For many years now, we’ve been supporting the local businesses we love and encouraging our fellow citizens to support Canadian companies.
And we’ve been doing this since long before the buy local movement really took off as a result of the negative effect pandemic restrictions were having on businesses at the time.
Unfortunately, support for that movement seems to have tapered off over the last couple of years, only to recently resurface as a response to Trump’s tariffs.
But we’ve been here the entire time, asking why Canadians don’t shop local for their payment processing, and watching as Canadian business owners hand their hard-earned dollars over to the multinational corporations who dominate our industry, rather than payment processors in Canada.
To be fair, many business owners aren’t even aware that there are any Canadian payment processors to choose from.
But with Trump set to impose potentially devastating tariffs on Canadian goods within a matter of days, we figured now is the perfect time to remind business owners in this country that we do, in fact, exist.
Luckily, the payment processing industry won’t be directly affected by Trump’s tariffs, but regardless of that fact, at this point, the more money we can keep within Canada’s borders, the better things will be for all of us.
And one of the best ways we can do that is by supporting local businesses, including payment processors in Canada.
However, this is a huge story, with a lot of moving parts, so we want to provide some context for those of you who might not have been following this story or aren’t familiar with things like tariffs.
So, before we explore the benefits of supporting payment processors in Canada, in the context of Trump’s tariffs, let’s look at what tariffs actually are, what kinds of tariffs have been imposed on Canadian goods, and why Trump claims he’s doing this.
What Are Tariffs?
Tariffs are taxes or duties imposed by governments on imported or exported goods.
They’re typically used to regulate trade, protect domestic industries, and/or generate revenue.
When a country imposes tariffs on imports, it makes foreign goods more expensive in an attempt to encourage consumers to buy domestically produced products instead.
While tariffs can help protect local industries and jobs, they can also lead to higher prices for consumers, trade tensions between countries, and economic slowdowns.
As a result, businesses that rely on imported materials or global trade often experience higher costs, which can trickle down to consumers.
In short, tariffs are a tool governments use to influence trade and economic policy, but they come with both benefits and drawbacks, depending on how you look at it, where you’re located, how they’re implemented, and whom they affect.
Why Is Trump Imposing Tariffs on Canadian Goods?
In a few short days, Trump will be imposing tariffs on not just Canadian goods, but also those coming from China and Mexico.
And the issues here, according to Trump, are the illegal migrants and drugs moving over the American border from Canada, and the role that China and Mexico have been playing in this.
According to a White House fact sheet, in response to what this document refers to as an “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl,” President Trump will be imposing tariffs on Canadian, Mexican, and Chinese imports, as he believes all three of these countries are implicated in this crisis.
The document goes on to blame the Chinese government for failing to stop the “flow of precursor chemicals to known criminal cartels and shut down money laundering by transnational criminal organizations.”
What’s more, it claims the Mexican government has been providing “safe havens for the cartels to engage in the manufacturing and transportation of dangerous narcotics” and points out that there is a “growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada.”
The idea here seems to be to leverage the economic force of these tariffs to coerce Canada, China, and Mexico to stop the flow of drugs (particularly fentanyl) and illegal migrants that are crossing over the U.S. border.
Although it’s somewhat vague on this point when it comes to China, the document says the tariffs on Canada and Mexico will remain in effect “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
These 25% tariffs, set to take effect on most Canadian imports on March 4, will impact a wide range of Canadian goods entering the U.S. market, including everything from cars, machinery, and electronics to food products, metals and minerals.
And the 10% tariff on energy products specifically targets Canadian exports such as crude oil, natural gas, and electricity.
All things considered, while the payment processing industry isn’t directly targeted by these tariffs, it is by no means immune to the broader economic impacts that may ensue.
The cascading effects of an economic slowdown, inflation, currency fluctuations, and potential business relocations could significantly, though indirectly, influence our industry.
With that in mind, let’s look at why now is the best time to support payment processors in Canada.
Why Is Now the Best Time to Support Payment Processors in Canada?
In the context of President Trump’s tariffs, one of the best things you can do is support Canadian-based companies, including payment processors in Canada.
And if you live in Canada, choosing a Canadian payment processor offers many unique benefits that you’re unlikely to get from a multinational corporation.
Having said that, here’s how working with a Canadian payment processing company can benefit both your business and the Canadian economy:
It Keeps More Money in Canada
When businesses use non-Canadian payment processors like Stripe, Square, or PayPal, a portion of their processing fees goes to foreign corporations.
And with tariffs already putting pressure on Canadian businesses, sending more money outside of the country will only exacerbate the economic impact of Trump’s tariffs.
But by choosing a Canadian payment processor, you can keep more of your earnings within this country, while supporting Canadian jobs, businesses, and our economy as a whole.
Lower Fees and Transparent Pricing
Believe it or not, many Canadian payment processors offer lower fees and more transparent pricing than their U.S. counterparts.
At the same time, multinational and U.S.-based payment processing companies may be more expensive due to things like currency conversion costs and higher transaction rates for cross-border sales.
And this can all make a significant difference for businesses that are already struggling with rising operational expenses as a result of Trump’s tariffs.
Protection from Currency Fluctuations
The introduction of tariffs can create volatility in currency exchange rates.
With that in mind, a weakened Canadian dollar means businesses using American payment processors may face higher costs as a result of currency conversion.
Canadian payment processors, on the other hand, can eliminate this concern by operating in Canadian dollars, which prevents you from losing money to fluctuating exchange rates and unnecessary conversion fees.
Faster Processing and Settlement Times
One common issue with international payment processors is longer settlement times, as transactions may be processed through U.S. banks before reaching Canadian merchants.
This can lead to delays in receiving funds, but Canadian payment processors typically offer faster deposit times, ensuring you can maintain better cash flow, which is especially critical during periods of economic uncertainty.
It Strengthens Canada’s Economy During Uncertain Times
Tariffs can create ripple effects across multiple industries, leading to job losses, higher costs for consumers, and overall economic strain.
With that in mind, supporting payment processors in Canada means investing in a homegrown industry that contributes to economic resilience.
And the more businesses that choose to work with local payment processors, the more they can help maintain stability in the Canadian economy.
It Provides a More Tailored Approach for Canadian Businesses
Unlike large U.S.-based and multinational payment processors that serve a global audience, Canadian payment processors design their services specifically for Canadian businesses.
They have a more intimate understanding of industry trends, local banking systems, and the unique needs of Canadian merchants, and this results in a more customized and supportive experience, which helps businesses to thrive despite economic challenges.
Why Now Is the Time to Choose Canadian Payment Processing
With the U.S. set to impose tariffs on Canadian goods, you’ve got to be strategic about how you manage your finances and operations.
That being said, choosing a Canadian payment processor isn’t just about getting better rates and service.
More importantly, it’s about strengthening Canada’s economy by keeping more money within our borders and supporting local businesses.
So, if your business is currently using a processor that’s not based in Canada, then now is the time to make the switch.
The Canadian economy – and your business’ bottom line – will thank you.
If you’re looking for more reasons why it’s time to switch, you should read our article on 5 Signs It’s Time to Switch Payment Processors.
And if you want to learn more about the benefits of working with local payment processors, check out our article on Why You Should Shop Local for Your Payment Processing.
Are you looking to support more Canadian companies? We’re 100% Canadian owned and operated. Book a Rate Reduction Review today to find out how much you can save with Lucid Payments or contact us for more information.
