Canada’s industrial real estate sector could may feel the brunt of escalating cross-border tariffs, according to Colliers’ head of Canadian research.

Adam Jacobs made the comments in a recent interview with Bloomberg. U.S. President Donald Trump implemented 25% tariffs on automobile imports from Canada and other countries Wednesday.

Jacobs told Bloomberg that higher tariffs could squeeze manufacturers and disrupt market stability.

The industrial market, particularly the warehouse and logistics sector, largely “carried” Canadian commercial real estate and has been “unstoppable” in the past half-decade, Jacobs told Bloomberg. But the industrial market is more linked to exports and, therefore, tariffs, than asset classes.

“So, I think that’s the downside that we’re most worried about,” he told Bloomberg.

He expects different regions to experiencing various impacts. Some will not suffer much at all, but others will feel major pain.

He predicted that Southwestern Ontario will suffer an “outsized hit” due to a prevalence of automobile and parts manufacturing plants, and some markets’ reliance on oil refining and aluminum manufacturing.

But he anticipates that some manufacturers and other property users could benefit from higher tariffs as they prompt customers to support Canadian businesses. Certain manufacturers, retailers and food producers could have their “best year ever.” Meanwhile, hoteliers and restaurateurs could benefit from increased domestic travel.

The tariffs could also result in more infrastructure investment

Beyond tariffs, Jacobs pointed to broader uncertainty as a major concern. Trump has flip-flopped several times as to when he would implement tariffs through executive orders.

Many industrial investments and development projects have been put on hold as investors and users seek to wait out the tariff storm.

Canadian auto and parts manufacturers have warned that several manufacturing plants could shut down if new levies extend for an extended period.

Prime Minister Mark Carney has been preparing retaliatory measures in conjunction with provinces and territories. But reports indicate that he will not impose dollar-for-dollar counter-tariffs and target goods from Trump-supported regions to see if they can prompt him to change course.

Jacobs underscored the need for businesses to prepare for ongoing volatility.

“This isn’t just a short-term issue,” he told Bloomberg. “Companies need to factor these changes into their long-term strategies.”

Pictured: General Motors truck manufacturing plant in Oshawa, Ont.

Photo: General Motors

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