The universe works in interesting ways.
Sometimes comedic, sometimes tragic, sometimes both. By the time this is published, I will be on a school bus with about twenty-five fourth-graders. They will be laughing and playing without a worry in the world. Yet, at that moment, there will countless people around the world suffering in their unique circumstances. Right here in Canada, our brothers and sisters, our Canadian family from East to West, are gravely concerned. And they have a right to be.
On Saturday afternoon, February 1st, 2025, the Trump Administration imposed sweeping tariffs on virtually all Canadian goods imported into the US.
By 9 pm Saturday, our current – and soon-to-be departing – Prime Minister, Justin Trudeau, announced counter-tariffs on US goods imported into Canada. The tariffs on both sides of the border will take effect tomorrow, Tuesday, February 4th.
The White House has insisted that the reasons for the tariffs are unlawful migration and fentanyl flows from Canada. Also included are Mexico and China.
Our Canadian politicians and respected news outlets believe this is an excuse for broader and unknown Trump administrative strategies and future policies, especially considering the data doesn’t support the claim, nor do tariffs solve such claimed problems. In addition, our leaders have not been able to get a hold of President Trump to discuss or negotiate.
(And I thought Maple Syrup would be an excellent gift for our American friends on my Thursday trip to Austin. Perhaps now, it’s an even better gift.)
So, what are tariffs?
And how do they affect Canadians?
Taken from Canada.ca
“A tariff is a tax or duty imposed by a government on an imported or exported good. When used appropriately, it can be both an important source of revenue for a government and a tool to protect domestic industries from foreign competitors. Tariffs increase the price of imported goods into a country, making them less competitive compared to alternatives.”
– Canada’s response to U.S. tariffs on Canadian goods
Taken from ThoughtLeadership.RBC.com
“A persistent tariff of this magnitude is recessionary for Canada. If sustained, our initial analysis suggests that tariffs of this size (based on many assumptions) could wipe out Canadian growth for up to three years, with the largest impacts in the first and second years. Our estimates align to the Bank of Canada’s findings which simulate that a 25% increase in tariffs across the board (US and global) would reduce Canadian GDP ranging from -3.4 to -4.2 percentage points, compared to the baseline forecast.”
– A US-Canada trade shock now in play: first economic takeaways
In my own words
There will be a lot of industries and businesses negatively impacted, immediately. This will cause a cascading effect on adjacent industries and businesses, continuing to even further adjacent industries and businesses. Eventually, we will all feel the pinch. Some of us will feel the effects far worse than others. With a slowed economy, rising cost of living, already mass layoffs, and AI technology taking jobs, a trade war with our greatest economic partner will have serious consequences. Many people will be hurting.
Questions?
At this point, I’d expect your mind to ignite with questions like: How does this affect PD? How does this affect my job? What’s our position? What’s next?
We will answer these questions now.
Your job and place at PD
Take solace in that we have no intention of letting anyone go. We have reserves to cover payroll for many months. In fact, you can expect a few more new team members before February ends. We will be moving forward as planned.
Effects on PD
At this moment, we don’t anticipate any immediate shocks to our business, as such tariffs are on Canadian products, not Canadian services – at this moment.
- That said, our leadership team and I have reason for concern.
- Things are moving fast; there are many unknowns.
- We will keep a close eye on political and economic news and report to you new developments.
Effects on our clients
Most of our clients are in the US, and some are here in our backyard. We expect their industries and businesses to be impacted just as ours. Please keep that in mind when speaking with your clients.
Forward we go.
A few things to consider:
1. Our finances are strong but not spectacular.
It is my responsibility to share with you that 2024, while a year of fantastic growth in many areas of our business, was also a year of financial loss. It was an acceptable position we willingly took in early 2024, making a bet on growth, building our company, and investing in the wonderful people we have here today.
This financial update was initially reserved for our Summer Summit. However, with the recent and drastic economic developments, it was important to share this with you.
Moving forward, we will need to be wiser, more prudent, and more frugal with our finances, take cost-cutting and resource-conserving measures where appropriate, focus more on getting client work done efficiently and effectively, and ensure teammates have the support and space to do their jobs well.
(The leadership team and I are still looking forward to Summer Getaway 2025.)
2. POs don’t equate to revenue.
For those privileged to see new POs come through every month, please remember that the money from POs is “funds in trust” and does not belong to us until earned and actualized. POs do not equate to revenue. What equates to revenue are billable hours that are actually billed.
Billable hours, not just working hours, team.
Billable hours that are actually billed.
So, when we inaccurately scope out a project or accidentally go over 10% or 20% and then absorb the overage as unbillable hours, we are further at a loss.
PD is your company, not just a few of ours. Its strength protects you and me alike. If PD is vulnerable, we all become exposed to risk.
Let’s get smart about how we play the game.
3. Be smart with your money.
Be frugal. Don’t spend when you don’t need to. Eat at home if you can. Better yet, take food from PD. Postpone that big purchase. Save for a rainy day.
The weather forecast: a high chance of sweeping rain and heavy storms.
As an immigrant who fled my birth country, I was told stories of how the people’s wealth was wiped out overnight, caused by the invasion coupled with our unstable government. I highly doubt that such a thing will happen to Canada (anytime soon), nonetheless, the lesson was learned and ingrained: Save cash for the rainy day.
The money you save today may come in handy to help out a friend or family member tomorrow. It’s not just about you but about the community you live in and serve.
4. Be wise with your thoughts, words, and actions.
Be extra considerate with people. None of us know the challenges of another.
- If someone yells at you at the grocery store, be kind.
- If someone gives you the finger in traffic, be kind.
- If a client is more difficult than usual, extend a warm smile and a kind gesture.
- Hear a client or friend complaining? Gently bring them to a better place. Give them courage. Encourage them. Remind them: “This too shall pass. We’ll get through this, friend.”
The wise refrain, especially in difficult times, from starting or joining a spiral of negative talk. It is during difficult times when people need your positive light. Be exemplary, and remember Dale Carnegie’s number one principle: “Don’t criticize, condemn, or complain!” (exclamation added by me)
5. In challenging times, be courageous.
As proud Canadians, we have a duty to support each other and, when possible, buy locally to help Canadian businesses. This, however, does not mean we foolishly fall into tribalism, making an enemy out of a friend. We can support our fellow Canadians, and still “love thy neighbour as thyself.”
Regardless of the strife and challenges between our politicians, it is wise to remember that the people south of the border are our friends and allies. Our two countries have a rich history of cooperation, camaraderie, and coming to each other’s aid in challenging times.
Lead with love and courage.
Conclusion
11 pm, Sunday night: In search of a conclusion, I said to Lannie, “I think it’s fine without one.”
In her wise words, she said:
“The conclusion is clear. We are lucky to have work in front of us. We have a responsibility to make something great out of the time we have together. And watch every dollar!”
Further Reading & Watching
+ Government of Canada
Monetary Policy Report—January 2025—In focus.
+ Bank of Canada
+ RBC – Thought Leadership
+ BBC News