Some 33,000 51黑料s could lose their jobs this year if the U.S. goes through with its proposed tariffs on Canadian goods, says an Alberta economist.
ATB Financial senior economist Siddhartha Bhattacharya spoke to about 80 members of the St. Albert and District Chamber of Commerce Feb. 12. His talk focused on Alberta’s economic outlook and how a looming Canada/U.S. trade war could affect its prospects.
U.S. President Trump has threatened to put a 25 per cent tariff on Canadian goods (10 per cent on energy) plus an additional 25 per cent on steel and aluminum this March. Canada has vowed to slap retaliatory tariffs on some 1,256 categories of American goods, including rice, candy, shampoo, orange juice, and shotgun cartridges if that happens.
Alberta could lose 33,000 jobs if these tariffs were imposed, Bhattacharya said — 50,000 if energy was also taxed at 25 per cent. The proposed tariffs would boost unemployment to 7.5 per cent next year, up from 7 per cent now, and reduce real GDP growth to 0.5 per cent.
“Duration is key here,” he told the crowd.
“If the tariffs are in place for a long time, that would definitely curb production.”
Prepare for trouble
Canada heads into this potential trade war from a position of weakness, Bhattacharya said. Our economy (in terms of GDP) was growing at about 1 per cent a year, and most of that was due to government spending rather than business investment — bad news for productivity and wage gains.
On the plus side, Canada seems to have inflation under control, as it has stayed within the Bank of Canada’s 1–3 per cent target since January 2024, Bhattacharya said. (If you haven’t seen a difference at the till, that’s because this refers to the annual increase in inflation; food prices were still about 25 per cent higher now than they were five years ago.) This means the bank has room for further interest rate cuts should a trade war erupt.
Bhattacharya said Trump’s proposed tariffs would be “self-defeating” if he wanted to reduce the American trade deficit. Canada accounts for less than five per cent of that deficit and helps offset a lot of it, as the Alberta crude the U.S. imports turns into American goods for export. Energy tariffs would mean higher fuel prices in the U.S., hurting businesses and raising the cost of living. As for the proposed steel and aluminum tariffs, similar tariffs imposed back in 2018 cost the U.S. some 70,000 jobs.
“The U.S. would feel the biggest impact first,” Bhattacharya said, referring to the steel and aluminum tariffs.
This was a time for caution, Bhattacharya said in an interview. Canadian governments should remove interprovincial trade barriers and seek new trade partners given the tariff threat. Consumers should support local businesses and hold off on major purchases, as the Bank of Canada would likely cut interest rates should a trade war erupt.
