With the American tariffs that still weigh in the Canada steel and aluminum sectors, a food manufacturer based in Quebec is expanding its operations and bringing the US part of its supply chain to return home.
Ideal Can, a steel manufacturer based in Saint-Apollinaire, which is expanding its production capacity in Ontario next year, bringing it clients such as Sun-Brite Foods, Northern and Weil’s Food Processing, and gives it a greater presence in an important food processing region.
Established in 2008, the company began importing cans from China for the Canadian food industry. Approximately a decade later, he began manufacturing cans nationwide, first for Arce syrup before expanding to other products.
“The independence of Americans [production] It is very important at this time, “said CEO Erick Vachon in an interview with CBC News.” So why [don’t we] Does Canadian steel with Canadian food and a Canadian can manufacture? “
As the United Canada-United States commercial war continues, Ideal Can is one of the many national companies that seek to move their supply chains to the north and maximize the Canadian purchase movement. While some experts say that the commercial war leaves few options for those companies, others say it might not be economical.
Cost increases began before the commercial war
The company’s chatham plant will open in January at the Metal Processing Factory of the old crown. Six new production lines will generate their workforce of approximately 35 workers in total to 100 for two years, which will cost $ 100 million. By 2028, the factory will produce approximately 1.2 billion cans annually, more than 800 million cans that currently leave its plant based on Quebec.
In addition to its expansion, the ideal can is also reformulating a segment of its supply chain that was once only possible to have in the United States, Vachon said. To that end, a Hamilton plant to open in April will cut and varnish the steel sheets and feed them the existing production plants in Chatham and Saint-Apollinaire.
It was promoted as the only manufacturer of Canadian foods, the company’s sales have more than duplicated since tariffs were imposed in March, according to Vachon.
The recent pivot of the company was mainly caused by the tariffs of the president of the United States, Donald Trump, about the imports of steel and aluminum this year, first at a rate of 25 percent in March, then with 50 percent in hundreds of products in June. Even so, the cost of the production of the can was shooting long before Trump’s commercial warfare began.
That was one of the factors that led Sprague Foods, a familiar Canadian company that specializes in canned organic foods such as soup, beans and Chile, to enter business with an ideal can.
“Before the ideal can, there was no Canadian [food] Can manufacturers. So we have had to get from the United States, “said Keenan Sprague, Vice President of Sprague Foods.
Pre-tariffs, one of the American providers of Sprague Foods increased its prices by 76 percent, and the weak Loonie last year weighed a lot in the company’s operations.
The president of the United States, Donald Trump, signed orders that impose 25 percent tariffs on all imports of steel and aluminum, including those of Canada. If that happens, Canadian companies say that consumers will not be saved.
It was for this time that the ideal can approached Sprague’s foods “out of nowhere,” said Sprague. His company began to obtain its Canal Can can in the second half of 2024.
When Trump’s tariffs were imposed earlier this year, Sprague Foods saved them: “The stars really aligned,” said Sprague. “We don’t know what is around the corner, but so far we have been lucky enough to avoid it.”
Given the interaction of the Canada’s supply chain with that of the United States and Mexico, “we have seen a fragmentation of the North American market” since the commercial war began, said François Demarais, vice president of commercial and industrial affairs in the Canadian Association of Steel Producers.
“It makes sense in terms of businesses to resume the production of some of those goods that we let the United States build, produce for the full market. So now we have to manufacture in Canada for the Canadian market.”
Redo not always feasible
However, some experts question how economical it is for Canadian companies to restart the US segments of their supply chain return to the northern territory.
“It could be advantageous for manufacturers to move to Canada whenever they manufacture for the Canadian market,” said Jean-Charles Cachon, Emeritus Professor of Administration at Laurentian University in Sudbury, Ontario.
That is mainly due to the fact that the value of the Canadian dollar is falling and will probably continue to fall in the coming years as the price of oil falls against the dollar and the euro, he said.
“I know it has been discussed in some circles that there are some areas of the economy in which it could be advantageous to bring production to Canada.”
But it warns that the economic promotions of bringing production back to the north will depend largely on the type of steel required by a given company.
“The point is that we talk about steel with the idea that it is a generic product. In fact, steel companies and manufacturers manufacture thousands of different products each year,” said many of them that require different metal mixtures generated by specific software.
“Then, in all those plants, which are extremely expensive to build, that is the main problem.”
