Navigating Tariff: Impact on Canadian Medical Facilities & Strategies for Resilience

Let’s dig into the tariffs.

We’ve been keeping a close eye on the proposed 25% tariffs on imported Canadian steel and aluminum—and here in Canada, the impact on our medical facilities could be significant. We want to break down the facts, share our analysis, and explore some solutions.

What’s Going On?

The proposed tariffs would hit imported Canadian steel and aluminum with an extra 25% duty. While on a macro level, experts estimate such measures might shave off less than 0.1% of GDP, the ripple effects in specific sectors are anything but small. In the medical field, these metals are critical. They’re used not only in high-tech devices but also in building and maintaining hospital infrastructure. For instance, recent news from Fisher & Paykel Healthcare noted that tariffs could delay their goal of achieving a 65% gross margin by two to three years—even though they don’t expect a material hit to profits this fiscal year. Their production model, with about 45% of manufacturing occurring in Mexico and 60% of that volume going to the US market, is a reminder that supply chains are deeply intertwined.

How Will This Affect Canadian Medical Facilities?

1. Increased metal prices mean that even standard components for MRI machines, surgical tools, and hospital fittings could become more expensive.
2. Canadian medical facilities already operate on tight budgets. With steel and aluminum prices on the rise, facilities might need to reassess capital expenditures, potentially delaying new projects or renovations.
3. Volatility in the global metals market can lead to unpredictable delivery times.

What Can We Do?

We believe in proactive strategies to safeguard our operations and support the medical community. Here are a few steps we’re considering:

1. Exploring alternative sourcing channels—both domestically and internationally—to reduce our dependency on any single supplier.
2. By building up inventories of critical materials now, we can mitigate short-term supply disruptions and cost spikes.
3. Strengthening our domestic manufacturing capabilities isn’t just a hedge against tariffs; it’s a long-term win for Canadian healthcare.
4. We’re engaging with industry associations and policymakers to advocate for targeted exemptions or support measures that recognize the unique challenges faced by our healthcare facilities.
5. Adjusting contracts with our suppliers to include clauses that account for tariff-driven cost changes can help ensure that price increases are managed equitably.

We'd love to hear your thoughts and any strategies you’re using to tackle these challenges. Let’s keep the conversation going