Canadian food manufacturers are being squeezed from both sides of the border, and the country’s natural-products industry association says the pressure is forcing a hard rethink of where ingredients come from. In an interview with Retail Insider published this week, Canadian Health Food Association (CHFA) president Aaron Skelton warned that US-Canada tariffs are putting food businesses in an increasingly difficult position — one in which small and mid-sized companies, in his words, have no room to absorb duties reaching 50 percent.
The stakes, as CHFA frames them, are large. The association puts the industry’s annual output at roughly US$39.7 billion and says it supports about 147,000 full-time jobs across Canada. Those are CHFA’s figures, and they describe an industry dominated by smaller operators without the margins to simply eat a tariff bill. When duties climb that high, Skelton’s argument goes, the math of established supply chains stops working.
The sourcing recalculation
The most consequential line in the interview is not about the tariffs themselves but about what comes next. As tariffs push up the cost and uncertainty of North American trade, Skelton argues, manufacturers will inevitably reassess their procurement — and lower-cost ingredients from markets such as China become more attractive by comparison. CHFA has taken the point to Ottawa, asking the federal government to exempt gluten-free foods and whey products with no substitute supply from Canada’s retaliatory tariffs.
For buyers of imported food ingredients, the signal is clear even if the policy outcome is not. A procurement strategy built entirely around North American supply now carries a tariff risk premium that did not exist two years ago. Diversifying origins is no longer just a cost exercise; it is becoming a defensive one.
What buyers are actually doing
In practice, the recalculation looks less dramatic than the headlines. Canadian importers and distributors are doing three things: re-running landed-cost models with tariff scenarios attached, qualifying alternate-origin suppliers for their highest-volume SKUs, and locking specifications — pack sizes, cut sizes, certifications — so a switch of origin does not mean a switch of product. Frozen vegetables and fruits, garlic and ginger products, and dehydrated ingredients are exactly the categories where an alternate origin can be qualified quickly, because the specifications are standardized and the quality benchmarks are well understood.
None of this happens overnight. Qualifying a new supplier still means samples, lab checks, trial containers and a full review of food-safety documentation. But the direction of travel matters: every month that tariff uncertainty persists, the incentive to have a qualified second origin on file grows stronger.
A note of caution
Two caveats are in order. First, the figures and the 50-percent characterization are CHFA’s advocacy framing; tariff schedules, exemption lists and retaliation measures are moving targets, and buyers should verify the current rates against official schedules rather than headlines. Second, “lower cost” is only half the equation — consistency of supply, certification depth and logistics reliability decide whether an alternate origin survives past the first container.
The takeaway
For exporters watching Canada, the message is straightforward. Canadian buyers are actively recalculating, and suppliers who arrive with clear specifications, transparent landed-cost breakdowns and complete certification files will find a more receptive audience than they did a year ago. In a market where the association itself is telling manufacturers to look beyond North America, being the qualified alternative on file is the position to hold.
