are from Quebec, several of them manufacture parts for products that are U.S.-bound.
"We have some clients who are losing business volume and we feel that the market really has not one, but both feet on the brake right now," said Fournier, president of the firm. "We are already cutting some hours of work on certain shifts."
On the flip side, Placages Beaulac, a wood slicer with 22 employees in Daveluyville, Que., said business has been booming in the past few weeks.
"We had blitzes just before the tariffs last week, they were all American shipments," said Gabriel Beaulac, explaining that U.S. companies stocked up on products ahead of the expected tariffs.
But he knows that if and when the tariffs are imposed those companies will likely reduce their orders or stop buying completely. "These were reliable sources of income that we could lose and that creates a bit of a feeling of panic," Beaulac said.
This report by The Canadian Press was first published March 10, 2025.
Thomas Laberge and Pierre Saint-Arnaud, The Canadian Press
