Ottawa unveils support, retaliation plan as trade talks collapse

The federal government is moving on multiple fronts to shield Canadians from the economic fallout of the escalating trade war with the United States. Jobs Minister Patty Hajdu said Ottawa will not wait for stalled negotiations to conclude before rolling out new supports for workers and businesses hit by U.S. tariffs, with additional measures coming “in very short order” to help small and medium-sized enterprises.

“This is about protecting, in many cases, small businesses, which are very important to the fabric of Canada’s economy,” Hajdu said during an announcement at Mount Royal University in Calgary. The government will work with chambers of commerce, regional economic development agencies, and other partners to deliver the aid.

Hajdu said Ottawa is also bolstering coordination across Canadian supply chains and investing in domestic capacity, adding that Canada has “extremely skilled negotiators” at the table. Her remarks came as the U.S. imposed 50% tariffs on approximately $28 billion worth of Canadian products, with a broader 50% tariff on all cars, trucks, automotive parts, and steel set to begin in January.

In a sign of the toll the standoff is taking, Statistics Canada reported a loss of 84,000 jobs in February alone — a figure that predates the latest round of U.S. tariffs. University of Calgary economist Trevor Tombe estimates that the new 50% tariffs could put roughly 87,000 Canadian jobs at risk, including about 52,000 jobs directly tied to exports and another 35,000 indirect positions.

Tombe’s analysis, released Aug. 20, projects that Ontario would be the hardest hit with approximately 36,100 potential job losses, followed by Quebec with 18,300 and British Columbia with 11,200. The industries most at risk include machinery, electronics, plastics, rubber, furniture, and toys. B.C.'s heavy exposure to component circuit-board electronics and wood products makes it particularly vulnerable, while Alberta, Saskatchewan, and much of Atlantic Canada would see comparatively limited impact.

“If we assume that these tariffs remain in place for some time, what it effectively means is that Americans will be purchasing fewer of the tariff items from Canadian producers — and that will mean less output in Canada and therefore less employment in those exporting firms,” Tombe said.

Retaliatory tariffs announced as Carney vows dollar-for-dollar response

The federal government is set to announce retaliatory tariffs on Tuesday, with Prime Minister Mark Carney vowing dollar-for-dollar measures against American goods, sources told CTV. The Department of Finance said four ministers, including Finance Minister Francois-Philippe Champagne and Jobs Minister Patty Hajdu, would be present for the announcement Tuesday night.

Ottawa will also expand Employment Insurance to help domestic workers affected by the U.S. tariffs, and provincial premiers will be briefed on the measures.

Carney said a deal had been within reach but that the U.S. introduced last-minute demands that made an agreement impossible. “The U.S. introduced, in the last hours, efforts to restrict our ability to have other trade deals... Unacceptable,” he said. Canada would return to talks when American negotiators adopt “the right attitude towards their industries,” he added, accusing Washington of treating Canada as a subsidiary of the U.S. economy.

U.S. President Donald Trump escalated the dispute on social media, writing on Truth Social that Canada feels “entitled” and is “among the worst Nations in the World to deal with,” adding “WE DON’T NEED CANADA, THEY NEED US!” He also wrote “Build in the U.S. and there are ZERO TARIFFS” and “Canada will be treated like a State no longer!”

Grocery bills could rise as Ottawa weighs food-related tariffs

The threat of new counter-tariffs has raised concerns about the impact on Canadian grocery bills, with one expert warning that retaliatory measures could backfire by increasing the cost of food and other consumer goods.

Canada has been here before. In 2025, the previous Trudeau government imposed 25% counter-tariffs on a broad range of American food products, including orange juice, peanut butter, chocolate, pasta, and dairy items. A Bank of Canada study found that prices for these tariffed goods rose by about 6% relative to comparable untariffed products, with the increase approaching 8% for food and beverages at its summer peak. Most of those consumer tariffs were removed after six months.

If similar tariffs are reintroduced and expanded to include food ingredients, packaging, and agricultural equipment, the cost could reach nearly $200 annually for an average Canadian household, according to one analysis. Lower-income households would be hit hardest, as food prices are already roughly 27% higher than they were five years ago.

The final list of counter-tariffs has not been published, but dairy has been mentioned as a potential target, despite the fact that Canada already restricts dairy imports through supply management and tariff-rate quotas.

Calls for transparency as political unity holds

Conservative MP and Canada-U.S. trade critic Shuvaloy Majumdar said the public needs more information about the collapse of the negotiations. “I’ve spent the last couple of weeks in places across southwestern Ontario,” he said, describing “palpable anxiety in the eyes of our small businesses.” Majumdar has written to the government demanding the release of the terms that were presented at the table, and he supports calls for Parliament to be recalled.

Despite the criticism, the Conservative Party has backed Carney’s decision to walk away from the deal and his promise of retaliatory tariffs. Canada’s Ambassador to the United States, Mark Wiseman, defended the decision, saying, “We’re just not willing, at the end of the day, to accept terms that were unfair, uneconomic, and, you know, called into question the reliability of the deal.”

As of Monday afternoon, there were no indications that trade discussions would resume anytime soon, leaving businesses and workers bracing for the economic impact to come.