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Canadian MedTech Industry: A Global Leader Under Threat from 25% US Tariffs

Canadian health innovators are global leaders, exporting more life-changing medical devices and health innovations to the US than any other country. Each year, thousands of patients and health care workers across Canada and the US depend on access to these products. The imposition of 25% tariffs for Canadian exports to the US threatens the sector’s success and the health of Canadians and Americans.

Canada’s health innovation sector relies heavily on seamless trade and collaboration with the US to thrive, innovate, and provide employment opportunities for top talent from our world-class universities. These companies hire and invest on both sides of the border and serve customers across both nations. In fact, due to our domestic market size, outdated procurement practices and lack of provincial reimbursement for new health innovation technologies, adoption is limited in Canada so the majority of patients served by Canadian health innovation companies are American.

The Medical Innovation Xchange (MIX) champions the growth of domestic scale-ups in the health tech industry. Located in Kitchener, our mission is to support these companies so they can grow and remain here, thereby aiming to propel Canada from 8th to 1st place in global health innovation.

Historically, Canadian medical technologies enjoyed tariff-free access to the US market. These tariffs will severely impact the competitiveness of Canadian companies in the US, and hinder patient access to crucial life-changing technologies. Tariffs on Canadian medtech go beyond traditional equipment to include novel and innovative solutions being designed and built right here in Canada. Furthermore, Canadian medical technology innovators depend on US imports of raw materials for prototyping, testing, and manufacturing. Retaliatory tariffs imposed by Canada on US imports would further jeopardize the success and continued presence of these companies within Canada.

A reduction or halt of exports of these innovative technologies, and an increase in costs for raw materials, could have devastating consequences for some of our most promising companies. These are small firms who have navigated a complicated industry and are on track for record growth this year. Tariffs could risk their success and undermine previous investments made by  federal and provincial governments to support their R&D.

“The current trade tensions underscore critical vulnerabilities exposed during COVID-19. Canadian health innovation companies face significant challenges in scaling their businesses due to their heavy dependence on the American market. Our export- and import-driven economy plays a crucial role in supporting domestic entrepreneurs, and trade disruptions pose a serious threat to their success,” said Elliot Fung, Executive Director at the Medical Innovation Xchange. “Health innovators are essential in driving improved outcomes for clinicians and patients, and it is imperative to safeguard their ability to thrive.”

“Thankfully, with the release of Ontario’s Life Science Strategy last fall, Ontario now has the mechanisms in place to rapidly and effectively help the medtech sector,” said Tim Dutton, Director of Corporate Affairs at Intellijoint Surgical. “A newly elected government should immediately increase funding for the Life Sciences Scale Up fund from $24 million to $200 million and the Health Technology Accelerator Fund from $12 million to $120 million and prioritize Ontario-based companies only in both programs.”