By Jordan Arseneault
Toronto, Ontario — June 21, 2018 — Canada could be at stake to lose 160,000 jobs, in the event that Trump makes good on his threat to slap tariffs on Canadian cars and parts.
“Almost all of these losses would occur in Ontario,” said Brian DePratto, senior economist for TD bank in an interview with the CBC.
Approximately 1.7 million Canadians work in the manufacturing industry, of that number 771,000 preside in Ontario alone.
“This shock thus means there is the potential of losing nearly one in 10 of the jobs in this sector, or one in five in Ontario,” said DePratto.
DePratto forecasts, based on tariffs levels the Trump administration placed on aluminum and steel, a ten percent tariff on car parts, accompanied by an even more drastic 25 percent burden on fully assembled vehicles.
The automotive sector won’t be the only part of the Canadian economy to feel the sting from the North American trade war.
According to DePratto the “deadweight loss” that would inevitably occur, resulting in higher prices and lower consumer confidence, would outweigh any possible government expenditure put back into the damaged sectors.
Along with jobs, the Canadian dollar stands to lose in the event of the proposed tariffs. DePratto estimates that in a worst case scenario the Canadian dollar could drop as low as 15 percent from where it stands now.
As of now, nothing is for sure. DePratto is optimistic that both neighbouring countries will come to a compromise. In the event that they don’t, Canadians should be prepared for the consequences.
“The importance of the auto sector and of trade more generally to the Canadian economy underscores the magnitude of the challenges facing Canada’s trade negotiators,” DePratto told the broadcaster.
