What Do Tariffs Mean for Canada?
Automotive, aluminum, energy: the Canadian sectors most exposed to U.S. tariffs, and what it all means.
We often hear about the effects of these decisions on the economy in general, but concretely, what do they change for Canada?
Which sectors are hit hardest?
- Automotive: Ontario exports $250 billion in goods to the United States, 30% of which is vehicles and parts. An additional 25% tax could directly hurt manufacturers and suppliers.
- Aluminum and aerospace: Two flagship Quebec sectors with no easy alternatives for redirecting their exports.
- Oil and energy: Alberta sends 89% of its exports to the United States. A tax on these products could affect the entire production chain.
- New Brunswick: 92% of the province’s exports go to the United States, leaving little room to find other markets.
Why is it worrying?
The Canadian economy is closely tied to that of the United States. These new tariffs complicate the situation for many businesses that could see their costs skyrocket.
And even though American companies must also absorb these price increases, the threat of investments being relocated is very real.
What are the solutions?
Canadian businesses will have to adapt quickly by exploring other markets, optimizing their supply structure and rethinking their investment strategies.
Governments, for their part, are talking about easing certain trade barriers between provinces and investing in new infrastructure. But these changes will take time.
In short, the coming months will be crucial.
If you are wondering how these changes could affect you and how to prepare for them, do not hesitate to schedule a meeting with me.
What exactly is a tariff?
A tariff is a tax collected on goods at the moment they cross the border. The company importing the product is the one that pays the tax. It then has to choose: absorb the cost, rework its supply chain, or pass part of the bill on to consumers.
That is why tariffs often end up affecting everyone, even people who do not work in the sectors directly targeted. Consumer prices, hiring decisions, investment projects: the effects can gradually spread through the entire economy.
What about your investments?
Periods of trade uncertainty often come with market volatility. That is normal: investors reassess the outlook for the companies affected, and prices can swing more than usual.
Historically, markets have weathered several episodes of trade tension. That guarantees nothing about the future, but it is a useful reminder: selling in the heat of the moment is rarely a good idea. A portfolio diversified by sector, region and asset class is designed precisely to cope with this kind of environment.
In other words, the best protection against uncertainty is not guessing the next headline: it is having a plan that accounts, from the start, for the possibility that episodes like this will happen.
How can you prepare, concretely?
- Keep a cash cushion so you are never forced to sell investments at the wrong time.
- Revisit your risk tolerance: is it still aligned with how your portfolio is built?
- Check the diversification of your investments, both geographic and sectoral.
- If your job or your business depends on exports, build extra breathing room into your budget.
Every situation is unique, and the impact of tariffs depends on your industry, your investments and your plans. If you would like to take stock of your situation, the Pérennité team is here to talk it through with you. Contact us.
