Calgary asks Ottawa for tariff relief on infrastructure projects
The city says tariffs could add hundreds of millions of dollars to its procurement costs for items like steel and fire trucks.
CALGARY — Calgary city council will ask the federal government for financial relief from cross-border tariffs that could add hundreds of millions of dollars to the city's infrastructure costs.
During an executive committee meeting Monday, members supported sending a letter from Mayor Jeromy Farkas to Finance Minister Francois-Philippe Champagne.
The letter requests an exemption from all retaliatory tariff-applicable costs for contracts signed before Sept. 8, and a dedicated tariff relief fund for municipalities for contracts awarded after that date.
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"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 letter states.
City director of supply chain management Amit Patil said the city's total tariff risk, without any mitigations, has dipped slightly from $315 million to $308 million.
That total assumes tariffs would remain in place for the lifecycle of affected contracts, Patil added.
So far, the city has spent $1.2 million on tariff-related costs since Canada's trade dispute with the U.S. began in February 2025, but Patil noted negotiations on other contracts could add another $5.7 million.
The higher costs mostly come from steel, aluminum, copper wire, stainless steel and fabricated construction materials.
Projects at risk include water pipeline construction, fire trucks and associated equipment procurement, light-rail transit vehicles, and the Scotia Place event centre.
To reduce tariff risk, Patil said the city is diversifying its suppliers, timing purchases, adding clauses to contracts and validating all costs from suppliers.
From an advocacy standpoint, he said the city is partnering with the Federation of Canadian Municipalities to lobby the federal government and sending its letter to the finance minister.
Ward 2 Coun. Jennifer Wyness criticized Ottawa for creating a policy that is hurting municipalities.
"If the federal government doesn't start partnering with us, I don't know how we can actually tackle our infrastructure gap," she said.
In an emailed statement, Champagne's press secretary, John Fragos, called American tariffs on Canadian exports "unjustifiable," adding the levies increase costs for both businesses and governments.
He said the government is imposing its own retaliatory countermeasures on $28 billion worth of American goods while also creating a "Buy Canadian" procurement policy.
Ottawa is also providing direct relief to impacted businesses and municipalities "by way of remissions on Canadian counter-tariffs," Fragos said.
Horizontal remissions provide immediate tariff relief on certain counter-tariffed products once they cross the border for goods used by public health, safety and national security entities, he added.
Where remissions are not available, a separate framework allows municipalities to seek relief on surtaxes in "specific and exceptional circumstances," according to Fragos.
"This includes situations where goods used as inputs cannot be sourced domestically, either on a national or regional basis, or reasonably via non-U.S. sourced suppliers," he said.
These remissions apply evenly to all products subject to tariffs, but are assessed on an application-only basis to ensure eligibility and "promote Canadian alternatives."
Fragos said Ottawa has provided $59 million to initiatives in Calgary this quarter alone, including $29 million for the North Calgary Water Servicing Project and $26 million to modernize the Olympic Oval.
"The government will continue to work with municipalities to advance measures that respond to ongoing trade uncertainties, support businesses and local communities, provide timely relief to impacted businesses, help Canadian-sourced production lines, and respond in real time to the challenges this evolving global environment poses to Canadians writ large," Fragos said.
With files from Calgary Herald