Despite the impact of U.S. tariffs on Canada’s steel and aluminum industries, a food can producer from Quebec is expanding its operations and moving part of its supply chain back to the U.S. Ideal Can, a steel can manufacturer based in Saint-Apollinaire, Quebec, is increasing its production capacity in Ontario next year to be closer to clients such as Sun-Brite Foods, Nortera, and Weil’s Food Processing, as well as to establish a stronger presence in a significant food processing hub.
Founded in 2008, Ideal Can initially imported cans from China for the Canadian food sector. About ten years later, the company shifted to domestic can manufacturing, starting with maple syrup cans before diversifying into other products.
CEO Erick Vachon emphasized the importance of independence from American production, advocating for the use of Canadian steel, in conjunction with Canadian food and a Canadian can manufacturer.
Amid the ongoing Canada-U.S. trade conflict, Ideal Can is among several local companies opting to relocate their supply chains back to Canada to leverage the Buy Canadian movement. While some industry experts view this shift as a necessity due to the trade dispute, others question its economic viability.
Cost Rises Preceded Trade Dispute
Ideal Can is set to inaugurate its Chatham plant in January in the former Crown Metal Processing facility. The addition of six production lines will increase the workforce from approximately 35 employees to 100 over a two-year period, with an investment of $100 million. By 2028, the factory is projected to produce around 1.2 billion cans annually, surpassing the 800 million cans currently produced at its Quebec plant.
Aside from its expansion, Ideal Can is reshoring a segment of its supply chain that was previously exclusively operated in the U.S. A Hamilton plant, slated to open in April, will process and treat steel sheets, supplying them to existing production facilities in Chatham and Saint-Apollinaire.
Positioning itself as the sole all-Canadian food can manufacturer, the company has witnessed a more than twofold surge in sales since the imposition of tariffs in March, as per Vachon.
The recent strategic shift was primarily triggered by U.S. President Donald Trump’s tariffs on steel and aluminum imports, initially at 25% in March, escalating to 50% on numerous products in June. However, the escalating production costs were already a concern before the trade tensions began.
This prompted Sprague Foods, a Canadian family-owned business specializing in canned organic foods, to partner with Ideal Can. Keenan Sprague, Vice President of Sprague Foods, highlighted the lack of Canadian food can manufacturers before Ideal Can, necessitating sourcing from the U.S.
Pre-tariffs, one of Sprague Foods’ U.S. suppliers hiked prices by 76%, compounded by the previous year’s weak Canadian dollar affecting cross-border operations.
Reshoring Challenges
While many companies are reshoring segments of their supply chains to Canada, some experts doubt the economic feasibility of bringing back U.S. supply chain components to Canadian territory.
Jean-Charles Cachon, an emeritus management professor at Laurentian University, suggested that relocating manufacturing to Canada could be advantageous if primarily targeting the domestic market. The declining value of the Canadian dollar, expected to persist amid oil price fluctuations, may support such a move.
However, Cachon cautioned that the economic benefits of reshoring to Canada would vary depending on the steel requirements of each company. The complexity of steel production, involving a range of unique products needing specific metal mixes generated by specialized software, poses a significant challenge.
