Navigating Tariff Uncertainty: Recap of Essential Strategies for Canadian SMEs

so welcome everybody coming in uh to the global growth series on mastering cash flow uh amidst all of the Tariff turmoil going on um it has been a very interesting few weeks I'm sure for everybody so this session is going to go all you know go into detail we have some really great speakers coming in here to talk to you about what you can do to mitigate these things and uh where to go from here so to get us started for the day um what is you know the global growth series what are we offering here to give us a better understanding of the program itself so uh first things housekeeping um for everybody coming in just so you know we will be uh you will be receiving the recording and slides in a follow-up email so everything that happens in this session you will receive afterwards um and there are different functions in this webinar so you can there's a Q&A box for asking questions and then using the chat for more General discussion so we it should be enabled for everyone and so for the chat itself just general discussion and asking questions in the Q&A box itself and that's where so we're only going to be answering questions from the Q&A box just letting you know and any additional questions that you have so if we're you know if there's a lingering question that comes up afterwards or there's something that we weren't able to get to in the session please do follow up at our email at WTC atb.com and we'll definitely get back to you with any inquiries uh as well as you can reach out to our speakers for any lingering questions that you have for them moving right along so Global growth series what's it all about so we started the global growth Series in partnership with communitech um and they might be on the call right now so it's shout out to here and if you are here um and we've been working with communitech now since uh 2023 uh October and this Series has become uh you know how do we help our businesses and our Founders to understand what's going on uh you know a globally and in across trade and how do they move into these new markets uh and so we leverage that through our communities and our combined uh you know programming and uh Consulting we work heavily with the trade commissioner service especially for a lot of the different webinars that we've hosted previously um and so we want to empower ourmes to equip them with you know all of the structures and strategies for them to overcome these barriers uh and enhanced Global reach from

that what are who are we to talk about these things well the World Trade Center is the Trade Services scaleup arm of the Toronto region Board of Trade which is the Chamber of Commerce of Toronto and so we like to you know build Champion for Canadian smmes through our different programming um I'll go to our next slide should have kind of a breakdown so these are our two main programs the executive certificates and the trade accelerator program um it has a different criteria for this but the objective of both of these is to really Council on you know Global expansion and what you need to do um and so we have a whole network of experts on exporting on um you know what's going on in terms of uh different trade topics and expanding on those topics so things like Capital funding or looking at taxation or sales and marketing specifically so um it's really all about how do we equi our smmes to go abroad and then our partners communitech are all about Founders um so they work very strategically with different Founders specifically in the tech space um and that you can learn more from Community Tech themselves there's a QR code right there um as well as we'll be sending uh follow-up links to uh go to their page to learn more

so lastly with everything going on specifically we've pivoted especially in our Global growth strategy to really hone in on um what is happening in the US uh so this the next series so there is one that's actually upcoming as well which is next week March 6th um and that one as well as with this one are all kind of understanding what this impact is going to have on uh our businesses um but strategies that are already things that you can do and take in place uh to mitigate those uh so there is we really are looking for feedback on what challenges our companies are having so that'll help to provide for like the topics at hand um what you're seeking to understand about these things so please do take the survey it's linked here you can also use the QR code there uh to be able to go through uh it again it just really provides us with uh a number of like what the impact is and how we can provide support uh so we would really really love any information you can uh provide for us I'm going to move into our first Speaker today is actually Venus mirandi who is uh my colleague at the World Trade Center Toronto he's one of our program managers and venicius himself has been a business owner and has led many different uh businesses abroad so um he is going to talk about some things uh himself to kind of start us off and give some highlights here and then we will get into our next uh section so Vinnie I'm going to hand it off to you thank Cecilia good afternoon everyone Cecilia mention my name is venicius but you can call me Vinnie is easier H so I am the trade and growth programs manager at the World Trade Center Toronto and my objective today is to share a personal story that I experienced uh few years ago and just to make a connection with the topic that we will discuss today so in 2009 uh I decided to start building houses in Brazil together with other two partners and the business uh was uh going well uh we started building some houses for poor people in in a poor region in Brazil because the the government there was offering a government grant for poor people so we saw this as an opportunity we start building and uh build building some some houses then after building uh multiple houses we were building and selling building and selling everything was working well it was a PR profitable business uh we had a meeting and we discussed why why don't we think big and why don't we build a building a condo with multiple units because then we can dilute the of our land and have more profits so and then we decided to build a building and uh so when we started I'm not an engineer and then we found an engineer I hired a contractor and then I learned that I should have spent more time doing the due diligence of this contractor and then we started building this building uh but then in the middle middle of the construction we noted that our costs were growing fast faster than we were expecting and then H we were trying to identify the reason why this cost was growing fast and we couldn't identify the reasons but then after investigating uh we identified that the contractor that we hired was using the construction material from our Construction in other buildings in other constructions he was selling the construction material from our construction so we ended up firing him uh long story short uh we had to hire a new uh contractor and we discovered that uh our cost H went up in 80% so to finish the building uh we would run out of cash and I don't need to say that uh all the profit from this business disappeared and then we had a loss in this uh B in this endeavor specifically so I would like to share just my lessons learned and made make a connection with the moment that we are facing with this trade war with the US so what were my Lessons Learned in this case first I should have worked with multiple scenarios especially now we are in a times of uncertainty so it's important to have multiple scenarios I was talking to an entrepreneur this morning and he traveled to Poland traveled to German because he was Finding other sources ER other options for him to Source uh materials from his business so one of my Lessons Learned was related to the scenarios my second Lessons Learned H avoid putting all the eggs in one single Basket in my case I I I did a big bet I did a big bet investing in a a building and when my uh costs grew up I was in trouble and if I couldn't Finance uh my operation I would run out of cash and I ended up raising Capital with more than 20 sources from family members Banks and uh the the other lessons learned that I had here in this business was that try to use this opportunity to negotiate your payment terms we had to renegotiate our payment terms H so sometimes you need to extend some payment terms to buy a briefing room and just like unexpected tariffs hikes interest rates can kill your profit in our case the interest rates killed our profit so er this is something that we need to pay attention Okay other tip here uh from my lessons learned never knock on A bank's door two weeks before you need so build a relationship with your financial institutions because we had to raise Capital with more than 20 sources and we ended up raising with family members and I don't recommend to do that okay so why we we couldn't raise more Capital with banks because we didn't have a history a credit history enough and I knock at the door of the banks uh maybe one month in advance it was not enough for the moment that we were experience control your expenses and one other tip here uh is to maintain an adequate cash reserves in our case uh we didn't have a buffer h a cash Reserve to help us and uh I know that this quote H is old however it's uh it was true for me and it's even more true now that cash is King ER in for and when I say cash is King this was a an a Lessons Learned for me but this can be applicable for any size of business it can be a 1 million business a 10 million business or a 1 billion business H the problems with cash flow are the same uh I have never had a a 1 billion business but I know that the problems are the same so that's the idea for today uh to share this story just to make a connection with the moment of uncertainty that we are experience but I will leave to the experts in the room to share their thoughts on the topic that we will cover today okay thank you Cecilia thanks so much finny much appreciated and yeah we're gonna move right into and any questions for Vinnie as well um please do put them in the chat he will be here for the Q&A sections one reminder now that kind of everybody's popping in here again everything is recorded and and the slides everything will be provided Ed afterwards in a follow-up email uh make sure to ask your questions in the Q&A and use chat for General um but I am going to introduce our speakers for the day here we have uh Paul will be our first lineup from the CFO Center and then moving into Nazar and Peter from The Royal Bank of Canada and Paul I know you're going to get us started here so I'll move into you great thank you so uh here to talk about how to master cash flow amidst all this tariff turmoil um I'll talk a little bit in generalities but obviously there's a number of different uh uh stories that we could bring of what we're doing with clients and the challenges that uh you know all of you are facing and and in some different ways uh to think about it so start off with with a quick quote that uh many of you may have seen um if we can flip to the next

slide um you know what we're seeing is a lot of cost so Jim Farley from the CEO of Ford Motor Company he's like there is a lot of chaos going on and we're all seeing that uh you know let's be honest a 25% tariff across uh Canadian and Mexican borders will create unprecedented disruption in the US industry as well so you know we're we're seeing a lot of talk um there there is a lot going on um you know there's there's nothing in place yet obviously next week will be really interesting and there's uh a couple more deadlines so there's the you know the one that's coming next week and then we'll have March 12th and then April 2nd so a lot of additional tariffs that might be coming into play so the question is how do we manage costs uh next slide please um you know in in in times of disruption we have to be quick to to uh you know adapt and understand how to survive I think the the the most important thing and we we heard Vinnie say this as well um having a number of different scenarios so what does that mean um doing scenario planning is is is critical for for helping businesses survive it's understanding all the different situations that might come up and exist and then planning for reach right it's it's a matter of just being prepared I think is the most important thing um sensitivity analysis understanding what uh you know a 5% 10% difference in uh your margins in your profitability what does that mean uh you know how do you manage cost in a more careful way how do you start to think about if Revenue goes down by x what do we do right and um we were doing some of the sensitivity analysis you know almost exactly 5 years ago now we were doing for a number of our clients helping them think through okay well if you know um you know our customers just stop buying and we lose 20% 30% 50% of our Revenue what do we do how do we plan for that what do we need to be thinking about and then once those things occur you've already thought through it you've already thought about where your financing is coming from where you might have to make Cuts where you might have to change be that suppliers be that customers really thinking through all of that and then also thinking about the positive side so we we'll we'll talk more about that shortly um understanding what costs can be passed on and what costs can be absorbed understanding how long you can absorb costs you know some of our clients are saying listen going to try to maintain uh our pricing to our clients yes we're going to lose a lot of margin how do we do that how do we actually think through what the true benefits are obviously with the Canadian dollar dropping um some of that pricing might be okay so you look at the US how much they're paying if the Canadian dollar continues to drop they continue to maintain uh their us price um you know that might actually offset some of that tariff cost um and then how much more can be absorbed depending on what those margins are and what products or Services you're you're currently selling so um really thinking through that's the key to scenario planning understanding all the different opportunities that you have and the different situations that might um come up over the next month and obviously over the next four years as well and then going from there um next slide so what what do I want people to do really stay informed this is the first and most important thing it's hard to adapt when you don't see what's coming um being more agile understanding what's affecting your industry you know right now they're saying uh tariffs across uh the board right about you know but that might change right there might be exemptions there might be set things that will have reduceed tariffs so really understanding all the different pieces uh you know kind of reducing misinformation separating out what might be said what might be tweeted um compared to what actually will be implemented you know obviously the next week or two will be very very important to understand what will come up um obviously there's a lot of people a lot of different sources you can find that are tra you know that are kind of tracking the The Daily News and understanding what tariffs will exist uh the Canadian government websites are are really talking about um more of retaliatory tariffs as well and what might that look like so really understanding both sides uh obviously the World Trade Center is really helping with that as well and you know there's a number of different other organizations um you'll see more and more of that show up over the next uh few weeks and months um where there's going to be dedicated Resource Centers things like that that you can rely on ourselves included we're doing some of that as well to make sure that our our clients and and and broader beyond that people are are prepared and know exactly what they need to be doing so definitely uh keep on top of that but what do we do um oh no we got to go the other way one

more thank you okay so developing a strategic plan so really thinking through as I said once you start going through your scenario uh planning and doing that analysis what you want to do is look at advice before executing on a strategy right um not only get Buy in from uh other advisers that you might have but also look at your employees making sure that they're on board with your plan and your vision understanding that you know some of these plans obviously getting full buyin from your entire team is important but also getting buying um for the time that it takes to do this so entering new markets takes a lot of time takes a lot of effort and takes a lot of investment so really understanding how much Capital you're willing to spend I know uh you know if I tie back to the trade accelerator program that the the World Trade Center puts on very similar conversations where it's like if you're going to uh have a plan to enter a new market really understand how much time that takes and how much money that takes to go right you don't want to go try dip your toil in the water spend three months not understanding that a sales cycle might take 6 months one year it might take longer so really understanding that differences with your products in your Market um and really thinking through how much time you're going to put in but also how much capital and investment that you're going to put in alongside that off there's a number of different programs where you can recruit some costs um you know we could talk about Grant programs things like that where the canting government is definitely helping um but really understand um what you're going into very easy to say hey we should enter new markets we should find new customers but obviously there's um some planning that needs to go alongside of that um understand the differ regulatory requirements right the different standards diplomatic challenges obviously each New Market um will will have its own challenges as well so understanding where you can go I'll talk a little bit more about that later where there's additional support and resources you can tap into but really understanding uh the different approaches that you could take um I always you know talk about test and measure so really try things out understand very quickly how you can evaluate the success or not um and then adjust from there because really what you want to be thinking about is do we end up getting uh the best bank for a buck you can't go chase all new markets at once you really want to understand where their opportunities are for you and then go from

there so um key to this is is diversifying right and I think youve probably heard some of this already diversifying your customers and your suppliers so really thinking about both sides we have to you know be cogent not only of the tariffs but potentially retaliatory tariffs as well and really understanding where you're buying so so entering um you know exploring new markets for buying products through International suppliers also for producing Goods so understanding um where production is today understanding if there's other markets where you could produce um as well as for selling so keeping in mind obviously language cultural foreign exchange rates this is uh you know part of Vinnie's story um exchange rates really really hurt right then this is going to impact the Canadian dollar when we get tariffs um so understanding what that impact is to you as well so understand where you're buying where you're producing where you're selling all of those things will impact that um as a quick example we had uh a client who's now evaluating um starting to produce in in New Markets so they had some production in Canada some production in the US understanding now different markets overseas um they're evaluating you know a lower cost product so now evaluating different opportunities maybe uh producing in China or in other South South Asia markets so really understanding what options exist and then what what the Tariff is impacts are so depending on where they're shipping where their customers are um some of their customers in this case are in the US some in Canada so really understanding the different impacts of um where the uh the products are being produced uh and then what the Tariff will be because of that so country of origin uh lots of conversations could happen around that um which you know was was a whole another conversation that we can um dive into uh working with the government uh there's a number of different agencies obviously really get to know EDC the Trade Commission service um Canada has 15 free trade agreements uh so really understanding that goes across 51 different countries including e the EU UK Japan South Korea uh the entire transpacific so really understanding the different opportunities so very similar to uh you know what was NAFTA or kusma or usmca um their agreements with uh in those other free trade agreements very very similar um you know that there are opportunities in New Markets to go um and the Canadian government has put a lot of time and energy into those so take advantage right really understand new markets at you committee um you can get support for entering into um both financial support but also you know uh introd introductions things like that um you know look into uh working with EDC and the trade commissioner services so I'll leave that there um and then look across the country I I will continue to to mention this look across Canada um both for suppliers and customers the interprofessional trade barriers things like that they're going to be reduced they're going to be removed things are changing quickly on that side so uh you know a little bit of Silver Lining to what's happening now um there's going to be more opportunity uh across Canada so really look into that depending on what your product is um and what the limitations might have been in the past uh some of those will go away so so some good things happening across the country for

that now in terms of uh operational efficiency how do you improve that how do you start to think about uh optimizing your processes right really being more agile um you know the big thing is uh reducing costs so really going through your entire uh expense side really understanding all your overheads understanding your cost of goods really diving into um looking at where you can make reductions across all of those adopting technology is obviously very important uh you know investing in automation understanding how to make your manufacuring process more cost- effective make it more efficient um really then that will drive uh you know your margins up to offset some of the the tariffs that might impact you um and increase competitiveness so with that you can start to you know as we talk about entering new markets selling more right so um you know one one client we have actually had a really interesting comment he said listen I'm about to uh invest a ton more into my product we're still going to produce in Canada but we're going to drive the price down so much that even with the tariffs we're going to be way more competitive than any um us producer so he's actually expecting um his his revenues to go up in the US in the face of this so just with some of that investment so look at what you could do and understand that um that there's always opportunity there as well um and then doing a full cost analysis so so really understanding where changes could be made um where where costs can be reduced understand go back to your suppliers uh renegotiate contracts really understand where there's some opportunity to to drive additional savings uh 1% uh tweak here and there uh s starts to add up pretty quickly um when you can look at uh you know driving that margin so understanding every single cost from a from a you know all your cost of goods all the inventory understanding uh your raw material costs understanding overhead costs all all your Capital cost as well as you look at equipment man manufacturing equipment machinery um looking at the repair cost the maintenance Cycles so there a lots of different things that you can look at depending on the business

inventory so I I I I quickly touched on that but really understanding uh what you're holding raw materials work in progress uh finish Goods understanding all the different components there of of how much you're holding um it's uh you know again talk about Vinnie's comment around Cash's king that's what you're looking to drive here when you're doing that so understanding what um you know your your customer lead times are your supplier lead times are the demands on that and then how much uh inventory you need to hold and carry um in the meantime right and then looking at aged inventory if you need to uh discount to to start to move some of that inventory if it's uh sitting around too long really understanding how to uh get more uh cash back in um that's important again I've already talked about re uh reviewing your supplier and your customer contracts um be aware of all the longer term pricing commitments that have already been made look at any renegotiation options I think the challeng is um you know we've we've had some conversations around who's paying for the tariffs you know fine is that defined can that be clearly defined in contracts can we now start to adjust contracts to say okay well if I'm just passing that on is that getting passed on to their customers what happens there right understanding all the different impacts if you want to split that right how much can be absorbed uh on on the seller side versus the buyer side uh and then really understanding um you know where you could be renegotiating some of that um and then lastly you know around Shifting the product right understanding um can you be uh we've had a lot of conversations around um a lot of customers said uh we'll buy x amount in advance so trying to just bypass the tariffs um you know there's there's a potential onewe Runway right now of shipping product into the US getting it to uh you know your customer site um before tariffs come into effect so there's a lot of um additional buying that's happening right now um and there's benefits there there's a small bump in terms of uh cash flow potentially in terms of revenue for sure but really understanding the longer term impact as well so planning again will be the the key to this it's how much uh inventory do you have how much can you ship in advance how much can you bring over the Border um to save on that tariff cost before it comes into effect so thinking through some of these is is vitally

important and then uh you know we'll talk about financial resilience what does that mean uh you know prepare for the unknowns um how do you do that uh really ensuring uh that your company has access to credit other Financial Resources again um you know uh Vin I love your story so I'm going to keep uh tapping back to it you know get to know uh your Banker get to know alternative lenders really be prepared for some of this right have that relationship to understand um where Capital can be uh you know um where you can obtain a capital from be that your your lender understand alternative lenders um there's a lot of different options not only with your line of credit but um there's factoring there's a which asset base lending um letters of credit which I think uh Peter and assar will probably talk a little bit about there's a number of different Grant programs out there um and likely there's going to be additional Grant support or government support that will come out as well um so keep keep an eye on that um I'm sure there will be um for certain industries potentially or across the board there might be some uh support programs that will exist uh depending on how this plays out so again a lot of unknowns at this time but uh you will have to start doing that planning um again you don't want to approach the bank with with you know I need money next week uh you want to be looking at um deepening that partnership having uh you know that relationship where they understand where the business is going what the risks are as well um so they can go internally and kind of um you know fight for you on your side um to get what you need

uh and then evaluate your structure evaluate all the different uh policies that you have um you know the US might still be a good idea to sell into very simil muchar to the story I mentioned there's still opportunities understand whether that means um you know are we have clients who are evaluating um do they open up a facility in the US do they open a sales office in the US what does that mean what are the different variables that come with that what are the pros and cons there um you know if you're setting up new facilities there to manufacture um you have to understand what that means and then um we have other clients who have uh you know they're setting up a second office there you know you want to review um if you're doing transfer pricing you have to evaluate that policy again any intercompany transactions I'm sure there'll be uh renewed interest in reviewing so make sure that policies are in place uh you know work with your accountant and your lawyer too um to make sure that you're doing the doing that in the right way um you know there's opportunities to reduce pricing um which then will reduce the associated tariff so understanding what the Tariff is is being calculated on I think is important to what I'll say here um if you understand where they're doing the calculation make sure you're removing all the additional costs that come along with the product sometimes as a very quick example um transportation costs will be embedded in and and people will put that on their invoice and send that out you want to strip that all away because uh tariffs don't apply to those um to those Transportation cost as an example it's it's the cost of the good itself and the packaging that comes along with it but you want to make sure that you're not paying uh tariff on on additional things that that wouldn't count otherwise so look at at that as well so as I said make sure you're you're chatting with your advisers to make sure that you have the right corporate structure in place you have the right transfer transfer pricing policies in place and all of

that and then uh lastly really it's uh identify the Strategic opportunities look at the other side of it as well um you know it's possible to thrive in these times uh it's possible to build a stronger company be more proactive um as I said there there's opportunities as as you're probably hearing quite a bit looking at new markets understanding where you can produce lower cost Goods um understanding where you can start to um bring out uh new opportunities for your business obviously every business is a little bit different um but look how you can differentiate your products targeting more Niche segments obviously as you have a more Niche product um this builds out uh kind of a creative mode for you where you could still sell into the us the demand will still be there regardless of these additional tariffs uh you know so start to build out uh some of that uh and then identify Global needs as well you know if the Canadian dollar does go lower um you know there there might be some uh additional opportunity in markets that you might have looked at before where where cost was a barrier now some of that cost will be uh reduced just based on the the change in Canadian dollar so continue to evaluate uh additional opportunities there uh and then the very last comment um engaging in in advocacy see in lobbying um there's some opportunity to work with government bodies with policy makers um you know get exemptions uh to get reduced tariffs uh you know critical Goods there's there's a number of different things that uh are not clear yet obviously there's a lot of unknowns so um there's ways to get involved on that side as well um where you can uh start to um maybe um you know engage in the right way and get changes made so that that's it for me um happy to to chat more answer any questions if there are any

excellent much appreciated Paul and yes so we have uh some questions also I'm just going to you know double check in our section here for anybody if there's anything new if anybody has any questions pop them in the Q&A now um but I will start with some of the questions we already have going so first question here is what are some common mistakes that businesses make when managing cash flow so maybe common mistakes that you've seen or even a case study of a a situation that you've seen sure yeah I I think uh you know the first thing that we try to do with all of our clients is is get them to build out uh a 13we rolling cash flow forecast so knowing truly week to week what you're spending what all your expenses are When You're Expecting uh cash to come in from revenue so understanding that revenue and cash are very very different so understanding all the inflows of capital to to the business but then also the timing of the flows is is critically important so this uh rolling casual forecast what that means it's constantly being kept up to date so this is how you can understand when you can make investments when you can make purchasing decisions uh when you can start to hire or make changes in the business um I would say that's probably one of the key things that most businesses don't have in place um you know they they'll log on to their bank account and look on the online and say oh well that's how much cash I have well that is just number it it it doesn't obviously take into account the inflows and outflows that might be happening next week next month so being um very very clear on what's coming up and understanding all of that um will help you make better decisions amazing and we have someone who is uh actually also wondering if you can say a little bit more regarding the practic Practical advice uh that you gave on invoices um more practic iCal advice uh so so invoicing there's a number of different things depending on on on how you're invoicing um what you want to be thinking about is is getting invoices out faster getting them paid faster so so that again from a cash flow point of view um but then also understanding uh you know what what you can do I think you might be talking about splitting out things on your invoice is probably what what you're referring to where um depending on how tariffs are being calculated you'll be looking at the invoice and they'll say great so now um there's some businesses that have kind of embedded a total price onto that and haven't split out all the different costs so the comment I was making was around warehousing as an example so um you want to be splitting out all those line items on your invoice so when tariffs are being calculated and obviously there's lots of unknowns still but as they're being calculated it's on the good itself so the finished good um you want to be making sure that that's all that you're being um tariffed on or the you know the the buyer is um paying not on additional costs that wouldn't be tariffed if they weren't bundled in absolutely and actually to that point because I know uh Paul when you were talking about especially these conversations that you'll have with your customers um one of the big things that we're going to be talking about in the March 6 webinar as well uh is that like tariff proofing your pricing and profitability and really going into like those Communications that you have with your customers um so that's one thing and uh I think Carlos can pop that link in the chat for anybody also interested in a little bit more delving into those conversations because I know that they can be very nuanced um and they're going to be obviously areas that you want to address and uh what the impact will be on your business um but yeah so our next question that we have is how can businesses strengthen relationships with banks or lenders to maintain Financial flexibility awesome uh yeah so that that's uh to me a great question it's it's it's about being open and honest that's the simple way to think about it I think the challenge that most business owners face is when things start to go wrong is when they they pull back they stop having the conversations the communication slows down um they're they're not providing uh kind of that Insight because I think there's some fear around oh if I tell them too much things will go wrong or they won't help me um when really if you built a relationship with the bank over over you know time as you run your business they'll be there for the good times and the bad all businesses are there when things get you know they understand that things get tough in businesses so what you want to be doing is is showing them both the the the positive and the negative but understanding that you have a plan right don't just be like okay everything's going wrong and you know uh throwing the towel in but it's about here's a dip you know things happen this is very normal in business of course there's economic cycles and there's uh you know interesting challenges like tariffs that come up all the time if you now have a plan if you show them hey we've done some scenario planning here's what going to do if these things happen here's how we're going to think about it so here's how much Capital we need but here's the changes we're making as well so when we talk about reducing cost bringing down um you know your your overhead things like that understanding all the different variables they're going to look at that and say great this is a business we still want to support these are smart people doing the right things they're thinking through it the right way and then they will be able to help support and vum obviously their risk parameters are different this is why I also spoke about alternative lenders so understanding um that you you might go to your senior lender for certain things but then you'll have Alternatives as well that you just have to be aware of so um you know there there's a number of different opportunities in the market to to sort with that but I think very clearly to answer that question is communication is critical absolutely and I think we'll have a a couple more here so uh one I think also touching on what we talked about with the kind of invoicing and uh uh thoughts on invoice financing to create cash flow liquidity yeah so so factoring is is a very common way to do that U so so understanding what you can Factor what you cannot if you already have a line credit with the bank and they're looking at receivables as well so understanding uh that you're not kind of double dipping on that side but um yeah there there's different ways to do it um understand what the costs are of that so how much time you need the cost it takes for for customers to pay you um it starts to get uh expensive in some ways but when you need that liquidity it is a helpful way um to to to provide that fantastic and uh last question here so are there any quick wins or strategies that companies can Implement now so kind of in immediacy uh that would improve their cash flow um this maybe when when we started talking about invoicing I said invoice faster collect faster like there's a lot of small things you could do to improve your your cash flow and it's it's putting in a lot of these um small procedures procedures um you know understanding um someone being constantly on top of both the billing side um and the collecting side but then also on your payable understanding what you have to pay right away what you can um if you pay faster sometimes you can get discounts if you don't have to pay as fast understand that as well so this goes back to building a rolling cash flow forecast um really understanding all the different inflows and outflows it's such a very important thing to um to be able to tile that together because that helps um give you more cash flow it gives you uh more Comfort because you have an understanding of of what you need uh and then you can plan accordingly absolutely all right fantastic so thank you very much Paul um and you are going to be here for uh afterwards as well so for any uh kind of lingering questions and for opening up um much appreciated we are going to move right into our next presentation with Nazar and Peter from RBC

yeah thanks thanks Celia it's Pete bur from trade Finance at RBC apologies uh for the uh the frog in the throat this morning um Nar and I uh uh will be talking to you about sort of how to um deal with imports and exports uh overcome some of the punitive impacts of the tariffs and um and uh work with your bankers and trade Finance professionals to um to uh make the most effective use of your cash flow and well at the same time reducing risk um nzar will be uh walking you through some specific examples so I'm going to hit the front piece and just sort of cover off some of the generalities and then we wanted to make sure we walked you through a couple of examples on importing and exporting which give you some insight into how you can improve your

payments so nzar and I are frequently talking about risk when with customers in international trade when they're importing and exporting and from a trade Finance perspective it's been pretty benign uh dealing with the US has just been sort of greens and maybe yellows with respect to risk of Foreign Exchange but all in all despite the integration of our economies we've been uh we've been pretty stable environment as you know this has all changed if we flip to the next slide this is what we are experiencing now it's just full-on red with country risk and foreign risk payment risk is a little bit uh more risky as well for the most part performance risk is is pretty stable um we won't go into defining those but primarily we're focusing on Country risk and foreign foreign currency risk or foreign exchange risk at this point uh given the Tariff situation so it's all read right now for the for the bankers and the trade Finance Specialists along with their clients uh if we go to the next slide we'll start to look at um you know generally how the tariffs effect so if those are not super familiar with tariffs um initially when Goods enter a country they're classified by customs and some of these have government mandated tariffs to add uh that add a cost to the what the buyer must pay and that's what the US is proposing uh for Canadians uh exporting to the US so our goods are being tariffed uh sometimes 25% or more and uh further announces have been made today uh for a full-scale tariff assault on uh on Canadian Goods so um initially if we look at that uh hierarchy there's an uncertainty shock from the tariffs there's a frontloading of inventory of moving of in inventory into the us right now from Canada to try to avoid the impact of the tariffs prices are rising on our Goods uh in the US and demand may drop and then on the Canadian side there's sort of retaliatory measures that we're proposing and all of this can have impacts on our secondary industry so while you may not be uh impacted directly by the tarist you may be feeling the knock on effects and then longer term down the road there's sort of a Bank of Canada response and some fiscal and policy uh um and fiscal policy supports after that um but that's kind of where we stand right now and and how it's impacting it all depends on what business you're in and how you're impacted if we go to the next slide you know this is kind of the Shocker that we're dealing with right now you've been hit with UF us tariffs or you're facing uh us uh tariffs potentially what do you do now uh I think the first thing to do is acknowledge the problem's not going away we got to get on Team Canada and adapt our businesses and look outside the the U outside the US for trading partners uh we need to engage your Banker your trade specialist and your accountant and lawyer you need to use all the services that are available to you so we happen to have RBC global trade uh connect trade resources at RBC which helps you if you're just getting started looking at other countries um uh and and uh investigating foreign markets so there's a ton of uh sort of resources out there um across the country with uh government resources Industries um and Banks as well and financial institutions and uh agencies like the Board of Trade uh you got to monitor what's happening in the situ in the Tariff situation Paul uh Paul hit it nicely just keep tuned in and make sure you know what's going on Board of Trade has great information coming out the banks industry government EDC all kinds of stuff is available the last thing we want to say is just be brave you're in a good position for negotiating we'll give you some tools to help you out but you just need to come out it with a stronger position so be brave and then

slide I I mentioned global trade resources um Global Connect trade resources the official title but on the right you'll see just a screenshot of what you can do if you have a product or a service or HS code drop it in there indicate whether you're importing or exporting and select a country and it will give you really meaningful information in terms of taxes and duties and other resources such as uh industry associations and business networking uh opportunities um Lots stuff there for over 190 International markets um so you don't have to be an RBC client to use it and uh this is just one example of many the other banks have uh have great resources available too as we said all kinds of uh information available to you if you look for it if we go to the next slide there there are five key things that RBC is recommending you do to prepare your business for the tariffs and we're going to we want you to evaluate the risk within your industry you know examine your inventory supply chain and customer base then run scenarios do some scenario analysis so that you're you understand the impact of the tariffs on your cons you know your products demand you're going to research new revenue streams and finally you'll look to uh streamline your business operations in response to this new environment so if we move forward there great the first part is evaluating the risk within the industry and some uh Industries are more trade sensitive they're more and Export you know impacted and those are the ones that the tariffs are going to have most impact on right now the automotive industry is is is very key to this they move on average something like 10 times uh inputs go back and forth between the countries uh and they're going back and forth before the final product is made so obviously a massive impact metal and Manufacturing construction agriculture all high on the list but as well some Industries are uh you know indirectly impacted as we say so if you're in Hamilton and you're impacted by you know steel tariffs on the local steel industry uh your restaurant may be impacted in a negative way there so you have to be prepared for that uh and if your you know business relies on goods for imported from the US just make sure to go to the government resources where they have the list of uh proposed tariffs or tariffs imposed and get familiar with it without resources available okay next slide the second um goal that you're going to have is to examine your inventory supply chain and customer base and Paul's covered that off really well um if you export to the US your products are going to become more expensive and potentially less competitive for your us comp you know customers so your demand may soften your margins may impact it and and cost cutting measures may be necessary if you import to the US um retaliation tariffs will likely occur as they are and the price you pay for us Goods must rise and your margins may take a hit so take a good look at that look at your profit margins and think about sourcing your inputs from other uh jurisdictions so if we move ahead now the third uh thing you want to wanting to do is run your scenario analysis based on the the fluid environment uh We've we've got four key areas that we've uh highlighted in the next two slides and I'll just move through them quickly um but we can refer to them later I just want to make sure that you will get this presentation at the end we'll move through it fairly quickly on some of these examples but um you will have access to this so the the key impacts here are uh your scen scenario analysis should involve um analysis of what if sales slowed and you know the possible solutions there are going to be you know exploring alternative markets um adjusting your approach in your marketing and maybe finding a new audience if your profits take a hit excuse me if your profits take a hit you're going to look at your market analysis and consider raising your prices finding alternative suppliers and other ways to reduce your fix and operating costs which Paul talked about so next slide and you're also going to take a look at it what if there was a fluctuation in the Canadian dollar uh some of the solutions there are raising your prices to offset the impact of a lower Canadian dollar renegotiating with supplier contracts or finding domestic suppliers to mitigate your your FX uh uh exposure there the next thing you want want to take a look at in your scenario analysis is what if you need to take on more debt and you'll look for lower interest uh rate debt especially for the longer term needs renegotiating with your lenders if possible maybe finding alternative lenders and but key thing is to meet with your advisor to discuss your options go

ahead the fourth thing you're going to do is research your new revenue streams and so while it may be impossible ble to replace the us as a customer we're looking for ways to diversify your sales either geographically or product wise RBC and other Banks industry and trade office uh agencies offer great tools to help you with this so the key thing is to reach out to your partners and discuss these with them and while you're doing a research for alternative markets also look at your local customer base because you know you may be able to find ways to deepen your local customer base in Canada and I know a lot of businesses are doing that okay on to number five so the fifth thing we going to want to do is streamline your business operations uh as you deal with you know higher input prices and demand changes and profit margins being impacted look for ways to reduce your operating costs but it's important to remember as well that the US is for for 34 different US states um we are the biggest customer so you're coming from a position of power so remember that when you're negotiating you have a great value proposition and our American friends need us to sell uh to buy their goods and sell to them as well so just take a positive approach and and remember that you have some negotiating power and if you haven't refreshed your 2025 business plan this is a great time to get started on it um if we flip to the next

slide um Cecilia and I had talked about and Paul actually mentioned it negotiating with your bank or and talking with them a lot lot of our clients just say to us I don't speak Banker you know what do you need or how do I approach you and it's super important to organize your financial information just get get on top of of what you have available from your Mis systems and your reporting and and sort of sip through that you need to summarize where you've been where you're going and uh and where you are currently and how the trade tariffs may impact you you need to project confidence to De demonstrate your character capability and collateral in that order so the most important thing is character when your Banker is talking to you they're looking to see that you're going to be with them right to the end to make sure that you're delivering on your business goals they need to know that you're a strong partner from a personal perspective after that comes the ability to repay loans and the type of collateral in the background they're looking to bank you not necessarily your you know your collateral the key actions for you right here are right siiz your credit facilities work with your Banker on that maximize your collateral sources Maybe there's U outside guarantees or some real estate in the background or investment portfolios the bank can use that to to uh expand your credit facilities but they also rely on on EDC guarantees for support as well particularly for uh direct and indirect exporters your foreign exchange strategy should be looked at very carefully and most of you are probably trading on spot but you'll also be looking if you have enough volume to potentially put in place a hedging facility to manage risk and the other thing you want to do is talk to your uh foreign trade um uh Finance specialist at your bank or other uh institution you want to make sure you have uh access to and knowledge of the kind of products that will help you manage your cash flow all right let's move along here from here I'm going to turn it over to uh to Nazar so we've talked about some of the resources available to you Nazar can speak to sort of generally what's available at RBC and other banks will be fairly similar in their roach as well and then nzar will walk through a couple of scenarios on importing and exporting that help um guide you through how to manage your payments internally and internally or importing and exporting for maximum efficiency over to you new thank you thank you Peter so um RBC trade finance and what's available um so there's a full spectrum of trade instruments available to both reduce risk and also improve working capital availability and uh I'm going to identify some ways that you may mitigate these risks uh through the use of different trade instruments so um there's many different options exist and uh we encourage you to consult with your banking with your trade Finance specialist to determine which option is most desirable for your business uh based on the risks involved and also on your risk tolerance so many different um when it comes to to trade Finance there's import Services export Services there's also um Bank guarantees um Peter talked about RBC global trade online services and also there's different types of trade financing advising and discounting products that are also available and so and all of these can help improve your working capital availability uh next slide

please so in this slide you managing payments risk and working capital so there's on the left hand side you can see there's different types of trade instruments that can be utilized on the right hand side we see that there's a risk um trade-off between the buyer um and and the seller the exporter when it comes to using these types of instruments so just to quickly run over these um so cash in advance would be the most desirable form of payment from sellers perspective um the sah gets paid cash before goods or services are provided uh but now as you can see it's much riskier for the buyer who now takes on all the risks that the goods may not be received uh when it comes to guarantees and standby letter of credit um these instruments they demonstrate your performance capability or ability to meet a contractual obligation so examples of situations that require these instruments they include uh bids and tenders contract performances Advanced payments and these instruments are issued U by a bank to provide security to a third party for the performance or an obligation um letters of credit uh that refers to export letter of credits and import letter of credits so when it comes to export letter of credits so as an um as an exporter so you will be receiving uh by by the exporter the beneficial so what it does it guaranteed by the importer's bank that payment will be made to the exporter once all the necessary documentation requirements have been met um when it comes to import letter credits it's issued by a bank on behalf of an importer so in this case it guarantees an exporter payment for the goods or services provided the documents called for under the letter of credit are presented and are compliant with the terms and conditions of the letter of credit and both of these instruments can be used both to ma manage risk manage the payment and the performance risk but also improve the cash flow um availability uh depending on what kind of collateral is utilized so instead of using Cash There's sometimes options where you can actually use these letters of credit as long as it's agreed by both parties on each side of the transaction and it can improve the the cash flow of um of each each party in in these kind of cases um there's also documentary collections um those instruments involves the handling of trade documents by a bank but uh do not necessarily involve payment undertaking by the bank um as it is with the other letters of credit so in these cases Banks act as intermediaries to collect payment from the buyer in exchange for the transfer of documents then enable the holder to take possession of the goods and lastly is the open account transaction so the payment for the sale or purchase of good is supported by invoice only so documentary collections or uh letters of credits would not be used in this case so the payment can be made at any time during the transaction life cycle as agreed by the buyer and the seller uh sometimes a seller extends credit to the buyer by invoicing buyer after the goods are received um but in this case represents more risk to the seller um because now they're invoicing but they're actually waiting to get the payment so it's generally used when a pre-established relationships exists between the buyer and the several and there's a level of confidence around delivery and payment of of goods so um based on these different instruments um based on your individual scenario based on the product or service that you're using um there can be different strategies designed to help you facilitate these International payments and transactions but also help improve your working capital and your cash flow of ultimately the cash flow of the business uh next slide

please so I'm just going to run quickly through uh couple of examples so in this example we have an importing example so um paying uh an overseas supplier so um let's say your an ABC packaging Imports plastic um residance as a product import from China order to deliver 60 days options based on the need to make a payment of 100,000 right so um cash advance that doesn't really help support the cash flow and there's considerable risk performance risk that you may not be getting the right product or within the timeline so we generally want to avoid the the cach in advance um most of the time um there's also option to use the documentary collections uh which somewhat mitigates the risk um because payment made when the goods show uh have been shipped there's an exchange of documents the banks help facilitate this transaction however does not really uh improve the cash flow ability ility of the company and also doesn't quite mitigate the um the risks as it would when using other trade instrument now the import letter of credit in this case would be the optimal choice because payment released by the bank only when documents show Goods shipped on time and compliant shipping docs presented so if you are importing product you can use a letter of credit instead of paying cash you can offer your supplier in rep letter of credit uh and there's a possibility you may be able to negotiate also um because now they have um the supplier is holding a letter of credit from a a trusted financial institution that gives them the peace of mind that as long as they're able to fulfill the the contract terms and provide all the required documents such as a bill of liting certificate Insurance uh packing slip and all these documents through their bank they know they're going to get paid because there's money actually sitting on the um on the client's on the buyer account to pay for this for the goods um but then there's also an option to negotiate so um maybe you're able to negotiate 30 60 90day payment terms if you have that strong negotiating power and um you're able to negotiate that by either maybe ordering more in bulk um or um or uh just uh maybe setting up ongoing shipments um um as well so there's different ways that you can negotiate but the key here is is that you are keeping the cash in your pocket and you're not paying the cash up front you're using the letter of credit that is backed by some kind of a security um and it's it's utilized through the bank so this helps improve your cash flow there's also ways to help discount um there's a discounting feature available on these letters of credit that you also might be able to utilize so the way this would work is is that your as as soon as the product is shipped uh you would be sort of making the payment through this letter of credit however the bank would actually front that payment for you and you would then repay the bank in 30 60 or 990 days so that's called uh discounting right so your supplier would get the payment up front but you would keep the cash in your pocket and the bank would actually front that money for you so these types of prodct is also available and you need to discuss this with your Banking and trade Finance specialist to see if your business would qualify for for a solution like this um next slide

please so this example is um just the the other way around it's talking about the exporting so selling to overseas buyer again as a seller you want to get the cash in advance but now the significant risk is is being transferred to the to the buyer who who might not be willing to pay you the cash up front they may um ask you for a down payment and and maybe um they may be giving you an advanced payment um and asking you in return to provide them some kind of a guarantee or something like that so there's also different ways of structuring um for you as an exporter um but at the same time uh you can request a letter of credit from your um from your customer from overseas so the customer would provide you the letter of credit basically saying that um once you sort of provide all the documentation and everything to them the then they would release the payment to you and again there's some discounting options on these letters of credit so that in that also helps uh support the um the cash flow and um these products can also be arranged in different ways so if you're in or you're an exporter um you can talk to your financial institution advisers and see if there's options for you to utilize sort of trade instruments and uh help improve mitigate first of all mitigate risks but also help improve your cash flow situation right so if you're going to be going coming up against some kind of a cash flow crunch over the next coming months uh next slide

please so just some uh practical ways to defend against tariff turmoil so some thing points that Peter discussed and I went over so some action items just to quickly go over for the purpose of times is use the trade Finance solutions that I just talked about seek how specialist trade financing uh when available uh negotiate better payment terms um when if you're importing utilize import LC's um and uh also LC discounting of there something available and um take advantage of the cbsa car bond to obtain release prior to payment privileges so your goods can be released faster at the border next slide

please exporting you can ask customers for larger Milestone payments um induce Advanced payments with APG uh which is Advanced payment guarantee also take advantage of export LC discounting when available uh secure shipments with insurance and uh take advantage of also EDC products um there's a full slew of EDC products available that can also help um improve the cash flow of the company these these products are can also be ready available so again um most banks they you they work with EDC and if you're speaking with your Banker if some options exist and available they will likely bring in an EDC partner you can have a joint meeting with both the your relationship manager and EDC and see what kind of solution can be structured best for your specific scenario and your company and establishing a US presence also consider using standby letters of credit as collateral to secure your us operation banking facilities and the EDC GP which can even help with financing of foreign operations so EDC has a specific program called export guarantee program that can provide secure additional security to the bank to finance your us uh operations so this way you have to as heavily rely on your own funds and this can also help improve your cash flow when needed uh next slide please and this is just a a slide that overlooks about different EDC products and solutions available um next slide

please okay this is it so we've come to the end of the presentation from our end uh Peter and I will be happy to take on any uh questions that you may have thank you for your attention thank you so much Nazar and Peter and yeah we do have some questions for you so I am going to uh get those going first one uh we have is what industries uh will see or you know from your understanding will see more impact of tariffs than others are there any particular industries that are going to see this is there any possibility of a positive impact for Canadian economy and businesses due to this

so uh so I'll take that I sort of covered that a little bit um the the key impact is on the Auto industry and uh as I said there there is a a huge movement of inputs going back and forth across the border uh to make Auto Parts um you know to refine them into the uh the auto parts that go into the final product and so it's a big one for the US uh they've targeted that industry they want to uh you know bring home auto manufacturing to the US and and that's the stated goal of the Auto industry teros uh so that one's key and and as I said there there is a knock-on effect to the local business so while you you may not be a large business or an auto part supplier uh supplying to that industry you can be really impacted by um the the KnockOn effect the the example there is the the local restaurant but it may just be the local machine shop that sells into that Supply chain so that uh that's a key one um you know the aluminum industry is is is really aluminum and steel are really impacted uh the US is effectively going over after everything now uh pretty much in terms of tariffs blanket tariffs of 25% um look like they're going to happen on a forward basis um the other Industries are metals like I said Metals for steel and aluminum and then also the agricultural Industries as well uh they're the US is tar targeted Industries like the dairy industry in Canada anything with sort of uh trade support in in its respective uh country is being targeted um by the us as unfair uh so there may be some structural adjustments they have to make in that those Industries um but again I think for most of us a lot of us on the on the on the uh webinar the impact is almost more on the knock on effect of how is this going to Cascade down generally into the Canadian economy and and impact smaller businesses that Supply or adjacent to these industries that are really heavily head so in terms of uh I I think the follow-up question maybe Nazar um if you have any more input I just like to add in terms of the how Canada reacts to that uh you will begin to see more supports coming down from from the government in terms of Grants and programs to to allow our uh importers and exporters to adjust to this new environment so count on those uh when this happened in 2018 I was primarily targeting the steel industry and aluminum industry um but the there were a number of programs adopted by the Canadian government and and the provincial governments to assist our businesses to adjust to these new terms and uh make it a little easier so very very important is to find Grant sources government resources um uh you know particularly National and uh and provincial to see where you can you can get some support um I'll put a shout out to the uh RBC uh offers a partnership with Grant match which is a uh a slew of professionals who um uh work with you in your particular industry to find grants that are applicable to you and they're experts in finding money for you and helping you get to that money sooner so uh all kinds of resources like

that Zar did you have anything to add to that no think Peter that's great um I'll would just say that Board of Trade has some great resources as well there's some great Consultants I'm just thinking look Mexico is going to behave with this as well right why not partner and find some possible Partners there right um I know the Board of Trade there's a great guy that does Consulting for the business um in um Mexico he often presents at the Board of Trade presentations as well Dave Archer um so there might be opportunities out there right um to to seek out um other other resources of of business so we just have to keep our eyes open you never know what this may lead to right um how this may there may be some positive effects after this all together because it it does put us out of our comfort zone but at the same time any of these sort of turmoils a lot of times they lead to something good because there's some good things that may come out of it and might actually be beneficial in a lot of ways sort of like Peter mentioned one of the slides we got to be bold and brave um just to weather the storm and um and just go from there absolutely and I really like that one I think um something that's been commented on quite a bit just throughout everything is definitely uh I think an impact is like looking at diversification for everyone right is that um I think and it's it's always been a subject for people to to not just looking at our us as our main obviously trade partner but more than ever is to really talk about those possibilities and what that looks like um and that can be obviously a bit of a scary undertaking if you like but there's so many reasons to tr to utilize and that's what we're here for right is to be able to offer the advice surrounding that diversification for companies um I think we have there's one in chat but I do believe we provided some resarch for this but I'm just going to I'll I'll ask the question you guys can answer again so where where can I find resources to calculate the impact of tariffs my specific challenge is uh Parts being sourced from different areas like China and Mexico um and do you so do you guys have any resour I know that we have some uh like tariff calculators that you can find online which I am happy to put in our follow-up email but anything off the bat that you guys um and even Paul if you have any tools uh for calculating these

costs sure I mean uh From rbc's perspective uh we had a slide for it uh the RBC Global Connect service is sort of just a general um aggregation of tools for for those looking to grow their businesses internationally EDC has a ton of tools as well as the you know sort of supporters of exporting uh across the country um but from rbc's perspective we generally uh start our customers off uh it's a free service available uh to uh anyone across the country uh to go to RBC Global Connect trade resources and those trade resources is is the catch uh phrase for tariff calculators uh landed cost calculators industry information uh looking at um uh all all manner of import or export related uh uh trade data and you may not have caught it because I moved through it fairly quickly but right from the page it is simple as saying what's your product are you importing or exporting and which country are you interested in and that will immediately narrow down your scope to to see what kind of uh tariffs um and duties apply in various countries it'll also have a calculator that allow you to add in your shipping costs and you know you have to do a little bit of research on what it may cost to ship and ensure things and you add that to your tariffs and duties and your Freight forwarding costs and all kinds of things and that'll give you a really good idea of what your actual cost to do business in those count countries are or to bring in product from other countries outside the US so highly recommend it it uses a a system called the harmonized system code if you're not familiar with it Google it but it effectively is a very comprehensive classifies every product in the world into a harmonized system so if you put in some keywords you'll generally get narrowed down to something very specific for you you can put in your HS code and you should know your HS codes if you're if you're not familiar with them for your business and your product and your inputs and if you use those uh HS codes um you'll get much more targeted information so highly recommend that kind of resource EDC has very similar and there's all manner of uh trackers and and calculators out there as well fantastic yeah and on that point too um the global Affairs Canada in uh collaboration with other uh Partners does the Tariff

and I'll put that in our followup as well so uh yeah fantastic and I think I'll do we have one more question here to kind of end us off there and then we'll bring it all together but um how do tariffs impact the Canadian dollar and what advice have you been giving to clients in this

regard uh does anybody want to take

that uh the the the general impact on uh this whole situation on our dollar has been uh has been punitive um you know uh we rely a lot on our foreign exchange experts at the bank but and you can search them out on any bank website Credit Union website whatever uh EDC website um you know uh industry websites industry Canada and the like you'll get some great information there but yeah it's it's punitive um uh to to our dollar but as you can see for the last uh several weeks dollar has taken some hits and also recovered a little bit and it seems to be news dependent but also you know sort of fluctuates so as you may know if you've ever tried to predict the the value of the Canadian dollar for a week or a month ahead it's pretty challenging uh so rely on your experts uh fad out those sources and it's an easy start at a bank website or an EDC or a border trade website to get uh connected to those resources absolutely much appreciated all right we're going to uh move into essentially just a discussion portion but before we uh bring everybody to you know talk and maybe give some end notes um I just want to go over some of our upcoming things as I mentioned earlier in the webinar um for one uh we have our survey which is on uh you know input of the impact of potential us tariffs um so these tariffs that are coming uh we really want to understand what your challenges as uh are and so that we can provide more uh you know these these kinds of webinars more supports what supports would be necessary to our companies so please do take the survey so that we can uh have that feedback and that understanding um and we can uh we'll link that in the chat as well and it'll also be in our follow-up email and as I mentioned we do have uh on March 6 which is next week is uh tariff proofing your pricing and profitability and like I mentioned to especially the points that have been made today from all the speakers um it's going to really go and delve into especially the kind of the negotiating of contracts specifically in talking to your customers and I think for a lot of people uh that can be a heavy challenge is to actually have those conversations and look at what you know you need to Pivot to uh so definitely um come with those questions ready we want to be able to answer them for you um and we will uh that's already in the chat so you can definitely uh use that link as well and next um the World Trade Center we are also offering an executive certificate on financing strategies for smmes um and so that is going to be held on March 18th if you are interested please do apply um you're also welcome to like a uh you know email us at WTC atb.com for any inquiries um or reach out to myself or um any other program managers here um we're more than happy to go over the programs with you uh but this is the next one coming up that may be of interest to you and uh mastering AI strategies for scalable success especially with the the you know growing Market in AI this is so crucial to people's businesses so how do you uh do this and strategize properly to make this a you know viable impact on your business um it's what we're going to be talking about in here so that is on March 28th coming up um and again uh reach out to us if you have any questions about these um and then this I'll I'll kind of leave on here this is you know again uh if you want to reach out to ourselves or communitech who worked with different Founders um and they have events coming as well please reach out to us uh for any inquiries we're happy to meet one-on-one and discuss uh strategies for your business in particular uh and so I will bring it back to just this page here and coming all together so um if there are any uh lingering questions if anybody has some lingering questions uh that they'd like to pop in uh the Q&A please do um uh otherwise I kind of want to open up the floor um and uh kind even just starting off we've talked about uh best tips and uh you know strategies um I I'm always interested in if there's any case studies in particular any um things that you can share from uh you know even when we think about like Vinnie's story um any businesses that you've had to more recently talk to about these things um that you'd be able to kind of delve into so like what those conversations might look like uh with your

clients and for whoever wants to you know Paul or Nazar Peter anybody who wants to jump in or offering just advice that you would best share for

everybody Paul do you want to take take that one yeah yeah sure uh well so you know there's been some some conversation earlier in terms of like kind of best practices there was a couple questions just around you know casual forecasting scenario planning uh you know really thinking through some of this I I think you know it's come up in in Peter nazar's presentation as well and even in in Vinnie's uh upfront conversation it it's it's around you know still being ambitious and aggressive and understanding that there's opportunities in these times so you know one of the questions were you know what what will be the opportunity you know are there any opportunities um I think maybe not broadly for the economy but with specific businesses there's definitely be opportunities right and if you think about tariffs um so I gave that example of someone just looking to manufacturers somewhere else or bring their cost down and still drive additional Revenue because uh he's finding Unity within this time uh of uncertainty um another example I have is um someone looking at uh you know pivoting a little bit so the retaliatory tariffs are um going to be punitive for us Goods coming into the Canadian market and a lot of that is is food and beverage focused so there there's a lot of now Canadian uh food manufacturers saying great well we have an equivalent product but it never got the pickup because it didn't have the big American brand name so now there's going to be um you know additional pricing opportunity but uh additional branding opportunity so they're looking at kind of uh scaling up some marketing spend and saying how do we get uh our brand now in front of more people more Canadians so that they'll start to look at um additional options right so uh you know when when tariffs come in uh on on us um products that's the opportunity for Canadian businesses to now say okay great how do we start selling more locally so so look at opport OPP unities like that understand where there's opportunities within your business I I think are going to be key so um you know don't try to you don't go hide and bury your head for four years and hope it all goes away this is time for really to take advantage of the situation and say okay where where where do my products play who are my customers what are the niches that I know really well uh and start to double down there yeah and I love that to that point too um one obviously we've talked about um the trade commissioner service but I think that that's a huge service that Canadians can utilize um it is a free resource which is great we also have for any businesses that are you know food and bever specifically we've talked about that being hit or having a harder times with this there's uh you know the Ministry of Agriculture and food and agre business um so definitely utilize those resources because they are you know boots on the ground um they're in I think it's over the amount of countries they're across the globe so especially with diversification TCS uh Trade Commission service um is is your first line to really go into those areas and talk to them about that um and those Services you know they can find people abroad for you to work with um or even just double-checking that these you know your contracts negotiations things like that so I think it's um it's imperative to know your resources and uh also uh working with ourselves like obviously everybody on the call here um reaching out and even having that that one-on-one conversation is a way to better understand what what other the resources are available and for us to help with that as well and act as a hub right so if we don't have the answer we may have partners and people that we work with who have the answer um yeah Vinnie just a quick comment Cecilia I'm having the chance to talk to some leaders uh uh during the week and my my comment here I noticed that there are some leaders that they are concerned with the uncertainty and others that are already taking action so my recommendation the wind is changing so it's time to see this new scenario the same way as we develop an export strategy when we are planning to go and reach an international market the wind is changing so it's time to understand the new variables and adapt to this new scenario and understand how this will impact your the Alternatives the opportunities and take action so that's my my tip here that's great no absolutely I think uh unless any other comments from anybody uh cuz I love that we can definitely end on that as well we are at 131 um but any additional comments uh you know as we kind of end out

here okay great amazing well first off huge thank you again to all of our presenters here uh you know Paul Nazar and uh Peter thank you so much for uh being a part of this and offering your advice um your contact information is going to be available to every so if you have any questions from people um please do you'll have this in the follow of email as I mentioned um everything will be provided and again huge thank you to ven Morandi my colleague for uh presenting uh great insights thank you so much for that uh and that is everything for today's webinar and session uh we hope to see you at our next one March 6 as I mentioned uh and again feedback uh for other topics that are definitely on everybody's mind that's what we want to know about what can we help what what insights can we share uh so that's it we're going to end out here um bye to everybody who is still with us [Music]

[Music] hi everybody I hope you are all looking very forward to this webinar um that is on the global growth series uh tariff proofing your pricing and profitability uh with all of the new tariff uh changes and the policies happening in the states um there's a lot going on uh and so you know we want to be able to answer those questions and uh provide you with resources that are going to be helpful uh amidst all of the changes ongoing so housekeeping in order for this webinar uh you are going to see two different functions uh and as I just uh showed you there is the chat function which we use for General discussion and then there is a Q&A section so that is where we will be uh going through the questions after each speaker um just so you know that is where we're going to be looking for questions right so make sure that you're putting in the Q&A we won't be looking at the chat for questions um and if you have any additional so after the webinar if anything comes up for you um we want to know uh we're going to answer those questions so please do feel free to reach out to us and inquire uh at WTC atb.com and just for everybody we are going to be sending along the recording and slides in a follow-up email after this uh and we are you know make sure for anybody who you know does receive please again you can reach out to us any issues you have WTC atb.com uh and I'm going to get right into our session today so what is global growth series for anybody who hasn't been on this webinar or who anybody who has been on this webinar series before this is not going to be new to you but for anybody who is new here uh this is all about partnering with a purpose for us uh we work with uh one of our uh main Partners principal Partners communitech uh as well as other ecosystem Partners at play to really commit to advancing our uh small to medium business partner uh companies that we work with uh and helping them to achieve Global success right so we do that through combined expertise which is leveraging our different partners uh the collective ecosystems for comprehensive Market industry support we do that through empowering our Canadian uh businesses and so that can be done through you know we have programming uh communitech itself Works uh with Partners uh with Founders specifically and we want to enhance your Global reach right so how do we do that how can we assist uh there are many different ways and we a big part of that is working with different partners to achieve that purpose right so if we are not the ones who can help we want to send you to somebody who can uh and working within that ecosystem right so that's a big thing for us and that's why we started the global growth series along with having a nuanced conversation about everything that's going on right so we're trying to stay uh in the no so that we can offer you the best uh assistance and advice possible who are we to offer that well we're the World Trade Center Toronto we are the scaleup arm of the Toronto region Board of Trade which is the Chamber of Commerce in Toronto and we are look to educate Champion for our community uh we do this nationally with one of our programs called the trade accelerator program uh and to give you an insight into two of our main programs that we offer uh we have our executive certificates and we have our trade accelerator program here so there's this kind of gives you an overview what the objectives are the criteria and the duration but essentially uh at a very key level we are looking to and our mandates are supporting uh exporting right so we want to help you to uh maximize your exporting success uh and a lot this especially amidst what we're talking about with us having been our largest trading partner obviously this is a huge topic on mind you know and so uh you know build out your export plan that's something that we do in our trade accelerator program as well as enhancing expertise on your different trade and uh business topics and our partners communitech as I mentioned they are all about Founders that is what they do they work with hand inand with Founders to build their capacity and so if you want to learn more about communitech there is tons of information on their website as well and I'll be leaving links so that you can reach out and uh book a one-on-one with them this is uh before we get into our first uh speaker who is going to be actually my colleague John Joel from the World Trade Center uh we are uh looking for your feedback as I mentioned uh in terms of supporting our companies we want to know what is impacting you just as I asked that question in the chat we are asking that you take this survey to provide us with feedback what is impacting your business so that we can in the future talk topics that we do with our webinars uh we can outline those things and we can actually provide those so uh we would love for you to take our survey uh Carlos who is my moderator for today is going to be popping that survey Link in the chat as well uh but there is the QR code here and again as we said we're going to be sending these slides so you have these available to you um but please do provide your feedback uh again we want to be able to understand what's happening uh and so we can better support our businesses and now moving right along we are going to jump into uh John Joel's presentation to get us started to give us the lay of the land of what's going on here because there are a lot of changes going on constantly dayto day uh so John uh take us away so thank you Cecilia I'm John juel I'm a senior program manager here with the World Trade Center team um and where I want to start today is just letting you know I've got the unenviable task of trying to give you guys a layia the land on what's going on as headlines are coming out in this webinar uh so where we're starting from may not be by the time this webinar ends but you know we're going to make the best of it um but where I really want to start today you know is is a comment for you guys so this week we read in executive orders South of the Border that Canada our Canada constitutes an unusual and extraordinary threat and I believe you're darn right we do we have capable ambitious and motivated leaders all of you wonderful folks joining us that are prepared to perform at their best hence why you're here to learn about how you can improve your business a tariff on 25% uh imposed on all Canadian made Goods or nearly all Canadian made Goods is not just a headline it's a call to action and it demands that that you stand taller you innovate smarter and you forge stronger bonds than ever before this requires you to recognize your strengths your resilience and even your ability to pose this extraordinary threats not as adversaries but as an ambitious community in business whose talent and genuity and determination must not be dismissed or underestimated so now more than ever I believe it is imperative that you as Business Leaders focus on competing and winning business at the highest level it is critical that each of you invests energy into the heart of your business your people and their skills it's time to double down on training Innovation and upskilling because your teams are critical to their your continued growth and success equally important is ensuring your teams are equipped with the best tools and Technologies to perform their jobs effectively invest in the resources that enhance productivity streamline operations and Empower your teams to achieve excellence and relationships always the backbone of Canadian business business have just taken on an even deeper significance your ties with Financial and Professional Service Providers your industry communities your networks domestically and abroad are now your lifelines so lean into these connections collaborate share your insights share your resources and encouragement with your fellow entrepreneurs together you we'll build some resilience so let's not shy away from the challenge instead let's exploit this opportunity to reinforce our networks uh reach out to your fellow your fellow entrepreneurs your community and nurture your relationships abroad performance in the time of adversity defines leadership and now is the time for Canadian Business Leaders like you to demonstrate the kind of extraordinary leadership that these things demand so I want you to take the words on the screen here and put them where you can see them this is a bit of a call for you guys this is some bulletin board material uh this is to remind you every day about what it's going to take to compete and win in this new environment regardless of what the outcome of the current tariff situation is there's an Administration that sees us as a threats because we continue to perform sees as motivation and not deterrence to make your business is better every day so with that I'm going to take a look at the lay of the land Cecilia next slide uh so we're going to do like a short walkr of what we know and again this could be changing in real time as I speak here uh I have no policy recommendations we're not going to comment on should or should Nots of the space where layout what we know and what we see coming as part of this um and first off you know we have imposed tariffs on some us-made Goods we've known about this list for about a month now it's been quite public we'll just quickly rehash today and details are available uh through the government of Canada websites as well so it appears uh the big change that we're not going to lift import tariffs on us Goods this is not certain but this feel this feels like what's coming uh regardless of sectoral exemptions so you know if the USA lifts tariffs on Automotive you know what what are we going to do probably nothing until we get back to something that resembles uh a little more normaly now again highly kinetic environment things are going to change and I'm probably wrong when I say that out loud right there but this is currently what the conversation seems to be so in terms of what's affected Cecilia next slide um the first thing I want to say is H yeah Roger great point spef I did take that a bit out of context but I feel like it's still indicative of a lot of the behavior um but in terms of you know what's the tariffs that been published uh the government of Canada has now published a a mechanism through which remission uh could be used to if you have if you're importing from the USA a critical good as part of your supply chain there's a process this is not a comprehensive look at at what that process is it's very new uh and likely it'll be used extremely sparingly um but yeah so there's there's a email to go to there's about 15 different things they need to see as a result of this to even consider your application um and it's really only granted under exceptional circumstances with significant economic impact but be aware that it's there I encourage you to take a look to see if it applies to you at different points in times to make sure that you're doing what you need to do uh next uh just a quick lay land on what's been affected in terms of American Goods coming into Canada a lot of food products next uh consumer goods U things where we have a lot of alternatives for uh next so building industrial materials yeah as they go after kind of our business industry we're going to kind of take on some of theirs next h a lot of miscellaneous items things that we do have alternative sources for so uh this is kind of the warning shot level of tariffs I believe it was $30 billion Canadian approximately worth of imports uh that are exposed and they're trying not and not perfectly but trying to avoid things that are um you know directly critical to a lot of businesses I'm sure some folks are kind of hitting the crossfire of this almost certainly um but that would that seems to be what the intent was at this level we don't know what's in the next trench uh that could come down and I think was 21 to 30 days uh yet uh but I'm sure that'll be published as as time goes by here next so again I want to rehash unfortunately we've got some experts on the call that can speak to this a little better um you know who's responsible for paying this thing the Importer of record is usually responsible for the Customs compliance work uh USA does have a non-resident importer program for Canadian uh Canadian businesses so this could be us uh so the Importer typically pays the Tariff not always uh and in some inco terms the seller may pay the Tariff on behalf of the buyer and I'm hoping Christian is cringing as I say all this with no Nuance um so next uh what we're seeing from the USA we the announcement was 25% in all Canadian made Goods except 10% on certain energy produ projects uh a key kind of relief fell for a lot of small businesses was the fact that the diminus DI Minimus exemption for shipments less than $800 us uh remains in place for now uh the reason was when they tried to tariff you know small dollar Chinese Imports uh basically the US Postal Service shut down a month ago and stopped receiving any stopped accepting any packages uh because they couldn't process them uh so they really just didn't it appears they didn't have the infrastructure to process the huge volume of small dollar packages that crossed that border every day uh it the intent seems that they want to claw this back and it feels like they're approaching new um systems and operations to try to try and address this but for now there's a bit of relief there uh as of yesterday at 250 um when the deck was locked in the automotive industry exemption was announced uh no one really knows what was included in that yet is it just the cars is it part of supply chain is it certain categories of products um so far we're still waiting to see and minutes before coming in here we saw an announcement of some sort of relief granted to Mexico and rumors of more relief being granted to Canada uh so what's affected in terms of import tariffs the long the short answer is everything and the long answer is I don't know uh and we don't really know yet until this firms up uh go forward uh just some things to be in mind with us import di Minimus uh so this exemption exists it's you know I highly recommend if you can use this for your business please be doing so uh currently they don't have the infrastructure to process uh but as they start to implement new systems to start you know tariffing di Minimus exemptions is not just the Tariff that could present a barrier uh we could see some other risks in place and the example will point to is what we saw um in February uh with respect to Chinese shipments was that there may not be enough people to process and tariff all these small shipments uh the infrastructure that they the new infrastructure they're building may break under some scaling pressure uh we may see more workload to show compliance on these small on these small packages so it may cost you more to just process the paperwork um we see that it's not really designed to process this high volume of small value shipments um and then my favorite question is what the heck are we going to do about refunds is if in case a customer wants to return something is there any mechanism through which to do this will the system be able to handle it so there may be some operational risk here Beyond just the cost of a tariff as things change as they try if the USA proceedes and tries to claw back this $800 exemption in the future next uh and just you know a a refresher if you're buying things like critical inputs from the states or inputs from the USA that you need to get through is we have a DI Minimus ourselves on tariffs that we impose so anything less than $20 Canadian you know that which is a mighty value I know um there's no tax no sorry no tax requirements and no tariff requirements on that $40 uh we can get some exemptions on the tariffs but not the sales taxes and $150 is the threshold for duties up to $150 Canadian uh so a lot tighter than what the USA um level is so this excludes non- kusma countries this excludes like certain excise Goods um Alcohol Tobacco other things and Commercial shipments may have some challenges depending on what's going on in the space as well so just be aware that it's there it may be useful to you uh but it's a lot more narrow than the equivalent American exemption

next uh just a few other resources for businesses we rehashed these about a month ago but I just want to make sure you're aware of them again uh if you're unclear on what's being affected and where from your products um the can Canada terara finder is a useful collaboration from a few different organizations that's quite useful to use BDC has a resource Hub and we've launched resource Hub now as well through WTC as well and I'm sure that'll go in the email following next uh this uh Emil great to hear from you uh these resources will be shared with you following this as well thank you uh so alternative uh alternative markets uh we also encourage folks uh to be looking and and diversifying afterwards you know take a look at our continued Global growth Series where we don't just talk about tactics we also talk about regions uh there various trade opportunities being provided through F areas like EDC and if you really want to get granular uh in terms of data take a look at trade maps to see where else your goods may be in demand or your product may be in demand to find some alternative markets as well next so uh can export this we got some news on this it's supposed to be it was supposed to be opening in February it's now opening in March uh there's been a few changes they've not all been announced yet uh there'll be a greater focus on export diversification in your application uh I don't think that shocks anyone uh there may be some changes to some eligible expenses announced from the TCS uh and there's some new documents requirements uh specifically they've named so far if you're in most of Canada at the GST 34 return and if you're in Quebec an FP 500b uh return in terms of as part of your application process so documents to speak to your accountant about or or your bookkeeper to make sure you have prepared and ready to go next uh in terms of continuing to build your leadership capacity you know while a lot of you folks are here today upcoming you know we've got a couple exe one-day executive certificates on high impact topics uh particularly for folks trying to scale internationally the first is on March 18th which is a one-day executive certificate on Capital funding grants and Taxation strategies uh this is for women-led businesses uh there's some other participation criteria as well and it's presented in collaboration with the with Scotia Bank women initiative on March 20th uh we also have um a certificate on skills based hiring and it's for small businesses focused on maximizing the impact new hires uh if you're curious Carlos is posting some more information about these in the chats please take a look or reach out to us next uh World Trade Center Toronto so recently we are have started offering some additional Services uh really geared towards smmes um one to help you with export Readiness and go to market assessments uh part two is helping you with your market research if that's a service of offering for you one uh is export plan developments we do this two ways one through our trade accelerator program and also on a Consulting basis and then finally we offer some CR can export Grant advisory as well so if you're curious about applying for this program again please reach out to us WTC atbot domcom next uh so that wraps it up for me thank you all very much and Cecilia I'll turn it back to you excellent much appreciated John thank you so much uh and we are going to hop right into our speakers after this again for everybody who's popped in um just like our housekeeping right here you can use the chat for General discussion for Q&A definitely pop your questions into the Q&A you H will have many different chances to ask questions and the recording and slides for everything are going to be in our follow-up email and now I have the pleasure of introducing our speakers for today uh first up we are going to have uh chrisen cier uh which is uh to give a little bit of context for Christian you know he has had a 30-year career International Logistics and started montreal-based import export consultancy in 2010 which is Sol impex uh and it's active in two areas which is Consulting to helpes grow internationally and training on logistic custom and Regulatory aspects of international trade and we also have Dan snow who is with uh snow Collective Dan started working at 19 years old in advertising and never looked back with the roots and market research and data analysis uh he took his learnings and moved into creating online and offline strategies for for Brands like Nissan Visa Molson and Avia so these are our speakers for today uh we welcome you guys and your information uh on these topics in particular so starting us off Christian uh I'm going to uh ask you to share your screen uh so I will stop sharing mine and you can share yours and we'll go from there all right excellent thank you very much Cecilia thank you to uh the um great team of the Toronto region Board of Trade for the invit ation to present to the uh to everyone today and thank you John for your detailed very thorough and very interesting presentation on uh on that topic so um um we're going to talk about tariffs and so which is you know someone's favorite word as we know as we've known for a few weeks now um I'm going to try where I'm going to try to do actually is explain or demystify some of the things that we hear about that and focusing on uh how they work and and and what are some of the details that sometimes are or overlooked or sometimes uh we're not certain exactly how they work and and etc etc so I'm going to focus on that a little bit I don't need to introduce myself because Cecilia kindly introduced me already I will say briefly that uh even though you might say it's not today's topic but I think all these topics are interrelated I do want to confirm that yes I stand with UK as we see what has been happening in the United States with the US current US Government basically siding with the Russian aggressor uh and so that is um not directly related to our topic but overall it is all related you know and uh we're not going to be doing much business uh if we don't live in a free world where rules and laws are are followed uh and so that was just my my my brief um um statement on that that yes I stand with Ukraine and I hope that all of Canada does as well and so also on a very related topic I just want to remind everyone that we are living in very different times since January 20 I mean we all know it in a way but I think we also should not be sleepwalking into that like many people seem to do in the US we should be conscious of going on and we should not become Blaze about it and say to ourselves oh well you know um Trump is doing this Trump is doing that so that becomes a new normal no we have to be very um uh critical we have to keep her critical thinking and we have to uh know what's going on around us and including the fact that uh the US president wants to basically conquer Canada the same way Putin wants to conquer Ukraine you know One is using military means One is using economic means but it's the same principle um and and it's not just Canada it's also Greenland it's also Panama it's also Palestine so that this is all very serious stuff and so we should not uh stay quiet about it we should not just accepted because uh because maybe it's the new normal well no this cannot be the new normal and so that was just my my um two cents worth on that that I wanted to um say very briefly so I want to explain what a tariff is and one of the reasons I want to do that also very briefly here very quickly is because you know sometimes we get wrong information so nothing against Investopedia um even though I'm not too sure who they are but nevertheless nothing against them at all but you see if you look at the definition of a tariff it says it refers to goods and services so wrong tariffs only apply to Goods to tangible products not to services so um just to clarify that and we say here in this Investopedia entry that it's to protect competitive advantages well that's very nice but actually it's to protect local Industries this is what why a country has import tariffs to protect its local industry where does the word come from well believe it or not it's an imported word um and uh it comes from um the Middle Ages from Arabic you know tar was a notification in in the Middle Ages when trading um was kind of the specialty of the Arabic world around the Mediterranean Tariff was the word used to notify someone that Goods had arrived at a port and that that person should pay whatever was should be paid and to be able to collect their goods so that's where tariff comes from the other thing that's kind of interesting to that I wanted to share with you is the fact that the current trend of applying tariffs across the board in a very careless way um goes completely against the the trends of the um last decades uh and so if you see on this chart here it shows you what the share of Revenue was derived from tariff uh from tariffs in uh you know over the last uh um decades and you see that at one point uh before World War I the um tariffs were a substantial revenue for for governments uh including the US government in this case but this has changed drastically over the years and so today tariff is a very small part of revenues for countries like the us or Canada or Europe in Canada the the revenue from um from this um from tariffs that's derived by the federal government is less than 2% the last stat I saw was 1.7% so so all this to say that this this trend that we see in the U in the US with under the new US president who wants to basically get other countries to pay for the US deficit or for us tax cuts by reaching into their pockets and impos imposing tariffs on on their goods goes totally against um what has been been happening over over the last um decades where as you see tariffs was a very is a very small revenue for most governments and so John mentioned it already so just to clarify indeed it's it's not the country that pays the Tariff you know we hear the US president saying I'm G to make China pay or I'm G to make Canada pay no it doesn't work like this it's the Importer who pays the um Customs tariff when the goods go through customs uh when they come in at the port at the airport or at the border crossing point in Buffalo for example um now quite often uh we have uh andless this applies to a lot of exports from Canada we often have situations where for strategic reasons and also because us customers sometimes don't want anything to do with Customs issues we are often left with having to arrange everything on behalf of the US customers and that's when um and John also mentioned it very briefly so in many instances the Canadian exporter becomes the Importer of record in the US we call it a nonresident importer so that's tied tied to the inco terms to trade rules to U contracts etc etc but it's not an insignificant share of uh of our trade that is done this way where the Canadian exporter is also the Importer of record in the US and is not really the Us customer who pays for the for the for the tariffs it's the Canadian exporter when he acts as a non-resident importer so that's very common and you know um a fair proportion of US exports to Canada are done this way as well with the US exporter being the the Importer of record in Canada who who collects it is is customs so in the US side it's US Customs and B protection that collects it usually via customs broker uh in Canada is a cbsa um I show you a form here just for the fun just to show you what it looks like it also makes me look smart right uh I know a lot of things U but uh what I wanted to talk about that also just to clarify it just just to make it clear for everyone is because the US president has alluded to the fact that he wants to create a new agency to collect the import tariffs directly from the source countries which is depending on how you describe it you you could say it's totally crazy uh you could say it's it's Fantasy Land you know uh but uh so so just to clarify because you know we we sometimes we we hear these things or we read these things and it it makes it makes things even more confusing so this issue of um of the US government potentially starting a new agency to collect tariffs directly from from The Source countries makes absolutely no sense whatsoever another little point I want to clarify is the issue of origin so just to make it clear again I mean many of you are very familiar with this already but maybe some of you are not and that's why I wanted to just take a brief moment to explain it um the the origin of a product is is is not necessarily where it's being sold from or where it's being shipped from if if you're sitting in Toronto and you exporting t-shirts um to the US if the T-shirt was originally made in India or in Bangladesh or in China and all you do is you add your logo then it does not make it a Canadian product so it remains it can it continues to be for customers purposes it continues to be an Indian product or a bang a bangali product or a Chinese product even though you're you are situated in Toronto or in Ontario and you you're the one exporting it to the US so exporting from um Canada to the US does not make the product Canadian from from a custom point of view and so the Tariff applies to Canadian origin products uh and so there there's there's a link also we just wanted to briefly mention the fact that yeah there's rules of origin there's intern internationally recognized methods to to to derive or to arrive at at the origin of a product based on its what we call its sub stantial transformation I'm not going to bore you with that now but I just wanted to mention it in passing clarify the issue of origin if you're importing goods from uh from Brazil and re-exporting them to the US which is a very legitimate business you know especially when you buy when you sell online you don't necessarily sell Canadian products you you sell products from all over the world that you import and then in wholesale and then you resell peace meal to customers online so that does not make it a Canadian product and so that product would not be subject to this tariff so only products that are Canadian origin qualified would are hit with this U 25% tar so briefly I wanted to talk also about the the overall legal framework around tariffs around trade rules that's organized by the World Trade Organization um and to a certain extent there's also the world Customs organization that sort of regulates part of that um the US actions are contrary to World Trade Organization rules um um China has launched a um a dispute with the World Trade Organization last month when um additional duties were in instituted Canada launch launched a complain um to the world train organization last yesterday actually so so there are international rules um that been that have been um negotiated you know over a number of years in part by the us as being the leader of the Free World and now these rules are basically thrown out the window by the US so it's very it's very um unusual type of uh situation um now the other thing I want to share with you very briefly as far as the World Trade Organization is concerned is it's it's important to know that many countries are going to file complaints against the US Canada has and it needs to be done it must be done however these complaints won't go anywhere because the world train organization is completely stuck and it's stuck it's not going anywhere it's not able to issue any rulings on things that's because the US is withholding the appointments of Judges at that organization so um when China launches a complaint or Canada launches a complaint it goes through the process and then at some Point there's a conclusion and then the other country then can launch an appeal and then what happens to the appeal nothing because the appeal judges have not been um appointed for the last um eight years um thanks to the US so very briefly just to summarize again also and to also clarify perhaps some of the terminology we hear so these tariffs are are contrary to World Trade Organization rules they're also contrary to the kma rules or the usmca rules and how is it being wrapped up by the uh by the US it's under this International emergency economic Powers Act where um the US is trying to justify the fact that they are imposing terorists because of that because of a so-called emergency um you know which is totally um makes no sense what whatever um and so we know as John has mentioned very briefly um earlier we know there's a 30-day reprieve on the for the automobile industry we don't have too many details on that but I guess it's good for them it gives them an extra 30 days uh and we know how important the automotive industry is particularly in Canada but particularly in onario because this is where the assembly lines are the assembly plans are uh very briefly for those of you who have been um listening to the news there was a press conference two weeks ago I think it was yeah two weeks ago where um one of the remarks that we heard from the US president was that um he thought this trade deal that we have the usmca or the the kusma he said who would ever sign a deal like this a sign a thing like this he was on the record for saying that basically saying that this deal um makes no sense and I guess he doesn't remember that he's the one who signed it uh when the um NAFTA was renegotiated in 201819 so this is one of a just to highlight again just to put a bit of perspective also and to highlight the insanity of all this you know and it needs to be said it needs to be we can't bury our head in in the sand and pretend that everything is normal no what is happening is totally insane I don't have to go through details of the impact for for our companies particularly for exporters we can expect that as we have to as costs go up we'll be less profitable as as our prices have to go up we we'll lose sales we may lose sales because we'll be less competitive and uh we'll have increased cash flow requirements because of of all that so that that's clear I don't need to explain all that but uh what I wanted to highlight how is how um integrated we are and how it gets tricky for for many Canadian companies because not only the US is our first export Market but it's also our first supplier about half of our inputs come from the US um we're also I'll mention in passing that we're also uh the the best customer of the us or we have been their best customer with their best export Market uh ahead of Mexico as you see here on the on the chart on the left so that means that under normal circumstances they should be uh treating us fairly right because we're their best customer uh but uh maybe some of these people have completely forgotten about that or don't uh don't even care and so how to measure the impact the 25% cost whether it's paid by the um Us customer or pay directly to customers or or paid by the a Canadian exporter when he becomes the non-resident importer the issue is how to calculate it precisely and to know and also to make sure we don't pay too much so it's going to be 25% of What's called the transactional value in terms of Customs language and so just to clarify the transactional value in customs language is the sales price so it's whatever is on your invoice basically when you sold products to a Us customer except we we're supposed to deduct the from the sales price we're supposed to deduct any shipping and insurance cost so just let's make sure we do that in order to minimize the impact country of origin consideration I mentioned it earlier uh we have to be conscious of the fact that these duties don't automatically apply to Goods shipped from Canada they apply to Goods that are Canadian so those of you who are doing who who are importing products from elsewhere and then re-exporting which is a very common activity then you wouldn't pay these um these duties and the other thing I wanted to mention the last point on this slide here is to say because we we have to find some good news in in in all of this or some positive elements is to say that the fact that we are going to be paying an import Duty in the US opens the the possibility of us getting refunds if uh if we if out of our our products that we export to the us we have any inputs from that we imported from overseas let's say you have some inputs some raw material some parts some components that you import in Canada uh on which you pay Canadian duties which you which is normal and then you use these inputs to make a product that you're exporting to the US because you're going to pay duties in the US you can claim a refund of the Canadian duties which was not possible before because um under kusma or NAFTA our Goods don't pay duties in the US so therefore we were not able to get a refund so now that we're paying duties in the US we can apply for a refund if uh on the Canadian side if if applicable so it's a a slight positive that I wanted to share with you very briefly and so now on this slide I I just have a summary of a few things and then I want to drill into a couple of them very quickly as we said earlier make sure that the price that you're going to pay the 25% on is the correct price I.E that it's the sales price of the product but less for it in Insurance make sure that they are shown separately on your invoice so that you don't pay on that if you are the one paying the 25% then also you have to break it down on your invoice so that you don't pay 25% on the

25% this reminds us that from a a contract point of view we should we should think about ways to protect ourselves should there be future ter you know uh so just like you know the pandemic um taught us that we should have good Force measure Clauses in our contracts in case if something unusual unexpected happens we want to be able to get out of our contract with no penalty right so this is where we develop Force meure Clauses so we we should have a clause in our contracts in case of escalation tariff escalation unforeseen tariff escalation should they should should they change again in the future and so the last three points I want to go into a little bit more details I have a few slides on how to have a distribution center in the US sales through a subsidiary and Market diversification and U I'll go through that very quickly but so what I wanted to run by you is the fact that if you're currently exporting to customers in the US and selling and shipping Goods directly to the US customer one thing you can do to reduce the Tariff uh bill would be to send your products ahead of of time to a distribution center in the US which doesn't have to be your distribution center it's going to be subcontracted it's not going to be your entity but you subcontract to a distribution center a 3pl in Buffalo or or elsewhere what that enables you to do is to ship your products ahead of time to that dis distribution center and then once you sell your goods and you have them shipped from that Distribution Center to the final us customers and so what that enables you to do it enables you to low the value for customers because when you're Goods if you ship a pallet or TR a truckload of products to a distribution center a product that is not sold yet you're going to declare the wholesale value you're not going to declare the retail value and so that will minimize your the impact on your uh on your the 25% um what's neat about that that way of doing business is that you don't there's no tax impact if it providing is done properly having using a distribution center on the US side fing is done properly does not create what accountants call a Nexus a tax Nexus the other option to and so that could be yeah that could be your stock in in a 3p Distribution Center in the US and uh it's uh it's not sold yet you ship it there ahead of time and then as it's sold then you you you have the your your distribution centers ship it individually to each customer the other way to minimize the impact of the 25% if you create an entity and of course I'm I'm conscious of the fact fact that this this this means costs as well obviously but still it's something to think about if you create an entity in the US then you'll be selling your products to your us entity and then uh they then your us entity will sell it to the final Us customer so it's a way again to lower the value of the product for customers purposes you'll be using the transfer price instead of the resale price so it minimizes the the cost of the 25% because you're paid on a lower value this of course has a tax has tax implications because if you have an operation in the US and you uh you have to uh deal with the IRS and so that there's an impact on taxes another one I wanted to mention very briefly uh let's say that you're you're selling products that you're going for which you're going to be fulfilling the installation of the Machinery or the product or or whatever apparatus you've sold usually the way we do this we put all this in one price and that's the sales price of the unit including installation so we do this today because or yesterday we did this because there was no impact there was no duties because the product came in at Z at 0% duties now if we're going to pay 25% what we should do in situations like this is we should we should separate the uh the sales of the product versus the installation and charge the installation separately as a service which then would not pay $25 % import duties how tricky is it for Canadian companies how tricky is it going to be uh we know the issue with the automobile industry there's lots of Parts going back and forth all the time I used I just wanted to use beer here as an example to highlight how complex it's going to be for our companies we uh we are one of the main supplier of aluminium for the US so the aluminium that we make in Canada we sell it to the US in raw form you know in ingots or in sheets and then the US sells us beer cans empty beer cans you know they make them there they send them to us and then we in turn fill them with beer and then we reexport our beer to the US so can you imagine if if we have to pay a 25% Duty on each of these transactions in and out it's going to add cost but also it's going to be a nightmare to administer so and this is a very common situation because as I said earlier many our inputs come from the US the US is our first supplier so uh this just to give us a little feeling for how this is going to be difficult to deal with for our companies and uh the additional cost and and headaches this is going to create briefly I just want to want to remind us and John was alluding to it want to remind us that we should try to diversify our markets and so one of the tool we have at our disposal for Market diversification so that we depend Less on the US is to use our free trade agreements some of them are underutilized particularly the SAA free trade agreement with the European Union is on is utilized only by about 60% of its potential so keep that in mind many we have free TRS with many countries some of which are very interesting have a lot of potential so um that should help us be less dependent in the US uh to on the US market in future very briefly also I don't want to give you a headach of time we already have enough of them but we may get have to get used to the term reciprocal tariffs so reciprocal tariff it means is something again totally crazy that that's been coming from the head of the US president um and and apparently he he seems to be able to do all that and be not being challenged by anybody he wants to start imposing tariffs to countries based on the tariffs that these countries impose themselves so extremely um um complex and uh um but that could be the and and also introducing potentially lot of chaos but that that could be coming up reciprocal tariffs so that would be basically instead of trump battling Canada and they would be battling the whole world at the same time so uh something to a word to recognize reciprocal tariffs and the last thing I want to share with you briefly which is not directly related to tariff but it gives us an idea what's happening around us is the fact that um Trump has canned the minimal the global minimal tax on multinationals which is uh that was didn't that did not get much publicity but this is totally outrageous this is something it's an international um agreement uh that was done at the World level that took years to negotiate and that was mainly instigated by the US and the US is pulling out of that so what this intends to do is to have a uniform system in order to tax multinationals uh tax the profits made by multinationals in the countries in which they make profits for example Amazon makes profits in Canada but doesn't pay any corporate taxes in Canada uh neither do the other digital companies so that is something that is also quite um interesting to see um and developments that we're going to hear about in in the next few weeks and month and potentially for the next four years that brings me to the end of my presentation I hope I was not too long and I hope that it was interesting for everyone and I look forward to hearing from you and uh um answering any questions you may have and I will pass the microphone back to Cecilia so thank you all for your attention thanks so much Christian much appreciated um yeah a ton of valuable resources in that um actually I'm just going to here for one second reshare my screen

here and we have time for likely a couple questions and then we're uh for anybody we've definitely seen a lot of questions popping up uh reminder uh for our housekeeping for everybody we do have two sections here um we want to ensure that we are uh using the chat for General discussion and there is is a Q&A section oh I'm just going to have to pop through these oh my goodness I'm so sorry guys so there is a Q&A section for questions so please do uh utilize that section when you're asking questions um and so again we have a couple questions that we can go through so I wanted to starting off with a a one that hopefully you can answer quick for uh this one so can you clarify the concept of nonresidential importer okay well it's very easy um usually an importer is located in the importing country so usually a Us customer buys Goods abroad and then he's the Importer for Customs for regulations for taxes but in many cases particularly with the US the US customer does not want to have anything to do with customers the US customer says I'm going to buy from you Canadians only if you make it easy for me only I I want it to be as easy as if I bought my goods from a a US company in Chicago or at or in Atlanta so it forces us to say okay fine we'll do everything for you we'll become the Importer of record we will set ourselves up with the with customs and with the customs broker etc etc whereby we will be doing the importing and we will be we will have all the responsibilities all the compliance on our shoulders and we'll pay all the costs so that you Mr or M American customer have nothing to do everything will be taken care of so this is when we become legally we become the Importer of record like the Canadian company becomes the Importer of record in the US the the US customer is just the receiver the final receiver the US customer is not the Importer does not have compliance responsibilities not every country in the world allows that to allows things to work like this for example a lot of business is done like this between Canada and the US but in Mexico it's not possible to be a non-resident importer because in Mexico in order to import Goods in Mexico you have to be a Mexican company excellent thank you very much Christian and uh we'll do one more and then we are coming back so for everybody uh just so you know at the end after we finish our with our second speaker we will be coming back uh and bringing in so we'll definitely have a chance to also get into more of these questions but for now I'm going to ask one more question before we move on uh and so this one is um should invoice prices separate out commissions for example If the product is $90 commission is 10 should it be separated or just kept a 100 for the invoice amount I can be it can be included it doesn't have to be separated because it's supposed to be included in the customer value no what's what should be separated would be um Freight insurance and any duties for example excellent thank you so much I am going to uh we're going to move into uh Dan snow as well and Christian's going to be here for afterwards for when we answer all of our different questions as well so thank you once again and moving into Dan's presentation are you Dan yes I'm going to uh allow you to share your screen now

Dan oh apologies I didn't know I was driving but I'm happy

to and if you're I'm I'm more comfortable that that's no problem I can click through for you yeah feel free to hit it okay it's yeah it's at ready so we're good to go thanks Cecilia

okay good afternoon folks my name is Dan snow you can get me to the next slide Cecilia that's perfect um I'm here to talk to you today about communication strategies so uh we know that a lot of changes are happening in the world as John and Christian have just explained um that impact you in many ways uh and so what my goal today is to give you a brief succinct presentation at a high level that's high value to tell you how to navigate commun communicating all of these changes to your stakeholders so this is your customers firstly of course and then you have your internal stakeholders who are your employees your teams your partners your suppliers your vendors and then of course thirdly are your tertiary stakeholders being uh investors VC stockholders anyone else who's looking at your company because they are investing in it and whether that's a community or financial way uh just very quickly before we dive in who am I and why do I have authority to speak to this topic my name is Dan snow uh as explained I come from uh heavily a corporate advertising and marketing background so I've worked with a lot of large International Brands like Nissan I actually started Hyundai auto Canada's social media presence back in 2009 uh I worked at the agency heavily on Visa um and I work with a Pharmaceuticals company called nardis and we actually uh worked out of Europe and the us and we were the Canadian partner to globalize all of their content so I have a lot of experience working in uh with global Brands adapting and creating content that is meant to go cross border uh I also was the director of marketing for the Canadian lgbtq Chamber of Commerce for a number of years um and now I have my own company called the snow Collective we are a fullservice marketing Communications company we work with companies that sell to other businesses specifically B2B and we specifically work with B2B companies that are sales team Le that sell complex products with long transactional Cycles so think infrastructure manufacturing metal recycling uh janitorial services so we work with what I love to call unsexy Industries to uh help them communicate and build relationships and uh have long lasting relationships with their customers a couple of our clients are United Services Group who service you know half of the LA Blas across Canada along with another a large number of other brands with facilities management and maintenance we also have some wonderful nonprofit clients like hospice Toronto who are joy to serve um and so that's a little bit about me and what it is that I do next slide please I'm here to really talk about five different points again I have you until about 5 after uh excuse me 10 after 1 um and so I want to run down five actionable pieces that you can start today because the more you communicate in an intentional pointed way the better this is going to go for all of those different stakeholders that we just mentioned so we're going to start opening with talking about honesty and openness uh we're going to talk about giving alternative options to show range to your clients uh we're going to talk about resource sharing calls to political action and maintaining communication and then from there we'll move into Q&A next slide

please so firstly there are a lot of feelings about what is happening as has been demonstrated consistently in the chat in the previous presentation and that's okay so the first thing that I want to tell you is that when money can't save you relationships save you so if this is having a negative opinion or a negative consequence on your business what we want to do is openly communicate that to your client base and to your shareholder base because if we send out generic corporate communication saying prices are going up things are becoming less available there's no opportunity to actually give any sort of context to your values to who you are and how this is impacting your business and so as we know if prices are going to change and this is just a bottom line uh procurement exercise then prices will dictate what the next step is for your client however if you have a relationship-based uh a relationship based transaction and you're not going through a giant generic corporate procurement uh entity and you actually are able to talk to your us vendors and your us clients and say this is happening it is not our choice we are suffering because of it and we're here to find a solution and work with you in order to do so uh I'll invite you to watch their Trudeau speech that happened yesterday or on Tuesday not interested in anyone's opinion about Trudeau he's a great communication team and what you will see is that he spoke directly to the American people first saying these tariffs impact you in this way and in this way and in this way and we are being forced to play ball and he did it in a very succinct impactful diplomatic way and this is how I would implore you to communicate with your clients we have been put in this position we very much value your relationship and this puts it at Jeopardy therefore here are the steps that we are taking in order to to work with you to sustain this relationship because it's incredibly important to us and also we want your feedback we're here to work with you just as you have worked with us we are a team and so what we're not here to do is get on a soap box what we're not here to do is share um personal opinion uh the other thing I would invite is as you have these communications is to standardize them so if you have a sales team an account team that is reaching out to your vendors and your clients and having these conversations I would create templated communication that senior level senior level team members approve and then effectively your sales team can then copy and paste that if you will into their communication or if you have some sort of newsletter eblast system within your marketing channel then standardized responses that can then again put the two and from in and customize the fields that allow it to be personalized but understand how it is you want to articulate this in a real meaningful way and then standardize that communication because corporate communicate that is generic it feels like it comes from a large Global conglomerate is just going to get filed and they're going to move on with their day so again the relationship selling piece comes into play when we talk about the style of communication you want to be leading with next slide please the other thing we want to do is show various options so talk to your costing team maybe you already have packages maybe there are different opportunities to bundle or as Christian was sharing unbundle different options and so this is where you may be saying these are heavily uh there are large implications happening to our pricing and that may impact your order so what that means is if you're on our middle tier and I've just given like random examples from one of our sales presentations if you're at our middle tier There's an opportunity for us to perhaps bump you down a tier or knowing that there's going to be a larger spend can we move you up so that we can bundle things together so you get greater value knowing there are going to be pricing implications so if you from the get-go can say this is happening we don't have a choice we are not happy about it however we're here to work with you and give you options of how we can continue to make this relationship sustainable here are the suite of options that you can also consider with that said there's an opportunity to say this is an example of what packaging could look like or cost savings opportunity could look like but we are here to have a conversation with you so the call to action can be if it's coming directly from a sales team member you know when can we book a call here's a link to my calendar so we want to demonstrate that we're not handcuffed as much as we can into the pricing or the structure that is going to be impacted that may result in the degradation of the relationship the ending of a contract we want to show range excuse me uh and the other thing that I want to highlight is as you look at minimizing tariff impact so as Christian was saying we're going to start separating out here the price of the goods here are the price of installation and the service that is associated with the implementation of that good and so this is also your opportunity to say this is the way we're saving you money you're going to see that it looks different on estimates our scope of work and our invoices but in order to ensure that we give you the lowest price even though these tariffs are occurring these changes are going to be happening in the way that we present sell and Bill our products and services in order to once again find a solution that's sustainable next slide

please what companies often do is they just talk about themselves to their customers this is what we're doing this is what happening to us we're having a bad day here are our prices thanks so much uh it goes back to that key theme of serve before you sell add value before you ask to receive value in return so if there are resources that you know your clients or your vendors who are impacted this because their pricing now impacts your pricing if there are resources that you can share I highly recommend you incorporate that into your communication because what this is not is a market this is not a marketing exercise this is a public relations exercise because you're managing the relationship again between the customer the vendor and yourself so what you're here to do is to help guide them as the leader within your industry and so if you know that they have no idea what's going on and they are completely lost or they're looking in the wrong direction or let's say you know their Market they're in Wisconsin and this industry and you know that there are these resources available or this Association that can help consult with them I would do your research on what the support your clients your customers need and I would share that so some examples I've given here are uh Brian Jones's company I'm not affiliated in any way um B bgj Global is a consultancy that enables you to navigate uh International change reach out to Christian like there are people who just specialize in navigating things like this and they do you know BJ bgj does a Weekly Newsletter update more frequently if uh as things happen more quickly that are of substantial impact so recommend that they reach out share resources for consultants if you feel that your client could use that um that resource we can talk about Banks and Lending Solutions we know you're negatively impacted hey vendor we can't continue or you can't continue serving Us in the previous way because you're now having major cash flow issues here's a resource so I grabbed the EDC as a random example in order to help support or again if you know us lenders or us financial consulting business administrator business advisory resources share them and say you're probably going through a tumultuous time here's someone who may be able to help you and then of course trade associations Board of Trades free events if you know that they are have an association that they perhaps are kind of T tangentially involved in or not really there's a great opportunity for you to go and look up that Association of X Y and Z manufacturers and say hey I see that these people are giving webinars maybe this is re a good resource so we've talked about how we feel we've talked about what it's going to do with our pricing and now we're saying here's someone to help you navigate this or entities to help you navigate this because we're here to help you understand what's going on so that you can be successful next slide please the other thing that I would invite invite is for you to um invite political action so politicians follow money it's no secret and so uh clients have power money has power corporations have power and so there are opportunities to say not only uh are we providing you with these resources but if you are also not happy with what's going on and you are also feeling negative impacts on your business or if you're employees are feeling negative impacts on their cost of living we would recommend that you reach out to your local Representatives state senator directly to the FI the federal government go and find your representative because you have a voice that has influence as a corporation so this is where a lot of folks do not realize that they can reach out to local government or state government in this instance you can do the same with our local government and Pro provincial government as well although we all know that they're hot and on fire right now trying to do what they can so um I would implore you to consider inviting your clients who are going to have negative repercussions from this invi point them to a channel again you don't need to go tell them what to say you don't need to put words in their mouths it's is if this negatively affects your business you can you can have a voice and you have influence through your state senator the other thing that I'll sh share is that a lot of individuals may not be actually educated on what is happening so like if you if your client or customer is only reading Fox News if you go to the Fox News website yesterday there's no mention of a Terra War happening anywhere on screen so the other challenge is is that if you have clients that are not reading a wide variety of press Outlets they don't know what's happening so this may also be an education moment for you as you do the redirect to invite them to take political ction so do not assume that everybody who you're speaking to knows what's going on because of the segregated media Outlets that are in the US that are mass but they're very segregated so again educate Point them towards in the most diplomatic disconcerning tone that you and your Communications team can can can uh work within next slide please the other thing is is keep keep up communication like if they oh NOP sorry boom gone contract's done continue communicating with them just because a relationship is is discontinued by way of a contract like a financial relationship or engagement ends does not mean that your relationship with the customer is over because either you know the us is going to turn into a total dictatorship we have a whole journey to go on or in four years like things that the pendulum will swing back and then contracts will be put back in place and the world will return to normal whatever that looks like in whatever year he's out of office and so what I would offer is firstly again this is not marketing anymore this is public relations in some cases this is crises management so regular Cadence of communication if you are in an industry heavily affected by tariffs I would say weekly to bi-weekly communication is recommended and again make sure it is impactful and succinct where you are sharing resources it's not just all about you this is how we see it impacts you this is how we want to help you serve before you sell and then what we want to do is continue updating this is what we're doing this is how we're mitigating it we've seen a success here again a case study this client we able to do X Y and Z you don't need to name the client this client that we uh provide aluminum to in the uh tool and die sector we found this kind of solution we'd love to discuss a similar one to you so keep the conversation moving in a consistent way and as we go through this transition make sure that that communication is being shared even with those who have ended your contract in the US the email uh solicitation rules are much less stringent than they are in Canada surprise so the good news is is that this isn't such a concern in Canada if you've done business with someone within the last two years you're allowed to send them marketing emails in the US I think it's like five or something so all this to say keep up the communication the other piece I would recommend is those companies that are values aligned with you so they are not happy with the administration they're not happy with sustainability environmental sustainability initiatives being removed regulations being removed Dei initiatives being removed if they are not solely money focused we're seeing this with like you know the Apple stakeholders we weighing in on Dei getting scrapped make sure you talk about your values play the relationship we are value aligned with you stay with us we're here to help you fight the good fight and if you can't do it in your update email ensure it is part of your regular marketing eblast this is where we go back to marketing on your social channels when your your sales team or account teams are having conversations with the clients reins the values that are aligned with theirs because again when money can't save you the relationship and the communication does and if we go to my last slide uh I'm happy to answer questions talk about real life challenges again we'll share this deck um so that it can be an easy next step and if you go to the next slide

Cecilia if there's any specific challenges that you're facing you can send me an email the QR code if you raise your phone to it you can book a 30 minute Zoom or phone call with me uh I'm here to I'm here to help is the long story short so thank thank you for listening I hope this was of value absolutely thank you so much uh one hugee importance uh to everybody who's listening in on understanding your customer relationships um because to Dan's Point uh that's really what it's going to be about right is like those open honest conversations leading with I think a lot of compassion in this case um and it's a nuanced conversation right like it doesn't have to be black and white um there can be you know what is that definition going to look like what's the newness going to be um so but it these are you know they're difficult conversations to have in just as impactful uh so absolutely so thank you so much Dan again um I think we have uh some questions for you here oh one of those is okay

perfect just kind of scrolling through one

second I mean can I start with one for Dan absolutely John yeah what are companies getting wrong in their crisis communication like what's the most common like first thing you see happen that they're not communicating like so I'm going show I'm G give you a tangible example we had 25 people drop off when we switch from understanding tariffs to the communication subject so there are companies in there that are not even thinking about communication right now they're too busy scrambling to figure out their new pricing strategy which is understandable like no shade but the thing is is that firstly is saying nothing is actually the most detri mental thing you can do next to saying something like ridiculous and belligerent which none of us are going to do but like remaining silent and not telling your customers where you're focused and how you're going to take action and how you see this impacting them um that is the biggest opportunity that companies are going to

miss absolutely and actually to that point to Jen I I'm wondering have you is there any kind of like a tangible example I would love to for like an example of something where you've either heard or to kind of give a dos and don'ts of a conversation between somebody in these kinds of situations so like is there language that you would definitely suggest like kind of be like okay how do you lead for this as a a person kind of going into those conversations yeah the key here is to be very pragmatic like where and I I I would steer away from you know we can talk about specific policies and specific um tariffs and executive orders what I wouldn't lead into is uh discussing different political parties I wouldn't talk about uh I wouldn't insinuate any um I wouldn't insinuate anything about Donald Trump or his mental health or how much we support him or not or how ludicrous what is happening is like these uh I would avoid like it's fine it's okay with conversation you know client oneto one but when it comes to mass communication you want want to be neutral while articulating the impact um but what you don't know is what political opinion the person on the other side of that email or that phone call has and so I would treat it like you know that that kind of taboo or cliche saying about like no politics or religion at the dinner table um so I would not talk about politics or religion in your email as well I would stick to the facts and talk about uh what the direct tangible implications are on your company your team your client and the pricing absolutely I think that's great and so just because I know uh you know we're at 117 now and I want to bring us all back so that there's some lingering questions that have been going on I know from especially from Christian's presentation um and so I definitely want to take uh the time to kind of you know bring us all back basically for everything to talk about as a group um and before we get into that I just wanted to touch on some upcoming events uh one obviously for the global growth series we are still definitely talking about the impact of tariffs um this is a constantly shifting and changing landscape so uh like I mentioned feedback is huge we want to know what's of importance to you uh the next uh webinar series that we're going to have is on March 18th this is on strengthening your supply chain which is minimizing the Tariff risks uh and you know smarter sourcing so um definitely uh Carlos is going to pop that link in the chat there um and we're going to be having uh many more webinars to come but like I mentioned especially with your feedback we want to utilize that from the surveys that you provide um so that we can know you know where to go from here and what what is really impacting and how can we talk about those things so please do fill out that survey as well but our next one is March 18th for the global growth we also have uh some other programs that are up coming uh if these are uh of interest of benefit I think some of these are definitely for a lot of companies our Advanced is executive certificate looking at financing strategies for smmes uh which is also actually happening on March 18th so really just depends on what you need to know and what you need to do for uh you know what which one you're going to pick between um and then our executive certificate on developing skilled Workforce I think especially in just talking about our customer conversations we also uh have to be talking and looking at our internal team structures and again leading with you know there's a lot of things in you know the the term uncertainty definitely comes to play and I think you know you want to be talking to your team about these things and also having uh a skilled you know like the the skills that are necessary to deal with the things that are upcoming so that is going to be on March 20th um all of these are available uh obviously I know they're going to be posted in the chat but they are also available on our website uh and then you know we want to help so as I've mentioned uh definitely reach out to us uh WTC as well as communitech um different ways to get involved with us and what we can offer and we want to be uh willing and able to help you and support you all right bringing it all back together to really end us off here um there's a few questions uh that I will start off with um to you know get us going into this chat for sure first being um we have a a question here that is from a company so they're saying you know we're a Canadian Corporation and we purchase Chinese products uh and are importing to Canada and then we export to the US it's unsold and we are sending to different people are the tariffs on cogs or MSRP are are they on in our case is that a part of our case um and so they just want to understand if those tariffs apply yes so thank you s so yes so in answer to that question um the um the tariffs and yeah so one way to minimize the impact of these 25% tariffs is if you send Goods to a distribution center in the US before they are sold so you're creating instead of maintaining stock in Tonto uh you maintain it in Buffalo and so then when you cross the border then you can declare the wholesale value of the goods that's that's the advantage of doing it you don't uh declare the resale value because the goods aren't sold yet so you you declare the wholesale price that's the value for customers purposes and then you would pay um the 25% on that and then eventually when you sell the product then you would issue the final invoice to the US customer based on the retail price and that would then have no impact on Customs because the goods will already have been gone through customs um at the border uh some of the questions I I saw if I may cilia I saw also in in the same context there was I think I I may have created some conf confusion when I said um in some cases like when I when I talked about the distribution center and I said there's no tax impact um here I mean corporate taxes that's what I wanted to clarify so some people sometimes are afraid of sending stock in the US they're afraid of having um obligations towards the IRS so I just want to clarify it's important to to to look at all this terminology um when good are imported in a country they are either dutyfree if there is a free trade agreement for example or they are taxed but they're taxed it's not a tax it's a it's a customs duty or Customs du or a tariff so that's that's one thing and then in some countries you have a sales tax like in Canada when you bring Goods into Canada you have GST you have sales tax and you have provintial tax what I was referring to when I was saying that you can send your product to a distribution center in the US and it it does not create a Nexus you remember I use that term it's a term to keep in mind because it's very it's something very important to to realize when it comes to corporate taxes so you don't want to create a situation where you create a Nexus which is an obligations towards towards the IRS to pay corporate taxes in the US so that that's uh that's what I want to clarify a little bit and let's maybe to to to clarify it in a different way I said Amazon don't pay corporate taxes in Canada right which is totally scandalous um why well because all they do in Canada is they distribute products they don't sell them they sell them from the cloud they're not they don't have a store in Canada or a sales office or salespeople they sell from the cloud and uh so outside of Canada and all they do is the distribution of the product and so that enables them to make a whole bunch of money but keep it elsewhere keep it in the cloud or in tax Havens and then not pay corporate taxes in Canada so why I wanted to talk about that is to illustrate what I was just saying earlier the other way around if you're established in Canada you have your business in Canada you have your operations in Canada you pay corporate taxes to uh the Canadian government but you have a distribution center in the US you subcontract space to a company that will um store your products and and sell send them to us consumers as you sell them you know eventually so that does not create if it's managed properly it does not create a an obligation to pay corporate taxes and so that's that's what I wanted to that's what I me what I wanted to clarify because I see in the in the questions we had somebody was questioning that Wasing well how can you say that so does that mean I think someone understood that when I said that someone understood that we wouldn't pay the 25% we still pay the 25% that's the import Duty the customs duty but we don't by having a stock in in in the US providing we don't do the sales in the US providing the sales are done in Canada then we don't it does not create a tax obligation for corporate taxes so sorry for the long explanation but I felt maybe it was necessary because I saw that question coming sever in several different ways but it was basically I think it was the same question no that's that's perfect thank you for clarifying Christian absolutely um and additional question so are there any free zone areas within the US and Canada and uh what about products made in Canada or us free zone yeah so there's free zones in Canada there there's free zones in the US so they're bonded warehouses we call them sometimes too and it means you can bring Goods in there and then uh you can hold them for a while and And Delay the payment of the Tariff yes so you can do that yes you can do that in either direction but then it's you know it's a it's something that has a cost yes absolutely yeah and there's Administration involved and there's security involved so it's not that simple either but it it does exist gotcha and so um on that line so normal payment terms uh and I believe this is probably for Christian as well a lot of technical questions for sure um that maybe you know 30 days Nets normal payment terms that are 30 days net but the duties required to be paid within 5 to six days should the duty be invoiced separately uh with its immediate payment requirement well if you can it's it's it's then it it adds a bit of complexity to it but I would say yes you can if your customer is willing to pay for it but uh um I think the the impact has is more on our cash flow situation where we may have to extend credit for longer or we may have to be more to make more payments in advance and so that's a good example you have Goods crossing the border tomorrow you're going to have to outlay 25% of the value and that will have to be paid to customers immediately whereas your customer has negotiated 30 days with you so yes that's hence the additional financing costs and the additional um cash flow requirements and yes if your customer is willing to pay you if you if you if you can if you communicate so efficiently as Dan was suggesting and to the extent that the customer understands your situation and the customer says yes yes I understand you have extra cost of 25% I'm going to pay you um that 25% within seven days and I'll pay the balance within 30 days yeah if you can manage things this way with your client sure absolutely but it might not be so easy okay gotcha and I think one last question here so uh this is more personalized so uh they're an engineering and manufacturing company so they're asking can we charge engineering separate as a service uh we have always rolled out the engineering service in the product's price yes no you can't do that it' be nice if if you could but no you can't do that generally speaking what I was referring to is if you have if you're if you sold a machine and if part of the deal is that you're going to install the machine and you know you're going to send technicians install it make sure it runs properly etc etc is it is it's in that kind of circumstance I was saying okay if you have this kind of situation then it's possible to um sell sorry charge that service separately and and this way you minimize the uh the 25% you you only pay the 25% on the on the machinery and not on the installation but so it's it's in very specific circumstances and unfortunately you can't you can't say okay I'm going to separate engineering cost you know it's not it's not as simple as that unfortunately but installation okay gotcha much appreciated so I am going to uh you know pull us all back any you know in these last few minutes I want to know there's any kind of last uh words that you'd like to provide especially for everybody kind of coming in on what's going on um just to kind of wrap us up here so you know Dan Christian John anything that you want to mention of note uh in these kind of last few

minutes I'll just say very quickly put a plan together it doesn't need to be complex it doesn't need to be multi-layered just pull your key leaders and your marketing person or a marketing consultant into a room and put a plan together so that you know how and when you're going to communicate and what the key messaging is over the next you know week to month at a time but plan absolutely on my side I'd like to emphasize education so we see that these things are complex we see there's new rules regulations new costs and uh they and they can be a bit complex they're based on rules of origin HS codes uh compliance there's also we also have unrelated to that but there's potential complications for companies now with forced labor laws you know there's new laws to prevent Force labor child labor and our supply chain so what do what does all this tell us all this tells us that we need to spend a bit more time on to educate ourselves on these Regulatory Compliance Customs HS codes you know issues so it's a it's unfortunately not perhaps not as simple as it used to be and so we we do need to even if we're and whether we're small or or large it doesn't matter we have the same obligations so for smmes I know it's a challenge but um be conscious of the that of the fact that we we are we do need to spend a bit of time money and energy to educate ourselves on all these topics you know Customs compliance etc etc um supply chain traceability I put them all in the same basket because this is what I work on all the time but uh and they can be put you know in the same general basket of Regulatory Compliance for example so we do need to spend time and energy on that um nowadays yeah no that's a fantastic point that that education piece is huge absolutely anything John from you my last comment is there's there's a lot of folks asking questions about what if I try and game the system somehow um the I mean the the general principle governing a lot of these rules internationally is if you try and violate the spirit of the rule by using the letter of the rule they're going to come at you and get something um generally accepting so trying to a game system by creating artificially low purchase prices on equipment and charging all service or not invoicing or keeping separate sets of books look people get away with things for the short short term at some point you get nailed you know and then it's fine complexity compliance issues every single package you have that ever gets shipped get inspected and has a ton of homework their compliance cost goes way up and it's the same thing you know I see the questions about free trade zones there's no free in on any of this there's temporary there's circumstantial there may be things that are specific to your unique circumstances um but we're also dealing with a highly kinetic environment where it's very difficult to say does something apply today or does it not apply given my unique circumstances you have to take a look at the whole set of rules to Christian's Point uh and really think think your way through on this I invite you to reach out to folks like Christian to help navigate that as well so with that it's complicated it's challenging it's certainly stressful um I wish we had easier answers for you guys but that's not going to be the case so I'll leave it there Cecilia thank you thanks so much John and uh you know one huge thank you again to our speakers I Know Dan had to pop off but uh Christian thank you so much for coming on board I know there's a ton of technical conversations to be had here um so and you know Christian as uh has left his contact information so if you want to reach out you definitely can to have that more uh one-on-one one uh as well as any questions that we weren't able to answer that you want to uh leave with us uh our email again WTC bot.com we are more than happy to take those inquiries and send you to the right people who can answer those questions for sure um and uh lastly again we are going to be providing the recording and slides for everybody in our follow-up email so you will be receiving all of these the contact info um everything we've talked about today uh so you know look forward to that uh email itself uh otherwise thank you so much for attending we look forward to seeing you at our next session on March 18th for supply chain resilience uh big conversation to be had and uh yeah that's uh everything that's a wrap for us thanks so much