Canada’s retaliatory tariffs on U.S. imports are costing consumers an estimated $100 million a week and raising prices by about 0.25 percent, an economist told MPs.
University of Calgary economics professor Trevor Tombe testified before the House of Commons foreign affairs committee on Oct. 21 about the counter-tariffs that Ottawa imposed on $28 billion of American imports on Sept. 8, in a tit-for-tat response to American tariffs that took effect Aug. 22.
The retaliatory tariffs ranged from 15 percent on U.S. farm equipment and appliances to 25 percent on construction supplies and 50 percent on smartphones, furniture, aluminum, and steel.
Tombe told MPs that Ottawa’s retaliatory tariffs cut half a percentage point from the disposable income of Canadians making under $30,000 a year and increased consumer prices “across the board” by roughly 0.25 percent, as first reported by Blacklock’s Reporter.
“Just for consumers, not even for businesses, it’s about $100 million per week of additional costs,” he said.
“Those costs might be worth paying if one is making an argument that there are non-economic objectives that these tariffs achieve,” he added. “I don’t know what those might be. … So, I’d say the economic case for retaliation is thin.”
The federal government has said it is applying counter-tariffs on the United States to shield domestic producers amid U.S. tariffs, and to also apply pressure on the White House to remove its tariffs.
“We’re also targeting products that will target states in the U.S.,” Industry Minister Mélanie Joly said in August.
“We’re being wise and strategic to put political pressure, and that’s why we think it’s the right thing to do right now.”
Tombe said a better way to understand the U.S. tariffs is that they are really an “American domestic policy rather than a bilateral dispute with Canada.” Furthermore, he said Ottawa’s retaliation only adds costs for Canadian consumers, while its effect on American policy “appears to be quite limited.”
He called the U.S. tariff increases “the largest trade policy change” in the country’s 250-year history.
He said the average U.S. tariff globally was 2 percent in 2024, then it jumped to 30 percent in 2025 before falling to an average of 11 percent. He put the average U.S. tariff on Canadian goods at 8 percent, lower than rates faced by 93 other countries.
“So this may be less of a trade war with Canada than a fundamental change in how the United States runs its economy,” Tombe said. He said a tariff essentially equals a domestic consumption tax plus a production subsidy of the same rate.
Tombe said Canada’s 2025 retaliatory tariffs generated $4 billion in federal revenue over six months.
He added that it’s difficult for a small country’s tariffs to meaningfully affect the target country’s economic costs, especially one as big as the United States.
“There’s no evidence that the retaliation we’ve enacted has changed U.S. behavior,” he told MPs.
Tombe said that “Canada faces something of a trilemma,” since it wants to retaliate by targeting goods from politically important states, goods where Canadian companies are major buyers, and goods where Canada can easily substitute for other things.
“And doing all three is quite difficult,” he said, noting that a tariff package meeting all those objectives would be roughly one-tenth the size of a full dollar-for-dollar retaliation.
Tombe also said Ottawa’s counter-tariff package didn’t actually follow through on dollar-for-dollar retaliation; instead, it was about 60 cents for every dollar.
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