Canada’s trade relationship with the United States has entered a new period of uncertainty following the deterioration of negotiations between Prime Minister Mark Carney’s government and the Trump administration. Talks broke down after the U.S. pushed for harsher terms that Canada viewed as economically unacceptable and potentially limiting its ability to pursue trade opportunities with other countries. While the breakdown is concerning, broad consensus across government and business leaders is that no deal is better than a bad deal that compromises Canada’s sovereignty, trade opportunities or long-term economic competitiveness.
On August 22, 50 per cent U.S. tariffs took effect on $27.6 billion of Canadian goods. Critically, unlike previous measures, the new tariffs supersede protections under the Canada-U.S.-Mexico Agreement (CUSMA), exposing more Canadian products to the full weight of U.S. tariffs.
Canada has now announced a dollar-for-dollar response. Beginning September 8, Canada will impose 15, 25 and 50 per cent tariffs on $27.6 billion of U.S. imports, matching corresponding U.S. tariff rates and targeting products including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. Existing Canadian counter-tariffs, including those on autos, will remain in place.
Recognizing the significant impact tariffs on both sides of the border will have on businesses and workers, the federal government has also announced $7.5 billion in new and enhanced supports, some of which will be available for the next 36 months – past the end of term for the current U.S. administration. This includes an additional:
- $1.5 billion for the Regional Tariff Response Initiative
- $500 million BDC liquidity program
- $2 billion through the Canada Strong Diversification Fund, and
- $3.5 billion in rapid response supports for workers and employers.
The government is also lowering the minimum revenue threshold for businesses accessing BDC tariff programs to $1 million.
For Calgary businesses, these measures provide important short-term support, but they cannot eliminate the costs and uncertainty created by an escalating trade conflict. The priority must remain strengthening Canada’s economy at home by eliminating internal trade barriers, strengthening domestic supply chains and advancing regulatory reform, while continuing to diversify internationally. Canada has the resources, talent and global partnerships needed to compete – and strengthening our economy at home while pursuing opportunities abroad will be increasingly critical to long-term economic resilience.
