Question Period Note: Tariff Impacts in Southern Ontario

Tariff Impacts in Southern Ontario

• Unjustified tariffs and trade disruptions are affecting businesses and communities in every part of southern Ontario.
• The region’s automotive and steel producing sectors, which are critical industries for all Canadians, have been particularly hard hit, while supply chains across many other sectors from agri-food to biopharma remain under threat.
• Ongoing trade uncertainty is deterring business investment in growth and productivity, posing significant risk to the region’s economy.
• In response, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is moving with laser-like focus to prioritize investments to protect the region’s impacted businesses and communities, strengthen their resilience, improve their ability to seize new market opportunities, and ultimately help them emerge from this crisis stronger and more competitive than ever.

• The United States has adopted a protectionist stand on trade, announcing a number of tariffs on several goods from multiple of countries. Currently, Canada faces tariffs of 25% on non CUSMA-compliant goods, 25% on the non-U.S. content portion of vehicles and parts, 25% on steel and aluminum, and 10% on energy and on potash.
o In turn, Canada enacted counter tariffs of 25% on $60 billion worth of U.S. goods; 25% on non CUSMA-compliant assembled vehicles from the U.S.; and 25% on the non-Canadian and non-Mexican content of CUSMA-compliant fully assembled vehicles from the U.S.
• Ontario-U.S. trade totals ~$450B annually, with Ontario being the top Canadian exporter to over 30 states. Trade with the U.S. supports up to 1 in 5 Ontario jobs, driving regional GDP and prosperity.
• Many businesses and supply chains have organized themselves across borders given the history of trade agreements in North America and the opportunity to tap into regional advantages, such as cheap labour. This deep level of integration would be very difficult to unwind and would be broadly harmful. In 2024, Ontario exported:
o $195 billion worth of merchandise to the U.S. (77% of all Ontario exports).
o $178 billion worth of manufacturing products to the U.S. (91% of Ontario’s exports to the U.S.).
o $62 billion worth of autos and parts to the U.S. (96% of Ontario’s total autos and parts exports).
o $10 billion worth of steel and aluminum products to the U.S. (96% of Ontario's total steel and aluminum exports).

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