P.E.I. could lose $250M if U.S. follows through on tariffs, premier says

P.E.I. Premier Dennis King speaks at an event where the federal government announced that Prince Edward Island has signed on to the Federal School food program, in Mount Stewart, P.E.I., Friday, Nov. 29, 2024. THE CANADIAN PRESS/Ron Ward (Ron Ward/THE CANADIAN PRESS)

Prince Edward Island’s premier says his province could lose $250 million if the U.S. slap a 25 per cent tariff on all Canadian imports.

Speaking with CTV News on Friday, Premier Dennis King noted there are many uncertainties at the moment, but information presented by P.E.I.’s finance department showed tariffs could cost P.E.I. $250 million from a budget that’s a little over $2 billion.

“That’s very, very, very significant in terms of potential impacts of job losses,” King said. “You’re talking in the vicinity of maybe 1,500 people, which in a small place is a very, very significant impact.”

“I hope none of those things come into play. But we’re in very uncertain times here.”

P.E.I.’s main exports to the U.S. come from its agriculture, fisheries, pharmaceutical, bioscience and aerospace industries.

King said the province exports approximately $1.8 billion worth of goods to the U.S. each year—nearly 25 per cent of the P.E.I.’s Gross Domestic Product (GDP).

“It’s a huge, huge piece of our everyday business,” King said, noting the integration between their economies is longstanding. “We need that to continue.”

Last week, King led a P.E.I. delegation of politicians and industry leaders on trade mission to Maine, New Hampshire, and Massachusetts to make the case that tariffs would be bad for business and customers on both sides of the border.

“We’ve taken to calling it the ‘Trump tariff tax,’ because at the end of the day, the end user pays for all of the input costs along the way for these products,” the premier said.

King says he hopes P.E.I.’s interests and efforts with the U.S. are “more top of mind than it has been,” as we approach Donald Trump’s inauguration on Monday.

The group spoke with between 400 to 500 people, including governors, senators, mayors, business leaders and chambers of commerce. Those on the mission said everyone they encountered shared their perspective that a tariff on Canadian imports is not a good idea.

“We’ve got shared values. We’ve got shared infrastructure. We want to see prosperity on both sides of the border,” Ian MacPherson, executive director of the Prince Edward Island Fishermen’s Association, told CTV News. He pointed out how fisheries in the Maritimes and northeastern U.S. complement each other.

“There’s plants on both sides of the border, and they depend on product, coming from the U.S. to Canada and Canada to the U.S. to remain efficient and competitive,” MacPherson said.

More than half of the potatoes that P.E.I. produces go to the U.S., either as fresh potatoes or frozen goods.

“(There are) very significant market long-term relationships there,” Greg Donald, general manager of the P.E.I. Potato Board, told CTV News. “Anything that, would, impact that is obviously a huge concern to our industry.”

Donald highlighted how the relationships those in P.E.I. have formed with their business partners in the U.S. weren’t just built overnight, but they’ve evolved over generations.

“It’s not like we can go out tomorrow or next week, depending on what happens and find alternative markets,” said Donald.

Ray Keenan is co-owner of Rollo Bay Holdings, a family-owned potato farm that grows, packages and markets its potatoes, sending between 65 to 70 per cent to the U.S. He sees tariffs as counter-productive to keeping prices down for consumers.

“How we react to it depends on, first of all, if the tariffs do come up,” Keenan said. “There will be a reaction from the marketplace. Inadvertently it’ll come in higher prices at point.”

Keenan said he wants to encourage suppliers to keep their faith.

“We will get through this. We’ll come out stronger for it. In the meantime, it could be painful.”