Calgary asks Ottawa for tariff relief as city faces $308 million in exposure

CALGARY · Calgary city council will send a letter to the federal government requesting financial relief from cross-border tariffs that threaten to add hundreds of millions of dollars to infrastructure projects. The executive committee supported the move Monday, directing a letter to federal Finance Minister Francois-Philippe Champagne. The request seeks an exemption from all retaliatory tariff costs for municipal contracts signed before Sept. 8. It also asks Ottawa to create a dedicated tariff relief fund for cities to apply to directly for contracts awarded after that date, particularly when no alternative markets exist.

The city's total potential tariff exposure is estimated at $308 million, down slightly from a previous figure of $315 million. Amit Patil, the city's director of supply chain management, provided the update, noting the figure assumes no mitigation efforts and that tariffs last for the full life of the contracts. Calgary has already spent $1.2 million on tariff-related costs since the trade dispute with the U.S. began in February 2025. Patil said the city is negotiating contracts that could add another $5.7 million to that total, with higher costs driven by steel, aluminum, copper wire, stainless steel and fabricated construction materials.

"Municipalities face many of the same tariff-related pressures as businesses when delivering large-scale infrastructure projects, yet they are reliant on third parties and suppliers to apply for the current tariff relief programs available and reimburse their municipal government customers," the draft letter states. It argues that tariff costs embedded in supply chains are difficult for cities to identify or recover, and savings from federal programs for suppliers do not always get passed on. The letter adds that targeted measures would allow municipalities to seek relief directly instead of through intermediaries. Projects facing tariff risk include water pipeline construction, fire truck procurement, light-rail transit vehicles and the Scotia Place event centre. To manage the risk, the city is diversifying its suppliers, timing purchases strategically, adding clauses to contracts and validating all costs from suppliers. On advocacy, Patil said Calgary is partnering with the Federation of Canadian Municipalities to lobby the federal government and is sending its own letter to the finance minister.

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Ward 2 Coun. Jennifer Wyness criticized federal policy. "If the federal government doesn't start partnering with us, I don't know how we can actually tackle our infrastructure gap," she said. "When we start showing these numbers, it really shows how out of touch the federal government is on the cost of infrastructure, as well as the province. I think we need to work on clear communication to show those with the bigger bank accounts how their policies are harming our municipality."

In response, finance minister's press secretary John Fragos called American tariffs "unjustifiable" in an emailed statement. He said the government is imposing retaliatory countermeasures on $28 billion of U.S. goods, promoting a "Buy Canadian" procurement policy and providing direct relief. Fragos outlined two remission programs: horizontal remissions offer immediate relief for certain products used in public health, safety, national security, auto, aerospace and manufacturing sectors. A separate framework allows municipalities to seek relief in "specific and exceptional circumstances," such as when goods cannot be sourced domestically or from non-U.S. suppliers.

Fragos said these remissions apply to all tariffed products but are assessed on an application-only basis to ensure eligibility and promote Canadian alternatives. He also noted importers can seek relief on re-exported goods through the Import Re-export Program, Duties Relief or Duty Drawback Programs. The statement highlighted $59 million in federal funding for Calgary initiatives this quarter, including support for a water servicing project, Olympic Oval modernization and crime prevention programs. "The government will continue to work with municipalities to advance measures that respond to ongoing trade uncertainties," Fragos said.

With files from Calgary Herald