Wheatless Wonder is a family-run gluten-free bakery known for having cracked the crumbly crust curse for which gluten-free products are known. Their products are now available in over 20 supermarkets, grocery stores, and restaurants across Quebec.
Cathy Schouten, one of the owners of the Huntingdon-based specialty bakery, is concerned the current trade war with the United States will have a negative impact on her small business. The bakery does not export its products across the border, but some of the gluten-free flours used in her bread are imported from the U.S.
“For me, it’s the tariffs that are being applied to the ingredients that I buy from there that affect me, and will affect my clients, because I will have to raise the prices,” Schouten explained, referring to the retaliatory tariffs imposed by the Canadian government on September 8.
Specific types of flour fall under the targeted agricultural and grain product categories included in the counter tariffs now being applied to $27.6 billion in imports from the U.S. These measures were put in place in response to the American administration’s decision to impose 50 per cent tariffs on Canadian goods on August 22 after trade talks between the two countries broke down. Schouten admits she is especially frustrated because the impacts on her business are directly related to the Canadian government’s tariffs.
Schouten uses sorghum flour in her baking, which is imported from Kansas and processed in Ontario. She is certain this critical ingredient will now cost more. “For our commercial clients, I can’t raise prices every week,” she said, noting that large grocery chains often impose six-month freezes on price increases for suppliers. She worries this will compress already tight margins and limit their ability to adapt to rising costs if the trade war drags on.
Schouten explained that she has looked into alternative sources for her flour in Canada, but there are not many options, and they are all more expensive. “Gluten-full grains are available, but there is really not a lot going on in gluten-free. It is really hard to find,” she lamented.
Just down the road in Huntingdon, the MRC du Haut-Saint-Laurent offices are open to business owners impacted by the trade war. The MRC is the point of entry for businesses looking for emergency financial assistance through the provincial government’s Programme d’aide d’urgence aux PME – Tarifs douaniers.
The Quebec government lowered the eligibility threshold for this funding to include businesses with annual revenues between $200,000 and $2 million now facing a 20 per cent drop or more in revenue. Unfortunately, Schouten’s business may not be eligible for that program, as it is designed to address losses incurred due to American tariffs, not the reciprocal tariffs applied by the Canadian government.
However, the Quebec government has also launched a task force to help small and medium-sized businesses to expand into other provinces, secure contracts, and replace American suppliers in the face of Canadian counter tariffs.
“The MRC is closely monitoring the situation. Some businesses are indeed at risk of suffering the negative effects of the tariffs,” said Jean de Dieu Cyubahiro, an economic development advisor with the MRC du Haut-Saint-Laurent.
While the MRC has not seen an increase in the number of businesses seeking financial assistance, an initial assessment has been conducted, and visits are underway with local companies to identify needs and provide appropriate support.