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A new report by the Federation of Canadian Municipalities, in partnership with the City of London and Ivey Business School, warns that the consequences of the U.S.-Canada trade war are unevenly distributed across the country. The report emphasizes that the industrial composition of a community plays a significant role in determining the severity of tariff impacts, rather than the community's size alone.

Romel Mostafa, an economist and assistant professor of international business at the Ivey Business School, suggests that this uneven impact presents an opportunity to strengthen the "Team Canada" approach, which involves responding to and creating economic resilience. Municipal governments are crucial in this response, as they are on the ground connecting with businesses and residents, providing valuable intelligence to inform federal economic policies.

Municipalities across Canada, from small towns like Mackenzie, B.C., which relies on forestry and mining, to larger cities such as Windsor, Ont., with deep roots in the auto industry, have all had to adapt to the trade war's consequences. These communities face challenges in navigating uncertainty related to an ever-changing economic relationship with the U.S., as highlighted by London, Ont., Mayor Josh Morgan.

The uncertainty has led to a pause in investment and job creation in some cases, while others have experienced job losses or gains. Many businesses are currently on hold, waiting for a more stable environment before making decisions. Despite this, London recorded the highest unemployment rate among Canada's 20 largest municipalities, at 9.1% in March, up from 6% a year earlier.

However, Morgan noted that the city has seen net job creation and a migration of the labor force from smaller communities impacted by the trade situation to larger cities for better job opportunities.

Municipalities across Canada and the U.S. are facing similar impacts, and Morgan believes there is a valuable opportunity to collaborate and share information. He emphasizes the importance of municipalities bringing their unique insights to discussions with higher levels of government and with cities in the other country, fostering a sense of unity and shared responsibility.