New analysis shows reduced growth across Canadian provinces under tariffs -- as well how to hit back against the U.S.

OTTAWA, ON, March 7, 2025 /CNW/ - U.S. tariffs will reduce growth in every single Canadian province, although retaliatory tariffs can inflict significant pain on the U.S. economy in a number of targeted industries, a new analysis shows.

The emergency analysis was undertaken for the Public Policy Forum by Navius Research, a non-partisan consultancy specializing in quantitative analysis. It assesses how damaging the U.S. tariffs will be on both Canada and the United States and also analyzes potential Canada-led strategies to respond to U.S. President Donald Trump's tariffs.

"We undertook this study to provide quantitative guidance to policymakers in real-time," said Inez Jabalpurwala, PPF President and CEO. "The work reveals emergent areas of focus for Canadian leaders, including the urgent development of east-west, and west-east trade in Canada and beyond."

The analysis shows that sectors in every province decline or experience price reductions, from "gasoline and diesel refined in New Brunswick, aluminum exported from Quebec, steel and automobiles from Ontario, potash and uranium from Saskatchewan or oil and gas from Alberta," the analysis notes.

Vehicle manufacturing, for instance, would endure a hit of $93.8 billion in Ontario over a five-year period, while the aluminum industry in Quebec would lose $12.7 billion over the same time frame.

Some sectors where trade flows east-west rather than north-south (trading between provinces or with Asia and Europe) are insulated from U.S. tariffs and may actually experience growth during this period.

"Sectors with access to broader markets, such as offshore oil production in Newfoundland and LNG production on the west coast, may actually benefit from tariffs," said Jotham Peters, Managing Partner at Navius Research, "which might be a guide for how Canada can insulate its economy in the future."

In fact, the analysis notes: "Greater trade networks to either the east or west coast will help insulate Canada from trade shocks with the U.S. and can act as leverage for the next tariff threat."

An analysis of the effect of a 25% retaliatory tariff on imports of 23 classes of U.S. goods into Canada identifies the retaliatory tariffs that can inflict more damage on the U.S. than on Canada.

The U.S. would suffer more harm over a five-year period than Canada if Canada enacts retaliatory tariffs on: food, pharmaceuticals, fabricated metals, alcohol and tobacco, manufactured goods, steel, plastics, cement, non-ferrous metals, paper, mining products, clothes and wood products.

Conversely, Canada would do itself more harm than the U.S. if it retaliates with tariffs on: oil, electric products, raw wood, natural gas, chemicals, refined petroleum, machinery, biofuels, agriculture and vehicles.

Taken together, the analysis has some valuable lessons for Canadians as we navigate this unprecedented moment. It shows that the pain of U.S. tariffs is a shared one, and that "we can't afford to be split along regional lines, as Canada and Canadians are prone to do," the analysis notes. As well, it emphasizes the need for more east-west/west-east trade and illuminates the most impactful sectors to hit back with retaliatory tariffs.

SOURCE Public Policy Forum

For more information: Alison Uncles, Vice President, PPF Media + Communications, Public Policy Forum, [email protected]