Tens of thousands of Canadian workers are at risk of losing their jobs now that U.S. President Donald Trump’s Section 338 tariffs are in effect, according to one economist.
University of Calgary professor Trevor Tombe recently estimated that 87,200 jobs are in jeopardy as a result of the new 50 per cent levies.
Fifty-two thousand of those jobs are directly linked to exporters targeted by tariffs, according to Tombe’s analysis. The federal government arrived at a similar estimate in an analysis previously cited to the Star.
Another 35,000 positions, Tombe adds, are under threat indirectly through the supply chain.
“If we’re buying and selling less, then there’s going to be less outputs in wholesalers and retailers and truck transportation and things like that,” said Tombe, “because there’s just less stuff that needs to move around and get sold.”
While the impact of Section 338 tariffs on the broader labour market is expected to be relatively small, experts say the levies threaten to upend the livelihoods of individual workers, many of whom might already be struggling to make ends meet.
More than a million Canadians work in industries exposed to the new tariff
“If somebody unfortunately has a job break or a layoff, the amount that they are being paid through the employment insurance program … doesn’t begin to cover their bills,” said Bea Bruske, president of the Canadian Labour Congress (CLC).
“Can you imagine a two-person household where both folks work in a manufacturing plant, they’re both laid off, and now their income is cut by 50 per cent?”
The CLC estimates that 1.1 million Canadians work in industries directly exposed to the new tariffs. Out of those workers, some 232,000 are unionized.
Tombe found that the people most exposed to Section 338 tariffs work in agriculture as well as in the manufacturing of electronics, furniture, clothing, and plastics and rubber.
Ontario could see the largest job losses, followed by Quebec and British Columbia.
He said that the timing of potential layoffs depends on a number of factors.
‘Imminent layoffs’ are not on the table — for now
“It arrives quicker if businesses anticipate the tariffs will last a long time,” Tombe said. “If they think the tariffs won’t last a long time, they might not do anything.”
Nicole Vlanich, executive director of the Canadian Association Of Mold Makers, said that “imminent layoffs” are not on the table — for now.
The association represents companies within the moldmaking, manufacturing and plastic industries.
“They’re doing the best that they cannot to lay off workers,” she said. “But it’s not something they can guarantee.”
On Tuesday, the federal government announced counter-tariffs as it rolled out $7.5 billion in support for workers and businesses harmed by the trade war.
Among the relief measures, the government said it would extend how long workers can receive employment insurance (EI) payments, while allowing people to collect EI even if they leave their jobs voluntarily.
“It’s a good initial response,” said Bruske, “but we need to be ready to do more because workers didn’t cause this trade war. (They) need to be supported and protected in Canada right now.”
Bruske emphasized that many still struggle to access EI and that the payments are often not enough to cover living expenses.
In the grand scheme of things, however, a loss of nearly 90,000 jobs won’t drastically hurt the economy, said Jim Stanford, and economist and director of the Centre for Future Work.
By comparison, employment increased in Canada by 75,000 positions in July alone.
“This obviously is another blow, particularly to Canadian manufacturing,” said Stanford, “but (it’s) a small blow.”
Economists are predicting that the national jobless rate could rise from 6.4 per cent currently to around seven per cent by year end. That’s similar to levels seen last September.
“Some people’s lives are going to be very badly damaged by what Trump did on Friday night,” said Stanford. “But in the context of a labour market of 20 million people that right now is creating jobs rapidly, this is incremental bad news. Those tariffs alone will not alter Canada’s trajectory at all.”
With files from Sadeen Mohsen.
