For some Ottawa businesses, the Canada–U.S. trade dispute is no longer an abstract argument about percentages and negotiating positions. It is showing up directly on purchase orders. At Infinity Flooring in Ottawa, U.S.-made carpet products are facing Canadian counter-tariffs ranging from 25 to 50 per cent, with the company saying some orders have become thousands of dollars more expensive. Canadian substitutes exist for certain products, but the retailer says availability is limited and demand is rising.
The experience offers a close-up look at a much broader problem. Canada’s latest countermeasures cover billions of dollars in U.S. imports, leaving companies that built supply chains around American manufacturers trying to decide whether to absorb higher costs, raise prices, delay purchases or find new suppliers.
A Flooring Store Shows How Fast the Costs Can Hit
At Infinity Flooring, a locally owned Ottawa-area business that has operated for decades, the impact is particularly visible in its carpet selection. Co-owner and managing director Heidi Gagne told CTV News that a substantial portion of the American products displayed in the store are now tariffed. Depending on the materials involved, some of those products face rates of 25 or 50 per cent. Canada’s official counter-tariff schedule confirms that several categories of U.S.-origin carpets and textile floor coverings are subject to rates at those levels.
The effect can turn what once looked like a normal renovation or commercial flooring order into a much harder purchasing decision. Gagne said some orders have risen by thousands of dollars. For a business selling to homeowners, contractors, property managers and commercial customers, that difference matters because flooring projects are often planned around fixed budgets. Sales representative Gloria Beaucaire, who has worked at the store for more than two decades, also pointed to the human side of the problem: customer traffic ultimately supports the employees whose livelihoods depend on those projects continuing.
The Tariff Math Can Turn a Routine Order Into a Budget Problem
The percentages can sound manageable until they are applied to a large shipment. Canadian surtaxes on covered U.S. imports are generally calculated as a percentage of the customs value of the goods. That means a tariff rate can add substantial cost before a product ever reaches a showroom or job site. As a simple illustration, a tariff of 25 per cent applied to $20,000 worth of covered imported goods represents $5,000 in additional tariff cost. At 50 per cent, the same customs value would produce $10,000 in tariff cost.
That example is not a calculation of any specific Infinity Flooring order, since actual costs depend on tariff classification, origin, customs value and other factors. It does show why businesses describe increases measured in thousands rather than a few extra dollars per item. The importer must ultimately decide where that additional expense goes. It can be absorbed through a smaller margin, built into the customer’s price, shared between the business and buyer, or avoided by replacing the product entirely. None of those options is painless when customers are already sensitive to renovation and construction costs.
Canadian Alternatives Are Not Instantly Interchangeable
Buying Canadian sounds straightforward until a company starts trying to replace products that have been sourced from established American suppliers for years. Infinity Flooring told CTV that Canadian alternatives are limited and are already experiencing strong demand. That is especially important for businesses that do not simply sell generic commodities. Flooring projects can involve specific materials, appearances, performance requirements and installation considerations, so switching to whatever happens to be available domestically may not produce an equivalent result for every customer.
The federal government’s own tariff-relief framework acknowledges this sourcing problem. Ottawa says remission requests may be considered in cases where required goods cannot be sourced domestically, either nationally or regionally, or reasonably obtained from non-U.S. suppliers. Statistics Canada has also found widespread interest in changing supply chains: among businesses importing from the United States, 39.4 per cent planned to seek alternative suppliers and 26.8 per cent planned to increase domestic sourcing. When many firms attempt that shift at once, established Canadian and overseas suppliers can suddenly be asked to handle demand they were never expected to absorb immediately.
Businesses Face a Choice Between Margins and Customer Prices
Tariffs rarely stop at the border. They move through a business in the form of higher input costs, tighter margins and potentially higher selling prices. Statistics Canada found that 39.1 per cent of businesses importing from the United States expected operating expenses to increase over a three-month period, while 37.4 per cent expected higher selling prices and 36.4 per cent anticipated lower profitability. Across businesses more broadly, 39.5 per cent said they were likely to pass tariff-driven cost increases on to customers over the next 12 months.
That creates a difficult calculation for smaller retailers and contractors. Raising the price of a flooring project may protect the company’s margin but can also push a customer to postpone a renovation, choose a cheaper material or abandon the project. Absorbing the tariff protects the quoted price but reduces the money available for wages, rent, inventory and investment. The Bank of Canada has also found that weak demand and competition can prevent businesses from fully passing higher costs to customers. For a local store, the tariff problem can therefore become a sales problem and a profitability problem at the same time.
Ottawa Has Started Reworking Its Own Buying Rules
The City of Ottawa has been adjusting its policies as businesses face the effects of the trade dispute. A September municipal update said the city was expanding efforts to reduce tariff exposure, increase Canadian content in procurement and make it easier for Ottawa suppliers to compete for municipal business. For purchases between $25,000 and $125,000, city staff are required to obtain at least three quotes, including one from an Ottawa-based vendor, while being encouraged to seek Canadian quotations where practical.
Ottawa has also added language to procurement processes that encourages consideration of Canadian content and non-tariffed alternatives. The city said it is monitoring tariff-sensitive contracts, asking vendors for greater supply-chain transparency and examining other potential sources for goods exposed to tariffs. Economic Development Services is also assigning an officer as a dedicated point of contact for tariff-affected businesses. Those steps cannot manufacture missing Canadian inventory or remove a tariff from a retailer’s incoming shipment, but they illustrate how the dispute is changing purchasing decisions even at the municipal level.
The Supplier Hunt Is Happening Across Canada
Ottawa retailers are part of a much larger reshuffling of Canadian supply chains. Statistics Canada found that nearly two-fifths of businesses importing from the United States planned to search for alternative suppliers, with almost half of U.S.-importing retail businesses saying they intended to look outside the United States. More than one-quarter of U.S. importers also planned to increase sourcing inside Canada. Those numbers show that businesses are not simply waiting for trade policy to stabilize; many have already begun looking for ways to reduce their exposure.
Finding another supplier, however, does not mean an immediate return to the old cost structure. Businesses may have to compare specifications, negotiate new contracts, test products, change shipping arrangements and determine whether a new source can provide enough inventory consistently. The Bank of Canada reported earlier in 2026 that some firms and their suppliers had already made supply-chain adjustments to limit tariff costs. That process can improve resilience over time, but the transition itself can be disruptive. Infinity Flooring’s warning about scarce alternatives shows what can happen when the demand for substitution moves faster than the available supply.
The Trade Fight Has Spread Far Beyond Flooring
The measures affecting carpet are only one small piece of the current tariff landscape. Canada announced that, effective September 8, it would apply counter-tariffs of 15, 25 and 50 per cent to products covering $27.6 billion in imports from the United States. Ottawa said the measures were designed to match U.S. tariffs and concentrated them in areas including steel, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics. Existing countermeasures in other areas also remain in place.
Washington has continued taking additional steps of its own. The Trump administration announced new restrictions in September affecting certain Canadian alcohol, dairy and motor-vehicle-related products, with some import bans scheduled to take effect on September 29. The White House says its measures are a response to what it considers discriminatory Canadian trade practices. Canada disputes that framing and says its countermeasures are responses to U.S. tariffs. Whatever the competing justification, businesses operating between the two economies face the practical consequence: more products, contracts and supply chains are being pulled into the dispute.
Formal Negotiations Are Paused — and Washington Says There Is No Rush
One reason businesses remain cautious is that there is no clear timetable for ending the dispute. U.S. Trade Representative Jamieson Greer said on September 25 that the Trump administration was comfortable with the existing situation and saw no urgency to reach a deal with Canada. He said communication still occurs between the two governments, but formal negotiations remain paused. That message is difficult for businesses whose immediate problem is not diplomatic strategy but the cost of the next shipment arriving at the border.
The two governments also describe the breakdown differently. Canada says it suspended negotiations after Washington proposed terms that the federal government considered economically unacceptable and contrary to Canadian interests. The U.S. Trade Representative’s office says Canada walked away from what Washington viewed as a near-final agreement and then expanded retaliation. Those are the governments’ respective accounts rather than an independently established judgment about responsibility. For companies making purchasing decisions, however, the disagreement creates the same problem: there is no dependable date on which they can assume tariff conditions will return to what existed before the dispute.
Relief Exists, but It Will Not Eliminate Every Higher Invoice
The federal government has introduced several programs intended to cushion companies and workers from the trade conflict. In August, Ottawa announced $7.5 billion in new and expanded measures, including another $1.5 billion for the Regional Tariff Response Initiative and a $500-million liquidity stream through the Business Development Bank of Canada. The package also included $2 billion for the Canada Strong Diversification Fund and $3.5 billion in rapid-response measures aimed at workers and employers affected by trade disruption.
Companies may also seek tariff remission in exceptional circumstances. The federal framework specifically allows requests to be considered when businesses require inputs that cannot be sourced domestically or reasonably purchased from countries other than the United States. That provision could matter for companies facing highly specialized supply problems, although remission is an application process rather than an automatic exemption for every tariffed purchase. Ottawa businesses can also turn to municipal and business organizations for help identifying programs and navigating changing rules. Such measures can reduce financial pressure, but they do not instantly recreate established cross-border supply chains or guarantee that an equivalent Canadian product will be available.
Uncertainty May Become the Hardest Cost to Manage
The challenge extends beyond the tariff written on an invoice. Businesses also have to decide what inventory to order months from now, how much to charge customers, whether to sign longer contracts and whether a supplier that is competitive today will still be competitive when the shipment arrives. The Bank of Canada reported in its second-quarter 2026 Business Outlook Survey that tariff and trade uncertainty continued to weigh on domestic sales expectations and that some firms were encountering higher input costs and difficulties sourcing important materials.
Ontario business data tell a similar story. The Ontario Chamber of Commerce reported that 65 per cent of organizations surveyed for its 2026 economic report expected U.S. tariffs, trade policies and related uncertainty to negatively affect their operations. Businesses were responding in different ways: 25 per cent reported raising prices, 22 per cent were diversifying suppliers and 20 per cent were absorbing higher costs. Infinity Flooring represents only one Ottawa company, not every business in the region, but its experience captures the choices many firms now face. A product can still be available and technically affordable while becoming much harder to sell once thousands of dollars are added between the factory and the customer.
