Ontario’s economy will experience a “modest recession” this year, while potential growth will be cut in half in 2026 as a result of tariffs imposed by U.S. President Donald Trump.
A report by the Financial Accountability Office of Ontario says there will be more than 68,000 fewer jobs in Ontario in 2025 as a result of tariffs, with the manufacturing sector feeling the largest impact, losing almost 58,000 jobs by 2026.
By 2029, the report says Ontario will have lost almost 140,000 jobs.
The report’s authors point out that the manufacturing sector’s supply chain industries will be impacted, particularly the more labour-intensive services industries, including trade and transport, and professional services.
Windsor, Guelph, Brantford, Kitchener-Cambridge-Waterloo and London will be the most impacted communities due to tariffs on exports because of their export-focused manufacturing exposure.
Premier Doug Ford says while tariffs will hurt, he has confidence that Prime Minister Mark Carney will “work things out with the United States.”
“The only thing that we will accept is zero tariffs. It’s as simple as that,” Ford said at an unrelated announcement Wednesday morning.
“The supply chain is so integrated that it’s going to hurt Canadians and Americans. So I’m confident, I really am. I always look at the glass half full, and no one can predict the future. But I’m predicting that we’re going to do better than other jurisdictions.”
The report goes on to say that the actual impact of tariffs on Ontario’s economy is uncertain and will depend on the “magnitude, breadth and duration” of tariffs. Under its “low impact” scenario – in which tariffs are reduced from 25 per cent to 10 per cent – Ontario could escape a recession in 2025.
Under its “high impact” scenario – which assumes additional tariffs on copper, lumber, and increases on steel, aluminum and automobiles – Ontario could experience a deeper recession than expected by the FAO.
Statistics Canada said Wednesday that the Canadian economy shrank in February, but economists say bad weather was likely the larger culprit than uncertainty related to the trade war with the U.S. It also said that early signs suggest there was moderate growth in March.
