New 50% US tariffs land August 19 with no exemptions for compliant goods
Canada could shed 102,000 jobs by 2027 and see its unemployment rate climb to 7 percent if the trade pact governing North American commerce falls apart.
That warning anchors a report prepared for the Canadian American Business Council by Oxford Economics, which modelled the fallout from three possible outcomes for the Canada-United States-Mexico Agreement (CUSMA), including termination.
According to the analysis, a breakdown would also cost the United States 214,000 jobs in 2027, while a successful renegotiation would instead add 98,000 Canadian jobs and 137,000 American ones.
The report puts the Canadian jobless rate at 6.5 percent under a status quo of current tariffs, easing to 6.1 percent if the deal is renewed but rising to 7 percent if it dies.
The corresponding US swing is far smaller, moving between 4.3 and 4.5 percent.
Manufacturing would absorb much of the damage, though the researchers stressed the pain would spread.
Many of the lost jobs would sit in manufacturing industries "directly impacted by tariffs," the report says.
The service sector would feel it too, as lower disposable income cuts household spending and weaker trade and investment reduce demand for transportation, construction, and professional services.
The household stakes are spelled out too.
Choosing renewal over a breakdown is worth roughly $846 a year to the average Canadian household and US$516 to the average American one, the report found.
“That’s not insignificant, especially in a time where affordability is pinching everyone,” said Beth Burke, chief executive officer of the Canadian American Business Council, in an interview Tuesday.
Ontario, Quebec, Manitoba, and New Brunswick would be the provinces hit hardest, per the report, with autos, metals, machinery, electronics, chemicals, wood products, and paper products named as Canada’s most exposed industries.
Labour groups say the figures show what workers have at risk.
Canadian workers cannot be "a bargaining chip" in a trade war they did not start, Bea Bruske, president of the Canadian Labour Congress, said in an email to The Canadian Press.
The government must defend the jobs at stake, she said, but not by signing a bad deal under Donald Trump's threat to walk away.
An estimated 1.4 million American jobs and 2.5 million Canadian jobs depend on the bilateral relationship, the report notes.
The findings land against a tightening timeline.
A fresh round of 50 percent US tariffs on a range of Canadian goods takes effect August 19, and unlike most of US President Donald Trump’s other measures, these carry no CUSMA exemptions.
Canada-US Trade Minister Dominic LeBlanc and chief trade negotiator Janice Charette returned to Washington this week, and LeBlanc said on social media Tuesday that they had met US Trade Representative Jamieson Greer.
“Discussions remain ongoing, and we continue to engage at the negotiation table to firmly advance and defend Canadian interests,” he said.
Not everyone expects a rupture.
Julian Karaguesian, a lecturer at McGill University and former special adviser at Finance Canada, said the most likely path is that current tariffs simply persist, noting Canadian trade with non-US partners is rising as trade with the US slips.
A renewal “would cause bilateral tariffs to fall close to their pre-2025 levels of around 1 percent,” the report says, while a collapse “would result in large increases in both countries’ tariffs.”
