Nelson Zandbergen
Farmers Forum
OTTAWA — The federal government is only inflicting additional unnecessary pain on Canadians by making them pay hefty new import taxes on American goods in response to the already economically hurtful actions of U.S. President Donald Trump. A few expert voices are making this rational point, even as most Canadian policymakers — from Trudeau to Ford to Poilievre — are unified in their desire to take the emotionally satisfying approach of imposing countervailing tariffs, knowing full well it will punish Canadians further and do little to change anything south of the border.
Professor Ian Lee, associate professor at Carleton University’s Sprott School of Business, highlighted the futility of the Trudeau government’s current response in a March 3 appearance on CBC’s The National. “Remember, the Canadian tariffs will be on Canadians,” Lee said. “So when the government says ‘$100 billion or $200 billion,’ that’s a tax on Canadians.”
Lee dismissed the argument “that somehow this is going to cause Mr. Trump to change his mind,” pointing out that Ottawa’s countervailing tariffs, while a burden to Canadians, were insignificant alongside the massive U.S. economy. “On a $25- to $30-trillion economy, it’s like finding a looney on a sidewalk and thinking you’ve made it rich. It’s statistically insignificant.”
The Bank of Canada in January estimated that the American tariff alone would cut Canadian gross domestic product between 1.5 and 2 percentage points over two years — which works out to a cost of about $1,200 per person. That cost rises to about $1,900 per person if Canada retaliates, based on the combined 2.6 % GDP decline forecast by the Canadian Chamber of Commerce’s Business Data Lab.
Inflation is also worse if Canada retaliates. The Peterson Institute for Economics projects that Canada will see a 1.7 % hike in the inflation rate in 2025 as a result of the U.S. tariff alone. But if Canada retaliates, the impact is almost doubled with inflation jumping 3 %.
