Features
Canadian security businesses navigate tariff uncertainty

With a trade war with the United States brewing, Canadian security companies are taking stock of their situation and in some cases rethinking market strategies in order to cope with possible economic fallout in the months and years to come.

Camden Door Controls, based in Mississauga, Ont., is a Canadian-owned manufacturer of access control and door control solutions. The majority of its products are made in Canada with some contract manufacturing overseas and global sourcing of components.

David Price, executive manager of corporate development at Camden, says the company is pursuing a three-part strategy to prepare itself for the future and successfully navigate any fluctuations in the economy. First, to shore up its Canadian customer base and continue to expand its market presence in Canada; second, to explore cost savings and efficiencies inside the business; and third, to expand into new international markets.

“Driving efficiencies is good for the company, it’s good for the customers,” says Price. “Something like a crisis will always precipitate that kind of examination.”

[Editor’s Note: Interviews for this article were conducted shortly after Prime Minister Justin Trudeau announced at the beginning of February there would be a 30-day pause on tariffs levied against Canadian goods, based on his discussions with U.S. President Donald Trump.]

Price says that most of Camden’s business is currently done in Canada and the U.S.

Expansion into the U.S. has been relatively straightforward because the two countries share similar codes and standards for low-voltage products, says Price. Expansion into some international markets, particularly Europe, is much more difficult, he says, because there are deeply entrenched trade and regulatory barriers that must be met.

Montreal-based Genetec is one of the best-known brands in the security industry and a global market leader in video management and access control systems, according to analyst reports (no.1 in VMS and currently no.2 in access control software).

Andrew Elvish, vice-president of marketing for Genetec, says the company conducted a rigorous examination of its supply chain approximately a decade ago. Genetec has since looked at all potential elements of supply chain risk, including those posed by cybersecurity risks, the impact of a global health crisis like the pandemic, and tariffs. “We wanted to build relationships that delivered dependable products to our customers no matter what’s going on,” says Elvish.

“We’re extremely proud of being a Canadian company … but we put our foot down as a global company. Diversifying supply chains, which we’ve been doing over the years, has been super important to making sure we’re in a good position,” adds Elvish.

Genetec has offices globally, as well as production facilities in multiple countries including Canada, and a diverse contract manufacturing ecosystem. The company is able to adjust production lines between different countries, which allows it to respond to changes in domestic economic policies and shifting tariff situations.

Price notes that the COVID-19 pandemic was a proving ground or stress test for businesses globally, as they handled restrictions based on public health policies as well as occupancy limitations placed on workplaces and public gathering places. The security industry was able to ride out this situation better than most. “We actually grew through the pandemic,” says Price. “In fact, I don’t think we had one product that was back-ordered due to supply chain issues during that entire period of time.”

Rise of “Buy Canadian”

In response to recent tariff threats, there has been a groundswell of Canadian patriotism and the emergence of a fervent “Buy Canadian” movement. “I think it’s more important now than ever that we support local,” says Imran Hasan, president of Transglobal Systems of Canada (TSOC), based in Mississauga, Ont.

“While it’s important to support our local restaurants and our farmers, I think supporting local is a message that goes far beyond that. There’s many businesses that are Canadian and employ local people and have technologies and products and services that are serving local businesses,” he says.

TSOC, which specializes in network cabling infrastructure and communications solutions, operates almost exclusively within Canada. While the company once considered expanding into U.S. markets, the financial barriers outweighed the benefits, making domestic growth a more strategic choice, according to Hasan. “There wasn’t enough of a motivation for us to make that decision and in hindsight it was probably a good idea not to explore that option,” he says. “I’m really optimistic about what the future looks like and I think it’s very important that we have that conversation about supporting local.”

Price says the national shift towards supporting Canadian companies and Canadian-made products is almost unprecedented. “We’ve seen a drive towards Canadian-made products on the level that we haven’t seen probably in our lifetime,” he says. “As Canadians, we’re coming to understand that we need to buy locally to help our country. That’s fundamentally important to support Canadian-based businesses in our domestic market.”

He says that supporting Canadian businesses is not only good for the local economy, but also supports job creation and Canadian innovation. Profits that are retained in Canada are reinvested in new Canadian design copyrights, patents and technology, as well as Canadian facilities. “That supplies the money we need to make Canada a leader in global manufacturing,” says Price.

When given a choice, choose Canadian products, he adds, but tread carefully, make sound purchasing decisions and be aware that many, many Canadians are employed by companies that operate in Canada but are based overseas.

Talent development at home

Genetec offers an encouraging environment for home-grown talent with a robust internship program, says Elvish. The company provides job training for more than 400 interns from local universities. For example, Genetec partners with Montreal-based Concordia University for its Women and Engineering program which matches female interns with female mentors from Genetec. In January, Genetec was recognized as one of Canada’s Top Employers for Young People by MediaCorp Canada for the second consecutive year.

“We do think of ourselves as a global company, but that said, we employ well over 1,000 people in highly skilled development jobs in Canada,” says Elvish, adding that “we’re an important part of the Quebec economy.”

As Canada-based security businesses continue to evaluate the tariff situation and adjust their approach to the market, preparation is key, says Price. “Camden is meeting weekly to review new information and we have plans in place to meet a full range of potential U.S. tariff restrictions,” he says.