On Tuesday, federal Finance Minister François-Philippe Champagne announced a special tariff exemption on American consumer and household goods for Campobello Island because of its unique location. View of Head Harbour Lighthouse on Campobello Island, N.B., on Aug 30, 2024.Nick Hawkins/The Globe and Mail
Residents of a small New Brunswick island whose sole land connection is by bridge to the state of Maine have been granted a reprieve from Canadian tariffs on American goods.
The geography of the island, which sits in the Bay of Fundy, forces its 949 residents to rely on American shops to buy their basic necessities.
On Tuesday, federal Finance Minister François-Philippe Champagne announced a special tariff exemption on American consumer and household goods for Campobello Island because of its unique location.
Mayor Harvey Matthews was relieved to see that the special exemption for his border community had been approved.
“I’m just happy the federal government finally listened to our request and actually knows where Campobello is,” said Mr. Matthews, a member of the newly formed Border Mayors Alliance, made up of Canadian mayors of cities and towns near the U.S. border in response to the trade war.
With constant changes in tariff policy, it’s hard to focus on his day-job as a fisherman and not to worry about the confusion, he said.
“You don’t know what’s going on day-to-day. There’s no rhyme or reason for it,” Mr. Matthews said. “There needs to be some clarification on all of it.”
The exemption helps people get things that they can’t get in their community, he said, because the three convenience stores on the island are too small and don’t stock the groceries people need.
Mr. Matthews’s community depends on its American counterparts in Lubec, Me., for basic groceries such as eggs and milk, to which the Canadian government has slapped on 25-per-cent tariffs. To avoid the levies, islanders would have to drive an hour and a half through Maine to mainland New Brunswick. While there is a ferry that runs to Canada, it operates only during the summer.
Mr. Matthews said that before the exemption was announced, his grocery bill jumped by $40 when he crossed back onto Canadian soil.
“There’s nobody that can just drive an hour after supper to go get a gallon of milk,” Mr. Matthews said.
The island is intertwined with its American neighbours, who are separated by only a 46-metre-long bridge. Mr. Matthews said up to 60 per cent of people on the island are dual citizens and many have relatives in the U.S. He’s the only one in his household who isn’t a dual citizen.
Most people cross that bridge daily, he said. When giving birth, many families make the 50-kilometre trip to Machias, Me., because, Mr. Matthews said, it has the closest hospital to the island. It’s that or driving two hours to Saint John.
Despite the special exemption, the uncertainties surrounding tariffs are still the biggest fear for everyone on the island, Mr. Matthews said. Summer tourism is the island’s second biggest industry after fishing, bringing nearly 180,000 people to the island annually to visit former U.S. president Franklin Roosevelt’s cottage, an international park and museum funded by the U.S. and Canada, Mr. Matthews said. He’s not sure how tariffs will affect it this year.
Canada has been embroiled in a trade war with the U.S. since March 4, after U.S. President Donald Trump first brought in 25-per-cent tariffs on all goods from Canada and Mexico, bar Canadian energy which had a 10-per-cent rate. Those tariffs have since been dropped for goods compliant with the U.S.-Mexico-Canada Agreement.
The Canadian government retaliated with its own 25-per-cent tariffs on $30-billion of American goods. It also levelled 25-per-cent reciprocal tariffs on steel and aluminum products after the U.S. announced tariffs on those products. On Wednesday, the federal government further imposed 25-per-cent reciprocal levies on non-USMCA compliant U.S.-made vehicles and on the portions of each compliant vehicle that did not originate in Canada or Mexico. The move followed auto tariffs from the U.S.
On Wednesday afternoon, Mr. Trump paused all global reciprocal tariffs for 90 days, and replaced them with a universal 10-per-cent tariff. Mr. Trump exempted Canada from the new universal tariff rate but left other tariffs in place.
John Williamson, the incumbent federal Conservative candidate for Saint John-St. Croix, said all levels of government pulled together to make the exemption happen for Campobello. The announcement was great news for islanders, he said, because families had been hit hard with large tariffs.
“Canadians are united in helping one another,” Mr. Williamson said.
Campobello Island’s exemptions are not unprecedented. During the COVID-19 pandemic, travel exemptions were approved by both the Canadian government and the White House.
Mr. Williamson said some people are concerned about stricter background and ID checks when crossing the border, but there are few other options.
“There’s a general nervousness, as well as a desire for more Canadians to shop here at home,” he said. “But when you have no choice, you have no choice.”