A recent analysis by the Financial Accountability Office of Ontario (FAO) indicates that newly imposed U.S. tariffs could lead to significant job losses. The trade war may also slow economic growth and increase consumer prices across the province.
The FAO projects that Ontario could lose approximately 68,100 jobs in 2025 under the current tariff landscape. These job losses may rise sharply, reaching 119,200 by 2026 and 137,900 by 2029. The most vulnerable sectors are manufacturing and supply chain industries. Primary metal producers and motor vehicle parts manufacturers are among the hardest hit.
Windsor is expected to bear the brunt of these job losses, potentially facing a 1.6 per cent decline in employment by 2026. Other cities expected to be affected include Guelph, Brantford, Waterloo Region, and London. Windsor’s automotive workforce is already seeing disruption. Local officials warn that the city’s unemployment rate could rise dramatically without a swift resolution to trade disputes.
The FAO warns that the economic consequences of these tariffs could be widespread and hard-hitting. Ontario’s real GDP growth in 2025 is forecasted at just 0.6 per cent, compared to significantly higher growth in a scenario without tariffs. This shortfall could push the province into a mild recession. While the economy is expected to recover gradually, the long-term outlook remains slightly below optimal. Growth is averaging 1.8 per cent annually from 2027 to 2029, just shy of the 1.9 per cent projected without tariffs.
Consumers are also likely to feel the impact. The report anticipates a modest rise in inflation. Ontario’s Consumer Price Index is expected to be 0.2 to 0.3 per cent higher in 2025 than in a tariff-free scenario. This could translate into higher prices for goods, adding pressure to household budgets and further straining affordability for families already dealing with cost-of-living challenges.
Despite these warnings, Premier Doug Ford remains cautiously optimistic. He believes the province will outperform other regions and points to ongoing efforts to attract investment. However, opposition leaders are urging immediate action. They argue that investing in clean industries, improving supply chain resilience, and protecting agricultural land are critical to safeguarding jobs and stabilising prices.
Much will depend on how trade negotiations evolve in the months ahead. The province’s close ties with the U.S. market underscore the importance of a stable and cooperative international trade environment.
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