United States tariffs may lead to the loss of over 68,000 jobs in Ontario this year, according to a recent study.
Hear this, buddy: Ontario's economy could be in for a turbulent ride this year, thanks to those blasted U.S. tariffs. According to the Financial Accountability Office of Ontario (FAO), we're looking at a potential "modest recession" and a whopping 68,100 job losses in 2025 compared to a no-tariff scenario.
The FAO's report, published on Wednesday, reveals that these job losses could nearly double by 2026, hitting 119,200, and could reach as high as 137,900 by 2029. The unemployment rate is expected to surge by 1.1 percentage points over the course of four years, averaging at 7.7% until 2029.
The report compares a tariff scenario with a no-tariff scenario, based on trade actions as of April 17. Jeffrey Novak, the province's FAO officer, cautioned that the actual impact of tariffs on Ontario's economy is uncertain and will depend on several factors. He cited the magnitude and breadth of tariff coverage, as well as how businesses, households, and economies respond.
The FAO has painted two potential scenarios. In the "low impact scenario," where all existing tariffs are cut to 10% and trade volumes are more resilient, Ontario's economy might just stave off a recession, with GDP growth at 1.3% in 2025 and 1.6% in 2026.
On the other hand, the "high impact scenario"—which involves the U.S. introducing more duties on copper, lumber, semiconductors, and pharmaceuticals, as well as increased tariffs on steel, aluminum, and automobiles, and Canada ramping up retaliatory measures—paints a grim picture. Canada's real GDP could decline by 0.5% in 2025 and grow by 0.6% the following year, pushing Ontario into a deeper recession.
The report highlights that manufacturing jobs will likely take the hardest hit, with 57,000 fewer jobs next year. Moreover, although all Ontarian cities would be negatively affected by U.S. duties, Windsor will bear the brunt of the impact, with employment rates 1.6% lower in 2026. Trailing behind Windsor comes Guelph, Brantford, the Waterloo Region, and London.
Ontario Premier Doug Ford has remained noncommittal about the FAO's findings, stating to "wait and see what happens." He pointed out that the province has been working on creating more jobs and expressed optimism about the province’s future, predicting it would outperform other jurisdictions.
- The FAO's report, published on Wednesday, states that Ontario's automotive industry might face a challenging period due to the U.S. tariffs.
- According to the FAO, if tariffs continue, the economy could see a surge in unemployment rates, reaching an average of 7.7% until 2029.
- The news of potential job losses in the automotive sector is particularly relevant to cities like Brantford, as the report predicts a decline in employment rates there.
- In the "high impact scenario" of increased tariffs on automobiles, Canada's real GDP could decline by 0.5% in 2025, which could significantly affect the provincial business and finance landscape.
- Despite the FAO's warning about the economic impact of tariffs, Ontario Premier Doug Ford remains optimistic, stating that the province will outperform other jurisdictions, but remains noncommittal about the report's findings, choosing to "wait and see what happens."
