At a Communitech Tariff Talk webinar on March 10, 2025, industry experts shared what tech leaders need to know about the 25 per cent tariff set to kick in on April 2. Hosted by Matthew Klassen, VP of External Relations at Communitech, the session addressed how these trade policies could affect the tech and software sectors, and how business leaders can be strategic in the weeks ahead.

A turbulent tariff environment

Tim Rollins, Waterloo Region Office Managing Partner, Tax Account Leader, Technology at EY Canada, described the current tariff environment as highly unpredictable and said the instability makes strategic planning difficult for business leaders.

Hardware companies could see significant impacts, however, as Rollins pointed out, the software sector appears to have a temporary reprieve under the United States-Mexico-Canada Agreement (USMCA). However, he believes there’s still a technical possibility of software tariffs being enforced. Rollins noted that implementing such a tariff would be complicated, as it appears to be based on outdated regulations from when software was distributed via physical media like floppy disks.

For companies with bundled hardware and software offerings, Rollins said it would be worth reassessing their business model to potentially reduce tariff exposure. His overall advice for tech leaders is to “be patient but plan” and prepare without overreacting.

Managing employee morale & employment risks

Bettina Burgess, Employment and Privacy Lawyer and Partner at Gowling WLG, offered guidance on managing talent during this turbulent time without risking constructive dismissal claims, which she says is an important consideration for tech companies that often rely on specialized talent. She strongly recommended avoiding any hasty, broad-stroke layoffs.

For tech companies, especially those scaling, this could mean exploring alternatives like reduced workweeks or participating in the federal Work-Sharing Program. 

For tech founders, especially those leading lean startups, being strategic about employment changes can prevent costly legal issues. 

??Burgess said that one of the big takeaways from the COVID-19 pandemic is that, when it comes to employee entitlements, the courts are more concerned with legal rights than an employer’s reasons for layoffs or terminations.

Burgess said that’s why it’s so important for business leaders to think ahead. Ask yourself: what does it look like if you need to reduce your workforce, and are there steps you can take now to mitigate that risk without having to go straight to termination?

Burgess broke down the three elements of constructive dismissal claims and how to avoid them:

  • Unilateral changes: Constructive dismissal applies when an employer makes changes to employment terms without the employee’s agreement. This means that even well-intentioned decisions like reducing hours or salaries need to be discussed openly with employees.

  • Material impact: The change must be significant enough to alter the employment relationship. Burgess suggested keeping reductions minimal where possible.

  • Employee detriment: If changes negatively impact the employee, there is a risk of a constructive dismissal claim. One strategy to avoid this is to offer something in exchange, such as additional time off or non-monetary benefits.

Burgess also recommended that leadership set an example by avoiding scenarios where executives retain full compensation while asking employees to accept pay cuts.

Looking ahead

Panelists believe that while the current situation is challenging, it’s not uncharted territory. Drawing parallels with the COVID-19 pandemic, they believe that with the right strategies and planning, the industry can adapt and will stabilize over time.

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