This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, January 31, 2025
When Ontario Premier Doug Ford dropped the writ for a Feb. 27 election, he called for a strong mandate to protect Ontario from Donald Trump’s tariffs. As he made clear in this newspaper, “Responding to this challenge will demand extraordinary action: the need to invest tens of billions of dollars in unplanned spending and make tough choices to ensure Ontario’s economy is the most competitive place to invest, create jobs and do business.”
No one disagrees that U.S. tariffs will be a challenge. But let’s catch our breath and stop “tariff panicking.” Neither the federal government nor Ontario’s needs to blow up the deficit as they both did when unemployment surged by 1.6 million in the first three months of the pandemic. Tariffs will hurt but they won’t cause Ontario’s economy to collapse.
Even if the U.S. does impose 25 per cent levies on imports from Canada and Mexico this weekend, we don’t know what the effective rate will be on imports nor how long the tariffs will last. It may even be two types of tariffs: one specific to Canada if we deal with the border, the other long-lasting. Scott Bessent, the new U.S. Treasury secretary, proposes a tariff of 2.5 per cent on all countries, to be ramped up over time. In his eyes, better to reduce the deficit with tariffs than personal taxes. Commerce Secretary nominee Howard Lutnick made clear that a general tariff will draw more manufacturing to the U.S., a Trump administration goal for both economic and national security reasons.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
