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In a video address on Tuesday, Prime Minister Mark Carney warned that the ongoing trade conflict with the U.S. “will come at a cost” — but he didn’t say how much.
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He made the comments the same day that Canadian counter-tariffs on $28 billion worth of U.S. imports came into effect, with the new levies of between 15 and 50 per cent impacting a long list of U.S.-made products from toilet paper and cutlery to motorcycles and refrigerators.
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These tariffs are a response to U.S. President Donald Trump’s 50 per cent tariff on $28 billion worth of Canadian goods imposed on Aug. 22, after trade talks between Canada and the U.S. broke down last month.
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Conservative Leader Pierre Poilievre called on the prime minister on Tuesday to share what the impact of the counter-tariffs on Canadian consumers would be, saying in a video shared to social media: “Every single mother, small business owner, and senior should know what they will pay in these new counter-tariffs.”
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Here’s what economic experts are saying about the potential cost.
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What will counter-tariffs on U.S. products cost Canada?
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Trevor Tombe, an economist at the University of Calgary, estimated in an analysis published by The Hub that Canada’s counter-tariffs carry a $4 billion hit to Canadian consumers, which will fall hardest on lowest-income households.
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His report suggests that households earning under $30,000 a year will lose more than 0.5 per cent of their disposable income as a result of retaliatory tariffs, which is three times larger than the hit on households earning above $150,000. Meanwhile, he says families with kids face costs of roughly $250 per year from the tariffs while those without kids face costs of less than $170.
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Tombe previously spoke to National Post’s Rob Breakenridge and explained that Canada’s counter-tariffs “are very much a tax on ourselves.”
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- Rob Breakenridge: Carney must be honest about the cost of counter-tariffs
- Carney says he’s not ‘escalating the conflict’ as Canada hits U.S. with retaliatory tariffs
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“Ultimately this is a tax on a purchase decision that a Canadian has made, either a Canadian household or individual, or a business buying an import from the U.S.,” he said. “And that means that, for the most part, tariffs are paid by Canadians, not Americans.”
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How will counter-tariffs impact Canada?
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Joseph Steinberg, professor of economics at University of Toronto, said that estimating the impact of the new counter-tariffs starts by looking back at March last year, when Canada imposed 25 per cent tariffs on $30 billion of U.S. goods.
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Steinberg told National Post that those tariffs, which remained in place until September 2025, were focused on consumer products, meaning they visibly raised prices for Canadian consumers. Despite this, he said, that is a way of doing tariffs “that is going to cause the least economic harm for our economy.”
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“The best estimates indicate that those measures increased the inflation rate here in Canada by about half a percentage point during the period in which those tariffs were in force,” he added.