Canada's counter-tariffs cost consumers $100 million a week, Calgary economist tells MPs, calling the economic case for retaliation thin

Canada's retaliatory tariffs against the United States are being paid for by Canadian consumers. University of Calgary economics professor Trevor Tombe told the House of Commons foreign affairs committee on October 21 that consumers alone bear about $100 million a week in additional costs, with prices rising roughly 0.25 percentage points overall and lower-income households hit hardest.

The September 8 round: size and rates

Tombe was testifying about Ottawa's latest round of counter-tariffs, imposed September 8 on about $28 billion of American imports in response to US tariffs that took effect August 22. Rates vary by product: 15 percent on US farm equipment and appliances, 25 percent on construction supplies, and 50 percent on smartphones, furniture, aluminum and steel. As Tombe put it, these are taxes, and they are paid by Canadians buying the affected goods.

Lower-income households carry the heaviest load

By Tombe's estimate, households earning under $30,000 a year lose about half a percent of disposable income, roughly triple the hit to households above $150,000. He also disputed the government's dollar-for-dollar framing: the retaliation amounts to about 60 cents on the dollar. Last year's round raised about $4 billion in federal revenue over six months.

Did retaliation change US behaviour?

Asked by a Conservative MP whether retaliation had changed Washington's conduct, Tombe said there is no evidence it has. He added that non-economic objectives might justify the costs, but he did not know what they might be, and concluded that the economic case for retaliation is thin. These are an academic's model-based estimates and judgement, not official government figures.

At the same hearing, Canadian Federation of Independent Business president Dan Kelly blasted the tariff remission process as a joke, citing files left untouched for a year. The federal government has said the counter-tariffs shield domestic producers and put pressure on the White House, with the industry minister previously describing the measures as targeted at US states and strategically applied. Testimony from the hearing will be passed to the finance, industry and trade committees.