Nearly 90,000 Canadian jobs at risk as new US tariffs hit

The collapse of Canada–US trade talks in the early hours of Aug. 22 has set off a wave of alarm across Canadian business communities, with new analysis suggesting roughly 87,000 Canadian jobs could be at risk because of the new 50-per-cent tariffs on Canadian goods. For HR leaders managing workforces in export-linked industries, the pressure is no longer theoretical — it is arriving on the shop floor.

Canadian Prime Minister Mark Carney called the steep new US tariffs "a miscalculation" after trade talks collapsed late Friday night, with the 50-per-cent duties going into effect at the stroke of midnight. Carney blamed the breakdown of talks on what he said were the Trump administration's "uneconomic" and "unfair" demands.

The tariffs — imposed under Section 338 of the Tariff Act of 1930, which gives the US president power to impose tariffs of up to 50 per cent on goods of countries found to be discriminating against the US — apply to a sweeping range of Canadian exports. The import taxes that came into effect will apply to hundreds of products from Canada, such as plywood, liquor, electrical equipment and hockey gear.

Canada has pledged to respond. Prime Minister Carney said retaliatory tariffs on US goods will take effect on Sept. 8. The tit-for-tat escalation has left HR executives across manufacturing, forestry and trade-exposed sectors urgently reassessing headcount, hiring plans and contingency strategies.

Which provinces and industries face the most exposure

The new tariffs could cost about 87,000 jobs in Canada, with 52,000 directly affected and 35,000 indirectly, according to Trevor Tombe, an economics professor at the University of Calgary, who posted his analysis on The Hub. The hardest-hit provinces for job losses are Ontario, with an estimated 36,100 positions at risk; Quebec, with 18,300; and British Columbia, with 11,200. The industries set to have the highest number of job losses are machinery, electronics, plastics and rubber.

Tombe’s analysis draws on Statistics Canada's input-output data to model how US consumer behaviour will shift in response to higher prices on Canadian goods, and he estimates the new tariffs would raise the average effective tariff rate facing Ontario and Quebec exporters by about five percentage points – double the national average – and BC exporters by approximately seven per cent. Much of Atlantic Canada, along with Alberta and Saskatchewan, appears largely spared, according to Tombe.

That geographic unevenness has implications for workforce planning that extend well beyond directly exposed sectors. Alberta, for instance, faces meaningful job losses despite its own exports being barely touched by these tariffs, because service activity supporting exporters elsewhere wouldn’t be spared the disruption.

Vehicle tariffs add another front

The pressure intensified further on Monday, when US President Donald Trump announced an intention to impose 50-per-cent tariffs on all cars and trucks by New Year's Day, CTV News reported. Ontario Premier Doug Ford responded bluntly to the threat, making clear that Canada's provinces won’t absorb these measures without a fight. Ontario's automotive manufacturing sector — which anchors hundreds of thousands of direct and indirect jobs — sits squarely in the crosshairs.

The breakdown has broader structural consequences too. The failure to reach a deal adds another complication to the increasingly tense relationship between the two countries. The two sides had already been at the negotiating table regarding their trilateral trade pact with Mexico, known as USMCA (United States–Mexico–Canada Agreement), which was not renewed in July over concerns with US terms.

Increased unemployment ahead?

The most exposed organizations are those with significant export revenue tied to the US market in affected goods – particularly manufacturers, forestry-linked businesses, and their suppliers across Ontario, Quebec and B.C.

Job losses on this scale would push the national unemployment rate up by roughly 0.4 percentage points, to approximately 6.8 per cent, said Tombe. For HR leaders, that figure is more than a macro data point – it’s a preview of the labour market their organizations will be recruiting and retaining in, should these tariffs hold.