Canada’s Trade War: Is Your Business Ready?

Toronto, ON – August 29, 2026

The past week has dramatically changed the Canada–U.S. trade relationship.

After months of negotiations, Canada walked away from a proposed agreement with the United States. Prime Minister Mark Carney said the United States “asked too much and offered too little,” with unresolved issues involving autos, steel and aluminum, medium- and heavy-duty trucks, Canada’s ability to negotiate trade agreements with other countries, and concerns touching Canadian sovereignty. The United States maintains that Canada walked away after Washington had already offered significant tariff reductions.

What followed was a rapid escalation.

President Donald Trump imposed 50% tariffs on approximately US$20 billion of Canadian goods effective August 22 and has threatened to increase tariffs on Canadian cars, trucks and automotive parts to 50% beginning January 1, 2027.

Canada responded by announcing dollar-for-dollar, rate-for-rate counter-tariffs on approximately C$27.6 billion of American imports. The new Canadian tariffs, ranging from 15% to 50%, are scheduled to take effect September 8, 2026. Steel and aluminum counter-tariffs are being increased from 25% to 50%.

Unfortunately, the week was also marked by increasingly heated rhetoric and political insults. President Trump repeatedly attacked Canada and Canadian leaders and even moved to have the U.S. refer to Lake Ontario as “Lake America.” Canadian leaders responded forcefully, although several, including Ontario Premier Doug Ford, have subsequently called for the temperature to come down and for the two countries to return to the negotiating table.

WHAT DOES THIS MEAN FOR CANADIAN BUSINESS?

The impact will extend well beyond companies that directly export to the United States. Canadian supply chains are highly integrated, meaning tariffs can increase the price of materials, equipment, replacement parts and finished goods throughout the economy.

Among the sectors facing significant exposure are:

• Construction: higher costs for steel, aluminum, machinery, electrical equipment, tools, hardware, building products and imported components could affect construction budgets and project timelines.
• Manufacturing: plastics, machinery, fabricated metals, electrical equipment, furniture and numerous manufactured products are directly exposed. Companies supplying exporters could also experience reduced orders.
• Meat and food processing: processors relying on U.S. equipment, packaging, ingredients or agricultural inputs may experience higher costs, while exporters could face reduced U.S. demand.
• Agriculture: farm machinery, agricultural equipment and various food products are part of the tariff battle, creating pressure throughout the farming and food-processing supply chain.
• Wineries, breweries and alcohol producers: alcohol has been one of the most politically sensitive areas of the dispute. Provincial restrictions on U.S. alcohol remain an additional retaliatory measure in several jurisdictions.
• Electrical sector: electrical machinery, components and equipment are among the affected categories, potentially creating both higher import costs and opportunities for Canadian manufacturers.
• Hardware and building materials: steel, aluminum, tools, machinery, wood products and related goods may face substantially higher landed costs.
• Computers and electronics: electronics and technology products are included in both tariff discussions and Canadian retaliation.
• Automotive: this is becoming perhaps the most important battleground. Canadian and American automotive production is deeply integrated, with components often crossing the border several times before a vehicle is completed. A 50% tariff would have serious implications for manufacturers, parts suppliers and communities throughout Ontario and beyond.

JOBS ARE NOW AT RISK

One economic analysis cited in the material estimates that approximately 87,000 Canadian jobs could be at risk, including approximately 36,100 jobs in Ontario, 18,300 in Quebec and 11,200 in British Columbia. Machinery, electronics, plastics and rubber are among the industries projected to experience significant employment pressure.

WHAT ARE CANADIAN PREMIERS DOING?

Provincial governments are taking different approaches.

Ontario Premier Doug Ford has strongly supported Canada’s decision not to accept what he characterized as a bad agreement, while calling for major federal assistance to affected businesses. Ontario has previously considered electricity and critical-mineral measures as potential leverage.

British Columbia continues to encourage residents to buy Canadian and reduce U.S. travel, while several provinces maintain restrictions on American alcohol.

Manitoba Premier Wab Kinew and Saskatchewan Premier Scott Moe have supported targeted Canadian countermeasures while emphasizing assistance for affected businesses and workers.

Alberta Premier Danielle Smith has urged governments to avoid escalation involving oil and gas and instead accelerate major projects, investment and business assistance.

BILLIONS OF DOLLARS IN BUSINESS ASSISTANCE HAVE NOW BEEN ANNOUNCED

This is particularly important for Canadian businesses.

The Government of Canada has announced a substantial new package designed to help businesses survive the tariff disruption, protect jobs and diversify away from excessive dependence on the United States.

Among the measures are:

• Regional Tariff Response Initiative — an additional $1.5 billion.The maximum non-repayable contribution is increasing from $1 million to $3 million, with liquidity assistance of up to $2 millionavailable for eligible businesses.
• BDC Pivot to Grow — new $500 million liquidity stream to assist businesses experiencing immediate cash-flow pressures. Eligibility has also been expanded by lowering the minimum revenue threshold to $1 million.
• Canada Strong Diversification Fund — additional $2 billion to assist tariff-affected businesses with capital projects, maintenance, diversification and adaptation.
• $3.5 billion in Rapid Response Supports for Workers and Employers, including enhanced EI measures, worker retention assistance and workplace training.
• Additional specialized financing and assistance programs for steel, aluminum, forestry and large enterprises are also being expanded.
• Businesses that cannot practically replace tariffed U.S. products may also be able to pursue tariff remission or exceptional relief.

Ontario has also expanded the Protect Ontario Financing Program, providing working-capital financing for tariff-affected businesses dealing with costs such as payroll, leases and utilities. The program now covers businesses affected by U.S. Section 232 and Section 338 tariffs.

Ontario says that, collectively, it has announced nearly $30 billion in tariff-related relief and support since April 2025, including financing, tax deferrals, community assistance and worker programs.

HOW GTA STRATEGIES CAN HELP

Tariffs are changing. Government programs are changing. Billions in assistance are becoming available. Is your business getting its share?

GTA Strategies combines political, government, departmental and business experience to help Canadian companies cut through the red tape.

We can help you:

• Identify grants, loans and non-repayable funding
• Access tariff relief and government assistance
• Navigate federal and provincial programs
• Open doors with government decision-makers
• Find new Canadian and international markets

We don’t just write applications — we work with you from strategy to submission, follow-up and results.

Our involvement does not end when an application is submitted. We remain engaged with the company, follow the file and help navigate government as circumstances change.

Your success is our success. We are here for the long haul.