What’s at stake in the Canada-U.S. trade deal? How looming tariffs could cost Canada 90,000 jobs

What’s at stake in the Canada-U.S. trade deal? How looming tariffs could cost Canada 90,000 jobs ANALYSIS 20 AUGUST 2026 i ARTICLE SUMMARY KEY STATS At the very last minute on August 19, President Trump paused the new 50 percent tariffs on selected Canadian exports. Following ongoing negotiations between the two countries, they are now set to take effect at 12:01 am this Saturday if no final arrangement is reached. While the situation is fast-moving and there are various reports that some sort of agreement will be reached, with a measure of tariff relief for at least some sectors, it’s worth considering the implications of what happens if the 50 percent tariffs are enacted. There has been plenty of analysis of what Canada should or shouldn’t do in response, and what it should or shouldn’t agree to at the negotiating table. There has been much less analysis done on what these new tariffs might mean for jobs across the country. At the macro level, solid estimates suggest the broader economic implications may be relatively small, including from recent work by Joseph Steinberg, a University of Toronto economist, covered in The Hub. I completely agree. My own estimates also suggest that since the new tariffs apply to a relatively small share of what we sell to the United States, the average tariff rate hitting Canadian exports rises by only about 2.5 percent. The aggregate numbers, though, hide a great deal. If these tariffs take effect and remain in place, I estimate that nearly 90,000 jobs across Canada could be lost. And those losses go beyond where the tariffs directly land. Alberta is a good example: its exports are barely affected by the new tariffs, yet I estimate roughly 9,000 jobs there are at risk. To see where these estimates come from, let’s start with how tariffs affect different sectors. Exposure is uneven Using the full list of items subject to U.S. tariffs, I estimate that the most exposed sectors are machinery and electronics, plastics and rubber, furniture, toys, wood products, chemicals, food products, and clothing. Roughly half of textile exports to the United States would be affected, and nearly as high a share of furniture exports. I illustrate this below. Graphic credit: Janice Nelson And because sectors are exposed differently, so too are provinces. I estimate the new tariffs would raise the average effective tariff rate facing Ontario and Quebec exporters by about 5 percentage points (double the national average), and…