Mandy Rennehan, chief executive officer of retail restoration and maintenance business Freshco, says she is absolutely terrified about what a Donald Trump presidency will mean for her Oakville, Ont.-based company.
She is not the only Canadian feeling that way. As the U.S. businessman has gone from long-shot Republican presidential candidate to the party's nominee for the White House, fears that Mr. Trump will act on some of his campaign statements – like renegotiating the North American free-trade agreement and pulling the United States out of the Trans-Pacific Partnership trade agreement – have spooked some Canadian small-business owners with U.S. interests.
Ms. Rennehan is so convinced that a Trump presidency would be bad for Freshco that she is holding off on expanding the company's U.S. presence. "We certainly are not going to put any more capital investments into the U.S. until we see how the election pans out," she says.
The Yarmouth, N.S., native started Freshco in 1995 when she was 20 years old. The company creates, builds and maintains retail spaces for clients like Apple, Nike and Lululemon. It has a sizable presence in the Eastern United States and its office in Rhode Island serves as its home base for projects taking place there.
Ms. Rennehan says the United States accounts for about 30 per cent of Freshco's revenue and the company is forecasting an additional 10 per cent of its revenue growth will come from south of the border over the next three years – if the right president is in place.
"Normally we'd be making a lot more investments in the U.S. in our overhead, training and marketing," she says. "The opportunities are endless there, but we are being very cautious."
Wafu Inc. president and CEO Gil Michel-Garcia is also concerned about how a Trump presidency might affect the small Montreal-based maker of Japanese-style salad dressings and mayonnaise.
Mr. Michel-Garcia says about 10 to 15 per cent of its revenue comes from the United States and he worries that if Mr. Trump is elected, he will follow through on his promise to renegotiate NAFTA. He says that would be "extremely problematic" for small businesses such as Wafu, which had revenue of $2.4-million in 2015 and projects revenue to be $3-million in 2016.
Many of the ingredients Wafu uses to make its products – rice vinegar and pickled ginger, to name a few – are imported from the United States. Mr. Michel-Garcia says any hardening of the borders due to changes to NAFTA would increase the cost of those ingredients, making it more costly to produce Wafu's salad dressings and mayo.
If a Trump presidency results in U.S. tariffs being slapped on Canadian-made goods, Mr. Michel-Garcia says that could result in Wafu manufacturing many of its products in the United States. Currently all of its manufacturing is done in Canada.
Unlike Freshco, Wafu is not altering its business plans because of fears of a Trump presidency. Instead, Mr. Michel-Garcia says the company will watch, wait and worry. "How do you plan when you talk about renegotiating NAFTA?" he says. "You've got uncertainties as to what the new regulations would be. I do think it would have serious economic and political effects."
Ron Koslowsky, vice-president of Canadian Manufacturers & Exporters, refers to Mr. Trump's presidential campaign as a "gong show."
But Mr. Koslowsky, who runs the CME's Manitoba office in Winnipeg, says that in roundtable discussions across the province he is not hearing that any Manitoba manufacturers are having Trump-induced angst or that any of them are holding off on investment or expansion plans in the United States.
"Protectionism is always a popular thing to voice when running for elections," he says. "Typically you will see leaders backtracking in softer terms on what they said earlier once they get elected."
Keith Head, a professor at the University of British Columbia's Sauder School of Business, thinks that it is wise for Canadian small businesses to pay close attention to how a Trump presidency might affect the economy of Canada's largest trading partner.
"All these policies he's talked about collectively, I don't know if they'd cause a recession or not, but it seems reasonable they might," Prof. Head says. "But I think the major risk is that if he's an unbalanced person, then we may be living in a world more like Russia or Venezuela, where it's not so much a specific set of policies but the fact a country is run by someone who doesn't understand how to run one and tends to lash out and do things on impulse.
"I don't think Canadian businesses should be in panic mode or cancel-investments mode at this point. But I think they should observe and be aware and think about the ramifications of how the U.S. pulling out of NAFTA or the World Trade Organization would affect their particular lines of business."