Canada will not hesitate to take action in response to tariffs imposed by the United States, Prime Minister Justin Trudeau says, days before the inauguration of President-elect Donald Trump.
“We will not hesitate to act,” Trudeau said at a meeting of the Council on Canada-U.S. Relations in Toronto on Jan. 17. “We will respond and, I will say it again, everything is on the table.”
Trump has threatened to put 25 percent tariffs on all Canadian and Mexican exports unless the two countries take action on illegal drug smuggling and immigration at their borders. Though Ottawa has since taken steps to bolster border security by introducing a $1.3 billion plan to tackle illegal migration and trafficking, Trump has reiterated his threats to slap “substantial” tariffs on Canada.
While Canada hopes to avoid tariffs, it must respond in the “most appropriate way to demonstrate there are no winners in a trade fight,” Trudeau said. If any region or industry in the country finds itself shouldering a “larger burden of defending Canadians” the government would offer financial support, he added.
Foreign Affairs Minister Mélanie Joly told reporters at a Jan. 17 press conference that an estimated $150 billion brought in from reciprocal tariffs on the United States would be used to support Canadians. She said revenues would go to the federal government, which would then “make sure that ultimately we use the revenues to support Canadians.”
Former deputy prime minister and Liberal Party leadership candidate Chrystia Freeland made a similar comment in a Jan. 17 op-ed in the Toronto Star.
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She said the $150 billion in tariff revenue for Canada could be used to “help Canadians and businesses weather this essential fight.” The funds would provide approximately $2,700 to every Canadian making less than $150,000 per year, she said.
Joly told reporters that Ottawa remained focused on preventing the United States from putting tariffs on Canada, as well as engaging with provinces and Canadian businesses. She said she had recently spoken with senior Republican senators such as Lindsey Graham, John Thune, and Jim Risch, who she said were not in favour of the tariffs being put on Canada.
“When I mention the impacts of a Trump care tax on Americans, they’re not only surprised, they’re very worried,” Joly said of her meetings in Washington.
While Joly did not give specifics on how U.S. tariffs would impact Canada’s GDP and job numbers, she said the result would be “devastating.” The Canadian Chamber of Commerce has estimated 25 percent tariffs could shrink Canada’s economy by 2.6 percent and impact 2.3 million Canadian jobs, while Ontario Premier Doug Ford said the tariffs could cost 450,000 to 500,000 jobs in his province alone.
Energy and Natural Resources Minister Jonathan Wilkinson, who was in Washington this week, said on Dec. 16 that Republican senators and congress members do not have a clear understanding of the specifics of Trump’s tariff plan. Wilkinson said he has heard of various proposals, including tariffs set at 25 percent, 10 percent, and a low duty that increases over time.
The Canadian government has suggested a reduction in oil and gas exports to the United States as an appropriate response to the tariffs. Alberta Premier Danielle Smith has said she does not support this action because her province exports the majority of Canada’s oil to the United States.
The Canadian Press contributed to this report.
