The new 10% tariff on Canadian energy products and the 25% tariff on other Canadian exports will have both short-term and long-term consequences on our economy. These measures will raise costs for businesses and consumers, disrupt supply chains, and put pressure on industries that are already facing challenges.

In the short run, we’ll see increased costs for goods and services, particularly for construction materials like steel, aluminum, and lumber, which are crucial for the housing market. Builders will face higher costs, and they’ll pass those costs onto homebuyers and renters. Given that Sudbury and other parts of Northeastern Ontario already struggle with housing affordability, this could push home prices and rents even higher.

The Bank of Canada has already warned that these tariffs will put upward pressure on inflation, making it more expensive for Canadians to buy not just homes but also everyday goods. At the same time, manufacturers and resource-based industries in Ontario—which rely on exports—will face a decline in demand, which could lead to job losses.

Over the long run, these tariffs could force structural changes in Canada’s economy. Many companies will likely look for alternative trade partners outside the U.S., such as Europe and Asia, to reduce their dependency on American markets. This shift, while necessary, will take time and investment.

For the housing market, higher costs could discourage new housing developments, leading to a supply shortage that keeps home prices high. In Northeastern Ontario, where large-scale housing projects are already limited, this could have severe affordability consequences. The Conference Board of Canada has projected that continued tariffs could reduce Canada’s productivity growth in the long term, affecting both wages and job stability.

From a policy standpoint, the Bank of Canada may need to adjust interest rates to counteract the economic slowdown. But if rates stay high, it could further impact housing affordability by making mortgages more expensive.

There are a few key policy responses that could help. The government could:

1. Provide tax incentives and subsidies for industries most affected, particularly construction and manufacturing.
2. Invest in local supply chains to reduce dependency on U.S. imports, particularly for materials like steel and aluminum.
3. Pursue diplomatic solutions to secure tariff exemptions for key goods.
4. Encourage trade diversification by strengthening ties with Europe and Asia to counterbalance reliance on the U.S. market.

We need a multi-faceted approach because these tariffs aren’t just an economic issue—they will affect jobs, affordability, and regional development.

https://www.cbc.ca/news/canada/sudbury/tariffs-housing-prices-1.7473562