Now that restrictions are lifting across the provinces, Canadian promo firms are looking ahead to an associated increase in traditional product sales.

Ontario, the most populous province, is currently in phase three of its three-step reopening plan, though the mask mandate will stay in place for the time being. The Exit Step, under which the vast majority of restrictions will lift, has been laid out in broad terms but there’s no official timeline yet on when the province will enter that phase; officials are waiting for 75% of Ontarians to be fully vaccinated. As of this week, that number stood at just over 60%. Ontario had one of the longest virus lockdowns in the world.

But like the U.S., the country is dealing with rises in cases of the delta variant. In response, Quebec will require that some non-essential services, like restaurants and salons, ask for proof of vaccination via a provincial vaccine passport; so far, Ontario Premier Doug Ford and Alberta Premier Jason Kenney have said they will not be instituting them, while others have yet to commit to a similar move.

As restrictions lift in British Columbia, cases have also increased but there have been no deaths since last week. Its neighbor to the east, Alberta, has been very aggressive on reopening. All public health restrictions have been lifted there, based on favorable modeling, but people have expressed concerns about the impact on children since vaccinations are not yet approved for younger age groups. That may make the beginning of the school year challenging.

Manitoba has finally lifted most of its restrictions on non-essential businesses, private gatherings and religious services. Some places, like museums, art galleries and theaters, are still capped at 50% capacity but can welcome the unvaccinated.

And in a significant move, Canada has finally opened its border to fully vaccinated Americans, which resulted in hours-long lines at the Peace Arch Border Crossing in British Columbia.

Another view of the line of U.S. travelers into Canada, this one complete with Canada geese, at the Peace Arch border crossing in Surrey, British Columbia. Photo by @Jen_Gauthier pic.twitter.com/tla6KIQ15n

— corinne_perkins (@corinne_perkins) August 9, 2021

Land travelers must provide proof of vaccination and a coronavirus test before being allowed to cross into Canada, while air travelers will need to submit the same before boarding a plane to Canada (and flights with international travelers can only land at nine airports across the country). However, the U.S. has not yet reciprocated and eased restrictions for Canadian travelers; the border remains closed to Canadians through at least August 21. But the opening to Americans is good news for businesses in Canada, like restaurants, hotels and tourist attractions, that rely on American foot traffic.

It appears to be a series of positive steps for Canada and the promo industry there, even as the delta variant and ongoing supply chain concerns put a damper on full recovery. ASI research from this week found that Q2 distributor sales in the North American promotional products industry rose 27.3% when compared to Q2 2020. It’s the first year-over-year quarterly increase since 2019 and the Counselor Confidence Index is also ticking up. But the North American promo industry still wrestles with supply chain concerns, including short staffing as both governments continue to distribute COVID economic aid.

In Canada, as vaccination rates rise and clients start to plan for the months ahead, there will be increased pressure on the promo supply chain, says Jamie Mair, chief growth officer for Spector & Co. (asi/88660) in Saint-Laurent, QC. “We expect Q1 2022 demand to be very strong while Q4 will remain challenging because of supply chain limitations,” he says. “This will likely impact holiday season revenue, but we’re stocking up on core SKUs to mitigate shortages as much as possible.”

The supplier has also started back up with in-person meetings, and end-buyer industries like food & beverage, health & fitness and tech are out front in terms of returning promo demand. Small PPE items are still in the mix, says Mair, as people come to accept that they’ll be a daily essential moving forward. “We’re headed in the right direction,” he says.

But firms continue to look ahead with trepidation to the all-important fourth quarter and the supply chain challenges that loom. “Disruption and delays have magnified in recent weeks,” says Hartley Hyman, president of Toba Sportswear (asi/91408) in Winnipeg, MB, where people are looking forward to a return to normalcy and intra-province tourism is up. “In the first two quarters, we could use a bandage to close the wound. Now that we’re deep in Q3 and approaching Q4, the bandage is saturated and just isn’t holding anymore. Inventory was tight in Q1, but we could get by. Now there are shortages across suppliers.”

It’s been tough to plan, says Scott Hulbert, managing director of ideavation (asi/229801) in Toronto, since guidelines continue to change and Ontarians are especially trigger-shy after multiple lockdowns. “Our promo business right now really depends on the industry,” he says. “Those who continued spending through this are buying, but a significant number are still doing nothing. Automotive and healthcare have been aggressive with buying products and some companies want return-to-office kits, but there aren’t many events, conferences or trade shows yet.”

For now, Hulbert continues to service Canadian and American clients with custom drop-shipped boxes with virtual event merchandise, though customers in the U.S. are doing items for upcoming events, like booths, gifts for VIP clients and swag for incentive trips. He’s also looking ahead to worsening supply chain conditions in Q4.

“There will be some pushback from customers, but most should realize that everything is slower and more expensive right now,” he says. “We’re also seeing a shortage of workers across all industries. So Q4 is going to start earlier this year. We need to be talking to them by September 1. They can’t wait until November.”

Amanda Dudek, owner of A Dudek Promotions (asi/101207) in Maple, ON, says she’s seeing a marked uptick in demand for fall golf tournament items and charities are starting to order products for tentatively scheduled in-person events, since fundraising is integral to their survival. Meanwhile, companies planning to bring employees back to the office over the next couple months are asking for welcome kits with PPE items like sanitizer. “I anticipate an aggressive return to promo buying for the holiday season,” she says. “People are looking to get back to pre-COVID business.”