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A resolution that challenges United States President Donald Trump’s national security justification for tariffs against Canada , passed in the U.S. Senate on Wednesday evening with bipartisan support.

“The act that the president has used to declare an emergency to impose tariffs is an act that was designed to be used against adversaries,” said Democratic U.S. Sen. Tim Kaine, during remarks on the floor of the U.S. Senate chamber on Wednesday. “I stand here strongly in the belief that Canada is not an adversary, they’re an ally .”

On Feb. 1, Trump justified 25 per cent tariffs on Canadian goods and 10 per cent tariffs on Canadian energy, based on the International Emergency Economic Powers Act (IEEPA), which authorizes the president to regulate imports during a national emergency under the National Emergencies Act. The White House’s rationale was that the flow of fentanyl crossing the Canadian border met that threshold.

During the 2024 fiscal year, U.S. Customs and Border Protection seized 43 pounds of fentanyl in the Northern border area compared to 21,900 pounds at all U.S. border areas.

Kaine, who is from Virginia, said on Tuesday the resolution aims to “turn off” the Canadian border emergency declared by Trump which he calls “made-up.” The resolution is co-sponsored by U.S. Sen. Amy Klobuchar from Minnesota and U.S. Sen. Rand Paul, a Republican from Kentucky.

The final vote tally for the resolution came in at 51 yeas and 48 nays, with secured votes from all Democratic senators and three additional Republican senators, including U.S. Sen. Susan Collins from Maine, U.S. Sen. Mitch McConnell from Kentucky and U.S. Sen. Lisa Murkowski from Alaska.

Collins has previously expressed her concern over tariffs, pointing to the level of integration between Maine and Canada’s economies.

“The tariffs on Canada would be detrimental to many Maine families and our local economies,” said Collins, during remarks on the floor of the U.S. Senate chamber on Wednesday.

Other Republican lawmakers have publicly voiced concerns about tariffs and the impact they have on their constituents, including U.S. Sen. Charles Grassley from Iowa and U.S. Sen. Jerry Moran from Kansas.

The resolution will now be sent to the U.S. congress, which holds a Republican majority. Trump also has the power to veto, but Kaine said on Tuesday a bipartisan vote might convince the White House to rethink its tariff strategy.

On Wednesday, Trump said he would never approve the resolution.

• Questions about Trump's tariffs? Join our live Q&A at noon
• Trump's plan includes ‘fallback’ in case fentanyl justification falters
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“The Senate bill is just a ploy of the Dems to show and expose the weakness of certain Republicans, namely these four, in that it is not going anywhere because the House will never approve it and I, as your President, will never sign it,” he said, in a post on social media.

The resolution passed the same day Trump imposed sweeping country-by-country reciprocal tariffs to roll back what he views as “unfair trade practices.” Although Canada was spared from any additional reciprocal tariffs.

• Email: jgowling@postmedia.com

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United States President Donald Trump Wednesday imposed reciprocal global tariffs on the trading partners that sent shock waves around the world and markets plunging.

Join the Financial Post as we bring you live news and analysis on the fallout of the announcement and how it affects Canada and the world.

Click here to go straight to today’s news.

Today’s highlights

• Stock markets plunge as worldwide tariffs set in
• Oil sector scrambles despite tariff reprieve 
• Canada to impose 25% tariff on U.S. autos
• Tariff shock could tip U.S. growth to zero, say economists
• New fears in Canada’s oilpatch as tariffs threaten global growth
• Canadian dollar gains ground as greenback fades
• Canada’s trade falls into the red as exports plunge
• How did Russia dodge reciprocal tariffs?
• Build bridges, not barriers on ‘most lucrative, productive border in the world’
• Trump’s tariffs trigger two-week shutdown at Stellantis plant in Windsor
  
• Stock markets sea of red with ‘no place to hide’

What did Trump announce?

Trump announced minimum tariffs of 10 per cent on all trading partners, scheduled to take effect on Saturday, but higher, individualized tariff rates will be implemented for certain countries on April 9.

Those higher tariffs include a 34 per cent tariff on China, a 20 per cent levy on imports from the European Union, a 25 per cent tariff on South Korea and a 32 per cent levy on Taiwan.

What tariff level did Trump impose on Canada?

The White House said Canada and Mexico remain under previous economy-wide duties the president has linked to the flow of fentanyl across the borders and are not subject to Trump’s latest tariffs.

Goods compliant under the Canada-United-States-Mexico Agreement (CUSMA) will continue to be free of tariffs, but non-compliant goods face tariffs of 25 per cent, with a 10 per cent carveout for energy and potash. The 25 per cent tariffs on steel and aluminum are also still in place.

However, if the existing 25 per cent tariffs on Canadian goods are later axed, non-CUSMA-compliant goods would be only subject to a 12 per cent reciprocal tariff.

What’s next for Canada?

Prime Minister Mark Carney said Trump’s tariff regime will “fundamentally change the global trading system” but didn’t offer further details on Wednesday.

The prime minister said that while Canada wasn’t hit with the latest levies, it’s still subject to 25 per cent tariffs on steel and aluminum and 25 per cent duties on automobile imports which will come into force on Thursday.

The automobile tariffs have spread confusion throughout the deeply integrated North American auto market .

Tariffs live blog

• Questions about Trump's tariffs? Join our live Q&A at noon
• Canada escapes new levies as Trump imposes reciprocal tariffs

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United States President Donald Trump unleashed another barrage of tariffs against the world on Wednesday, though Canada was largely spared.

Trump imposed sweeping tariffs ranging from 10 per cent to 49 per cent on dozens of countries in response to what he believes are global trade imbalances.

Though Canada and Mexico avoided further tariffs on Wednesday, Liberal Leader Mark Carney has promised to respond and is planning to meet with premiers on Thursday to discuss the country’s next steps.

But what does this mean for Canada’s economy? Are there any further reactions to come? How about the resulting effect on investors?

Financial Post reporters Serah Louis, Gabriel Friedman and Jordan Gowling answered your questions during a live Q&A in the comment section of our website.

Tariff timeline so far

• February 4: Trump originally pledged his tariffs would begin, but then he delayed them by 30 days.
• March 4: Trump imposed 25 per cent tariffs on Canada and Mexico, but 10 per cent on Canadian energy and potash. Canada responded with countermeasures totalling $30 billion.
• March 5: Trump granted automakers a reprieve from tariffs, then postponed tariffs on goods covered by the Canada-United-States-Mexico Agreement (CUSMA) the next day.
• March 10: Ontario imposed a 25 per cent surcharge on electricity exports, but soon repealed them.
• March 12: The U.S. imposed 25 per cent tariffs on steel and aluminum imports. Canada imposed matching retaliatory tariffs totalling $15.6 billion a day later, along with further tariffs worth $14.2 billion.
• April 2: Trump imposed sweeping tariffs on international trading partners, though goods covered under the CUSMA have been spared.

• Canada escapes new levies as Trump imposes tariffs
• Highlights from Trump’s big tariff announcement

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Canada and Mexico might have got off (relatively) easy on Donald Trump’s Liberation Day, but for the rest of the world the tariff blow was far worse than expected — and market reaction suggests the biggest loser could be the United States.

The U.S. yesterday announced i t will impose a 10 per cent tariff on all countries, with some facing even higher rates, including 34 per cent for China and 20 per cent for Europe.

This pushes the U.S. effective tariff rate to more than 20 per cent — the highest level since the 1940s, said Toronto-Dominion Bank economists.

While Trump said trading partners could negotiate to lower those rates, analysts expect rising trade tensions and the initial shock of the announcement will lead to some retaliation.

“In the next hours and day, the world’s reaction, likely retaliation and how much effort and money countries will deploy to fight the U.S. back will matter,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“For now, everyone’s sinking, but the U.S. is going under first.”

U.S. stocks took the brunt of the selloff after the announcement. Futures dropped more than 4 per cent, compared with a 1.7 per cent decline in Asian stocks. European futures fell 2.4 per cent before paring losses.

The U.S. dollar fell against all G-10 currencies, dropping to its weakest level against the Canadian dollar since mid-December.

Analysts say there is growing anxiety that Trump’s upheaval of global trade threatens not only the U.S. economy, but the world’s as well.

“It’s definitely more aggressive than what people were expecting,” Brad Bechtel, head of foreign exchange at Jefferies Financial Group Inc. in New York, told Bloomberg. “It’s a bigger doom loop for the rest of the world.”

Canada remains under the tariffs Trump had already imposed but was not subject to this latest round. It will though feel their sting as global growth slows, particularly in the United States.

“Canada and Mexico didn’t go down with the ship, but they are left bobbing away in frigid waters,” said Derek Holt, head of Capital Markets Economics at Scotiabank.

The “astronomical increase” in the effective tariff rate on U.S. imports could shave 1 to 2 per cent off America’s gross domestic product in the medium term, said economists with CIBC Capital Markets.

Tariff revenue could soften the blow over time, but in the short run businesses and consumers are likely to hold off investment and major purchases in hopes tariffs are reduced, they said. The Federal Reserve will likely hold off rate relief as inflation rises.

Prime Minister Mark Carney warned yesterday that Trump’s tariffs would “fundamentally change the international trading system,” and he expects that to be negative for the U.S. economy.

“That will have an impact on us,” he said.

Questions about Trump tariffs? Join our live Q&A at noon today when Financial Post reporters Gabriel Friedman and Jordan Gowling will take your questions. Register here

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If you thought gold was rich in American dollars, try it in Canadian.

Spot gold peaked at US$3,149 an ounce on Tuesday, which works out to about $4,509.50.

Compare that to the summer of 2022 when gold was going for half that, said Douglas Porter, chief economist at BMO Capital Markets. 2008 was the first time gold hit $1,000 an ounce.

Even taking inflation into account, gold’s record run is impressive, he said. The past peaks adjusted for inflation were $3,000 an ounce in 1980 and later in 2020.

“Real prices are now about 50 per cent above even those lofty heights,” said Porter.

 

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U.S. President Donald Trump ’s sweeping reciprocal tariff plan comes with a “fallback” for free trade partners Canada and Mexico if a national emergency declaration on border controls and fentanyl used in February to justify 25 per cent tariffs on them doesn’t hold up.  

While no new tariffs were imposed on the two countries, the order Trump signed Wednesday contemplated the possibility of the justification being terminated or suspended, which would trigger a new 12 per cent levy.

“This is the fallback” said William Pellerin, a partner in the international trade practice at law firm McMillan LLP and former deputy director at Global Affairs Canada.   “If, for whatever reason, the original 25 per cent tariffs based on fentanyl trade are dropped — including because Canada or other parties successfully challenge those tariffs — then another fight looms to challenge these additional reciprocal tariffs that would take their place.”

According to the executive order, the reduced “ad valorem” rates of duty would not apply to energy, potash or any article eligible for duty-free treatment under the three-way CUSMA trade agreement that is a part or component of any article substantially finished in the United States.

Fen Osler Hampson, co-chair of the expert group of Canada-U.S. relations at Carleton University, said he would not be surprised if the stance on Canada was influenced by growing pushback in the United States, including Virginia Democratic Senator Tim Kaine’s challenge to the imposition of tariffs on Canada, which has even drawn support from Republicans.

“I think they’re obviously worried,” Hampson said. “The fact that there are a number of Republicans who call them on it, I think the message is getting through that we’re not the problem.”

The U.S. administration may also simply opt to reduce tariffs on Canada to the 12 per cent level. All that would need to happen is for officials to decide “that progress has been made on fentanyl/illegal immigration,” economists at Toronto-Dominion Bank said in a note Wednesday.

Hampson said the rhetoric about Canada appeared diminished Thursday, despite Trump’s pointed criticism of the country’s protected dairy industry. Hampson said the U.S. administration appears to be taking note of the interconnectedness of the economies and the potential harm of disrupting that.

“There’s recognition that there’s a lot of hidden wiring in this relationship, that if you take a chainsaw to it, you’re going to get electrocuted,” he said. “And so that that does seem to have gotten through (though) it doesn’t mean that we’re not going to experience some pain.”

The Canada-United States-Mexico Agreement also appears to be offering some protection against the sweeping and punitive shift in U.S. trade policy. Over the past few months, Trump singled Canada out for criticism over its treatment of U.S. imports including lumber and dairy, threatening “retaliatory” tariffs, but he has also backed away from some of this rhetoric as products covered under the three-way North American trade pact adopted in 2020 were exempted.

Clifford Sosnow, a partner in the international trade and investment group at Fasken Martineau DuMoulin LLP, said Trump’s latest order has the effect of “safeguarding” the CUSMA trade agreement “and giving it special treatment in certain circumstances, with the notable exception of steel and aluminum.”

For now, Canada remains subject to the 25 per cent fentanyl/illegal immigration tariff, along with 10 per on energy and potash, with carve outs for CUSMA compliant goods.

TD’s note said around 40 per cent of the dollar value of goods travelling across the border are declared CUSMA compliant, but added that the figure could climb with the incentive of avoiding tariffs.

“It’s estimated that 80 to 90 per cent of the value of exports could become CUSMA compliant,” the analysts wrote.

• Trump imposes sweeping reciprocal tariffs
• Highlights from Trump’s big tariff announcement

Hampson agreed.

“As we’ve seen in the past couple of weeks, a lot of companies are filling out that paperwork so because it’s in their interest to do so,” he said.

• Email: bshecter@postmedia.com

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United States President Donald Trump on Wednesday imposed reciprocal global tariffs on the country’s trading partners after a press conference at his Make America Wealthy event in the White House Rose Garden.

Dubbing his latest executive order “a declaration of economic independence,” he said these tariffs are a retaliation for tariff and non-tariff trade barriers imposed by other countries, both friends and foes.

Here are the highlights, and what they mean for Canada and the world:

• The U.S. imposed a minimum baseline global tariff rate of 10 per cent on all countries
• Countries with larger trade imbalances will see tariff rates as high as 49 per cent
• No new tariffs were imposed on Canada and Mexico
• Canada will continue to face tariffs of 25 per cent on non-CUSMA goods and 10 per cent on non-CUSMA potash and energy
• CUSMA qualified goods remain exempt from tariffs
• The U.S. added a clause in case the current tariff regime, justified by fentanyl trafficking, is terminated. If that happens, the 25 per cent tariff on non-CUSMA goods will fall to 12 per cent
• Previously imposed tariffs on Canadian steel, aluminum and autos remain in place
• Gold and copper are among goods exempt from the reciprocal tariffs

What did Trump announce?

The Trump administration is enacting minimum tariffs of 10 per cent on all trading partners, scheduled to take effect on Saturday, but higher, individualized tariff rates will be implemented for certain countries on April 9.

“These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved or mitigated,” a White House fact sheet said.

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During his press conference, Trump held up a chart of countries and their customized reciprocal tariff rates, such as China and the European Union, which face rates of 34 per cent and 20 per cent, respectively.

Canada and Mexico did not appear on the list.

The U.S. government also said it will impose 25 per cent tariffs on automobile imports on April 3, while duties on auto parts will follow on May 3.

What tariff level did Trump impose on Canada?

The White House fact sheet said the 10 per cent baseline levy will not be added to the tariffs Canada is already facing.

Goods compliant under the Canada-United-States-Mexico Agreement (CUSMA) will continue to be free of tariffs, but non-compliant goods face tariffs of 25 per cent, with a 10 per cent carveout for energy and potash. The 25 per cent tariffs on steel and aluminum are also still in place.

However, if the existing 25 per cent tariffs on Canadian goods (which Trump imposed earlier this year due to what he claimed were concerns about illegal immigration and fentanyl crossing the border) are later axed, non-CUSMA-compliant goods would be only subject to a 12 per cent reciprocal tariff.

“It looks like it’s not a mortal blow, nor is it an existential threat to the country,” Fen Osler Hampson, a professor of international affairs at Carleton University and co-chair of the Expert Group on Canada-U.S. Relations, said. “It means that CUSMA is not dead.”

What’s next for Canada?

Liberal Leader Mark Carney told reporters that reciprocal tariffs will “fundamentally change the international trading system,” but didn’t offer further details on Wednesday.

The White House has said it could increase or expand the scope of its reciprocal tariffs if trading partners retaliate or if U.S. manufacturing capacity and output worsen.

It also said reciprocal tariffs could be reduced or limited on countries where “non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters.”

But some economists say Canada needs to stand its ground.

“I remain of the view that when confronted by such zero-sum forces, the pacifist’s dictum that one must roll over and resist retaliation is wrongheaded,” Derek Holt, vice-president and head of capital markets economics at the Bank of Nova Scotia, said in a note on Wednesday.

“The only way to dissuade the U.S. administration from such policies and reassert one’s right to self-determination in unwavering fashion is to shove back just as hard.”

What are the global implications?

Gold, which typically increases amid periods of economic uncertainty, surged to a record high ahead of Trump’s address. After the press conference, S&P 500, Nasdaq 100 and Dow Jones futures plunged.

Anonymous sources told Bloomberg prior to the press conference that China has begun to pause registration and approvals for local companies trying to invest in the U.S., a possible move to gain leverage in trade negotiations.

“The $64,000 question is: How are (these countries) going to retaliate? If we get into a major tariff war, then we are going to very quickly slide into a global recession,” Hampson said. “It’s not just the tariffs, but the knock-on effects on investment because nobody is going to be investing in anything in this kind of hostile trade environment.”

Still, he said he believes other countries will start trying to negotiate their reciprocal tariffs down.

“(The Trump administration is) going to be overwhelmed by a long line of countries that are going to want to negotiate exemptions or reductions on tariffs, and that’s going to overload the circuits.”

slouis@postmedia.com

Imposes tariffs on trading partners in biggest assault yet on a global economic system

United States President Donald Trump announced sweeping reciprocal tariffs against U.S. trading partners on Wednesday, but did not apply an additional levy on Canada.

“This is one of the most important days in my opinion, in American history,” Trump said from the White House Rose Garden. “It’s our declaration of economic independence.”

During a sprawling press conference, Trump railed against countries he alleged have blocked U.S. access to their markets, stolen intellectual property and imposed “exorbitant” taxes on U.S. firms.

He then read from a chart that listed reciprocal tariff rates the U.S. was imposing on many countries, with tariffs ranging as high as 49 per cent set to take effect on April 9. Significant trading partners on the list included China, which will be hit with a 34 per cent tariff, and the European Union, which is facing a 20 per cent tariff. According to an executive order signed by the president, all U.S. trading partners will be subject to a baseline 10 per cent tariff as of April 5.

Canada, however, was not on the list, and the executive order later confirmed that it would not face additional tariffs. Rather, the existing tariff regime, which exempts goods covered by the Canada-United-States-Mexico Agreement (CUSMA), will remain in place.

The exemption on CUSMA goods and tariffs of 25 per cent on non-CUSMA goods and 10 per cent on non-CUSMA energy and potash “are unaffected by this order,” a White House fact sheet said.

Canada still faces a number of tariffs imposed by the U.S. administration, including a 25 per cent tariff on autos and auto parts, which are set to take effect on April 3.

A fact sheet released by the White House last week said the auto tariff will only apply to the value of non-U.S. content in exported vehicles from Canada, but it’s not immediately clear how the U.S. plans to execute this.

A 25 per cent tariff on Canadian aluminum and steel announced on March 12 also remains in effect.

Speaking to reporters in Ottawa following Trump’s announcement, Prime Minister Mark Carney said the global reciprocal tariffs will still have an impact on the Canadian economy.

“We’re in a situation where there’s going to be an impact on the U.S. economy … that will have an impact on us,” said Carney. “The series of measures will directly affect millions of Canadians.”

Carney, who is running in the federal election as leader of the LIberal Party, said Canada would respond and “fight these tariffs with countermeasures.”

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The reciprocal tariffs announced Wednesday were billed as matching duties that would help the U.S. “roll back” the unfair trade practices of other countries.

The hardest hit countries include Cambodia, which will face a 49 per cent tariff, Vietnam, at 46 per cent and Sri Lanka, at 44 per cent.

Trump used the International Emergency Economic Powers Act of 1977 (IEEPA) to justify the tariffs, declaring a national emergency “posed by the large and persistent trade deficit” caused by what he claims are unfair trade practices.

• Email: jgowling@postmedia.com

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Musk has since asserted himself in Washington in support of far-right candidates and causes, leading to protests

BlackBerry says its adjusted net income for the quarter amounted to a profit of three U.S. cents per share, same as 2024

The former Treasury chief also criticized Trump’s particular form of protectionism. 'It’s not even good mercantalism,'

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Dennis Mitchell, chief executive and chief investment officer at Starlight Capital, talks with Financial Post’s Larysa Harapyn about what strategies are best for investors amid trade uncertainty and volatile markets .

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U.S. President Donald Trump is scheduled to unveil reciprocal tariffs today on America’s trading partners, including Canada, in what he calls “Liberation Day.”

The measures are meant to even things out with those who, in Trump’s eyes, have unfairly taken advantage of the U.S. in trade, but the size and scope of new levies were still being discussed Tuesday.

When they are unveiled at 4 p.m. they have the potential to upend the global trading system and send seismic waves through markets, industries and economies around the world.

Join the Financial Post as we bring you the news as it happens.

Click here to go straight to today’s tariff news.

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What tariffs are already in place

Today’s actions will come on top of tariffs Trump has already imposed.

On March 12 the U.S. imposed 25 per cent tariffs on Canadian steel and aluminum imports.

On March 26, Trump signed an executive order to impose 25 per cent tariffs on all cars and light trucks imported to the U.S. The tariffs will come into effect on April 2 and collection will begin on April 3.

What new tariffs might Canada face

Trump has said he would not just target tariffs imposed by other countries but also non-tariff trade barriers.

In Canada these could include the digital sales tax , the goods and services tax (GST) and the dairy supply management system.

Trump has further claimed American banks aren’t allowed to do business in Canada, which could present grounds for reciprocal tariffs as well.

What is Canada doing about it

If the U.S. doesn’t remove all tariffs against Canada, the Canadian government has promised retaliatory tariffs on another $95-billion worth of taxable U.S. goods, on top of the $59.8 billion already in place.

Trump is also facing opposition within his own country. A bipartisan group of U.S. Senate lawmakers are set to vote in the next few days on a resolution to challenge the president’s national security justification for tariffs against Canada.

Could Canada come up with a deal to avoid reciprocal tariffs?

If Canada and other countries were to curb what the Trump administration perceives as “unfair” trade practices, U.S. Secretary of the Treasury Scott Bessent said the reciprocal tariffs will not go into place.

“Going into April 2, some of our worst trading partners in terms of the way they treat us have already come to President Trump offering substantial decreases in very unfair tariffs,” Bessent said.

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The United States is “unreliable to the point of hostility” and Canada, in particular, can no longer depend on its neighbour to respect agreements and come to our defence, a new report from top business leaders warns.

“The United States, under President Donald Trump , has become an unreliable partner,” the report from an expert group on Canada-U.S. relations said. “Its longstanding allies can no longer be confident that America will respect its commitments to come to their defence or respect its economic agreements. That is particularly true for Canada.”

The report, from the expert group co-chaired by Perrin Beatty, former chief executive of the Canadian Chamber of Commerce , and Fen Osler Hampson, professor of International affairs at Carlton University, is excoriating in its criticism of the Trump administration.

It accuses the president of shattering decades of built-up trust and established norms between the two countries on Jan. 20, 2025 — inauguration day — “when annexing Canada became the official policy of the new administration,” a reference to Trump’s comments that the U.S. neighbour would be better off as a 51st state .

The authors go on to say that Trump has flouted the principles or fairness and the rule of law and write that it is questionable that any new trade deal with the U.S. would be of any value.

“Even if we can negotiate an extension of CUSMA (Canada-United-States-Mexico Agreement) and the withdrawal of tariffs imposed by the Trump administration, what is the worth of Donald Trump’s signature?” they said.

They accuse Trump of a lack of “moral constraint” and argue that any future dealings with the U.S. will be guided by the “whims of one man.”

Trump’s threat are harmful for the all countries, but they are especially bad for Canada, given our proximity with the U.S., the report said.

After laying out their views on the state of affairs, the report’s authors offer measures to “mitigate Canada’s risk” of depending on the U.S., and a series of recommendations on how to negotiate with the U.S. on tariffs , the border and security.

Among the major recommendations is the creation of a federal government level “situation room” to advise the prime minister.

Currently, U.S. affairs are addressed across more than 10 federal departments and agencies including the Privy Council Office, the Department of Finance, Canada Border Services Agency and many others.

The “situation room,” would have a streamlining effect, pulling together senior officials from across the government to create “a single, strategic operational focal point” that would co-ordinate responses to developing issues and crises on the U.S. front.

It would also gather input from provinces and unions and have a mandate to model for worst-case scenarios based on Trump’s actions and their potential effects on Canada’s economy and security.

“It should be designed not just for firefighting but also for anticipating the next crisis and where future problems are likely to emerge. In other words, its role must be predictive, prescriptive and, where possible, preventive to head off a crisis before it occurs,” the authors said.

Looking ahead to the coming renegotiation of CUSMA, which is slated to begin in July 2026, the authors stressed that Canada should not rush to begin negotiating.

Instead, Canada should wait for the pressure of job losses , rising inflation and stock market malaise to mount, possibly forcing Trump to pull back on tariff threats.

Mid-term elections in the U.S. could potentially provide a check on Trump and give Canada some bargaining power.

Tariffs of some kind are likely and the authors reminded that prior to the first free trade agreement in 1988, Canada’s “overall” tariff rate was seven per cent while the U.S’s was five.

“Returning to a pre-FTA world will undoubtedly affect our prosperity, but it is a world we have lived in and survived before,” the report said.

Correction: Perrin Beatty was incorrectly identified as chief executive of the Canadian Chamber of Commerce in an earlier version of the story. He is the former CEO. Candace Laing is the current chief executive.

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Canadian oil prices have been unexpectedly resilient so far this year despite escalating trade tensions with the United States , with the discount on Canada’s benchmark heavy oil, Western Canadian Select (WCS), shrinking last week to its narrowest gap since 2020.

U.S. President Donald Trump’s repeated threats to impose tariffs on Canada since his re-election last November initially put pressure on Canadian crude prices. But since early March, when he exempted Canadian goods covered under the Canada-United-States-Mexico Agreement (CUSMA), and amid fresh U.S. sanctions on rival heavy oil exporter Venezuela, demand for Canadian heavy crude has been particularly strong. — Meghan Potkins, Financial Post

Keep reading here.

 

• U.S. President Donald Trump to unveil reciprocal tariffs on trading partners at 4 p.m. in what he calls “liberation day.”
• Today’s Data: U.S. ADP employment change for March and factory orders for February
  
• Earnings: BlackBerry Ltd., PetSmart LLC

• Here’s a reality check on Trump’s potential ‘Liberation Day’ trade beefs with Canada
• Why Canadian oil is sold to the U.S. at a ‘discount’ and have tariffs made things worse?
• Trump’s tariff threats revive long-dead idea that Canadian auto sector can go it alone

Many beginner investors may be falling for “investment myths,” which can lead to bad financial decisions, limit their ability to grow wealth over time and even discourage them from entering the market. Keep reading here to find out what how to avoid these typical missteps and build wealth.

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Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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• Why these economists think the 'worst is over' for the Canadian dollar

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We continually hear from various levels of government about the latest programs, subsidies and other plans to deal with the housing crisis, but they always target symptoms, not the cause. And the source cause of Canada’s housing issues is straightforward: excess taxation and intense regulation on construction, which limit supply and elevate cost.

We tax and regulate the things we want to discourage: cigarettes, alcohol, gas and surprisingly, housing. In 1980, when I added a 10×10-foot breakfast addition to my 1940s home, a permit cost $25 and took one day. Today, one would be exposed to public hearings, thousands of dollars for architects, lawyers and consultants and a process of a year or more.

Housing in Canada is in crisis because demand has simply outpaced the supply of new homes. Peak housing starts occurred in 1976, when 273,000 new homes were delivered — to a population of some 23.5 million people. Today, with 41.5 million Canadians, we are still below that peak. It is why Canada has the fewest homes per capita in the G7, 25th in the Organization of Economic Co-operation Development (OECD).

Prices rise when demand exceeds supply, . It’s a law of economics. Added to this imbalance is the cost burden of excess taxation and regulation on new home construction, which gets passed on to the buyer or renter.

Today in Toronto, about one third of the cost of all forms of new housing is taxes, fees, levies, etc., from all three levels of government, while purpose-built apartment buildings get an HST exemption. If all these charges on construction were waived, required rental rates would drop by one third, making many stalled residential projects viable and adding new supply at a reduced cost. When new supply is added, the price of older rental stock also drops.

The concept of waiving development fees, taxes and levies on construction has raised the concern of pressure on municipal finances, but this is largely a timing issue. The creation of resultant property tax income streams is more valuable to municipalities than one-time development charges.

By waiving one-time taxes and fees on new housing, we can accelerate construction and expand our property tax base to generate far more tax income than with underdeveloped land. In many countries, municipalities will provide tax increment financing to incent construction to realize the resultant property tax benefit, which continues forever.

In Toronto, it is exactly the opposite: high taxes on construction stall the creation of new housing to everyone’s detriment, putting the focus on one-time fees versus the far greater multi-generational income streams from enhanced property taxes.

Regulations also have a leading role in reducing supply and increasing cost. A typical project takes three or four years from land assembly to construction start, with entitlement costs in the millions and millions more for the delays. All of this adds cost borne by the homebuyer or renter.

The federal election has brought a sharp contrast in approach by the Conservatives and Liberals. The Conservatives have focused on eliminating taxation and addressing regulation to unleash the private sector, which has the scale, skills and capital to execute.

By giving the industry permission to build and reducing the construction cost burden, the private sector will respond with far greater new home supply delivered. This will result in accelerated supply with reduced cost of new incremental housing, which will impact everyone as new supply is delivered at competitive cost, another law of economics.

The Liberals have announced that they intend to get into the development business to build housing. Do we really want the federal government, with its regulatory overburden, becoming a developer? If one looks at the disastrous state of their housing initiatives on our military bases and Indigenous reserves, perhaps the federal government should focus on finishing that promise first.

So, if we want housing that is more affordable, voters need to send a clear message to our politicians. Let’s unleash our world-class development industry, not have the government try to recreate it. Let’s give permission to the thousands of developers across the country to get at it, with a simple three-step course of action:

1. Eliminate all taxes, levies and fees on the construction of all forms of new housing.
2. Overhaul the regulatory process to give permits within six to nine months.
3. Incent builders to build, with the aim of expanding the property tax base.

The good news is that our housing crisis is a result of bad public policy. The better news is that it can be fixed with enlightened policies that unleash Canada’s world-class development industry. Change is needed — now.

• Canada not alone as dissatisfaction with housing costs
• To solve housing affordability, Canada must fix productivity

Jon Love is the executive chair and founder of KingSett Capital.

On April 2, the United States is scheduled to unveil reciprocal tariffs on a wide array of trading partners, including Canada. Dubbed “Liberation Day” by U.S. President Donald Trump , the measures are meant to even things out with those who, in Trump’s eyes, have unfairly taken advantage of the U.S. with tariffs and other non-tariff barriers.

So far, there are conflicting reports of how the tariffs will unfold, with some administration officials publicly indicating they will be rolled out country by country and other reports pointing to the possibility of a flat levy of 20 per cent on products from virtually every country.

Aside from steel, aluminum and autos, which are already facing separate tariffs, here are the issues the U.S. has singled out as problematic in their trade with Canada that could factor in to the Liberation Day announcement, and what economists and trade officials have to say about them.

The trade imbalance

What Trump says: He has been widely disparaging of the trade relationship with Canada, repeatedly lamenting that the U.S. subsidizes Canada to the tune of US$200 billion.

Reality Check: There seems to be little explanation for the US$200 billion subsidy figure — firstly because a trade deficit isn’t a subsidy and secondly because the deficit is only US$100 billion. The imbalance in trade, with Canada exporting more to the United States than we import from them, is mostly due to Canada’s exports of oil, natural gas and electricity. According to Statistics Canada, energy products alone made up one third of Canada’s exports to the United States in 2022. The figures also fail to account for services, the flow of human capital and the myriad other ways our economies are intertwined, to mutual benefit.

Dairy

What Trump says: Canada imposes tariffs on U.S. dairy that are greater than 200 per cent, thereby “ripping off” American farmers. Canada “has been ripping us off for years,” he declared from the Oval Office on March 7.

Reality Check:  While tariffs applied to U.S. dairy imports above a tariff-free quota are indeed 200-per-cent-plus — higher than the U.S. applies for its above-quota volumes — the U.S. does not even export the full amount of tariff-free dairy product to Canada . “To be clear, no U.S. entity pays these high tariffs currently, and it is difficult to see a situation in which one would — they still have existing quota room!” analysts at CIBC Capital Markets said in a March 26 note.

Moreover, they said, the US$1 billion of U.S. dairy exports to Canada annually are “extremely lucrative” for U.S. farmers because Canadian consumers pay much higher prices than those in the U.S. This is the result of Canada’s dairy supply management system, developed more than half a century ago. The system does not prioritize cost-cutting and efficiency since marketing boards pay farmers mainly based on their cost of production plus an inflation adjustment.

In addition, there has been less consolidation in Canadian farming, resulting in higher production costs in Canada. These higher costs are passed onto Canadian consumers of dairy products from both Canada and the U.S. “In a perverse way, Canadian consumers are indirectly subsidizing U.S. dairy farmers,” the CIBC analysts wrote.

Lumber

What Trump says: He has lumped his anger about dairy and lumber tariffs together, threatening to act immediately on unfair treatment by Canada. He also said the U.S. does not need any Canadian lumber.

Reality Check: There is far from enough lumber produced in the U.S. to meet building demand, according to industry groups, which have said about 30 per cent of softwood lumber used in the U.S. comes from Canada. They warned new tariffs would push up building costs and potentially make homes less affordable. What’s more, Canadian producers already pay duties when they export wood to the United States.

According to the National Association of Home Builders, a new tariff on softwood lumber products from Canada would come on top of an effective 14.5 per cent duty rate that is already in place. A 25 per cent tariff, if imposed by Trump, would push the effective Canadian lumber tariff to nearly 40 per cent.

“The lumber piece is particularly egregious given the already punitive and unjustified anti-dumping and anti-subsidy (countervailing) duties in place on Canadian lumber flowing into the United States,” William Pellerin, a partner in the international trade practice at law firm McMillan LLP and former deputy director at Global Affairs Canada, said after Trump’s March 7 threats.

The digital services tax

What Trump says: Tariffs must be levied on Canada in retaliation for digital sales taxes on technology companies whose services are available to Canadian consumers. The U.S. administration says these taxes penalize American companies and appropriate the American tax base. “Only America should be allowed to tax American firms,” Trump said in a White House statement.

Reality Check:  Affected companies such as Google parent Alphabet Inc., Facebook owner Meta Platforms Inc., Apple Inc. and Amazon.com Inc. have lobbied against this type of tax for years, arguing that they should not pay taxes in countries where they don’t have a physical presence. But the list of countries imposing such taxes, which includes France, Britain and several European Union nations, has been growing.

Canada’s digital tax regime went into effect last June, retroactive to 2022. Digital companies that earn more than $1.1 billion worldwide are subject to a three per cent tax on Canadian revenues above $20 million. American companies will pay US$500-million a year in digital sales taxes in Canada, according to the White House. This is seen by some trade experts as a potential bargaining chip for Canada to show it is not unwilling to make some concessions.

• Why Canadian oil is sold to the U.S. at a 'discount'
• Don’t give up on the U.S. market just yet
• Trump goes oh-for-three on trade knowledge

The banking sector

What Trump says: Canada “doesn’t allow American Banks to do business in Canada,” which upsets him because Canadian banks have a large footprint in the United States.

Reality Check:  U.S. banks don’t have a huge presence in Canada, particularly relative to Canada’s six large banks , which dominate most business lines. But they are allowed to set up in Canada and have, indeed, established toeholds here over the years, particularly in investment banking and advisory services. As of February, there were 16 U.S bank subsidiaries and branches operating in Canada, with about $113 billion in assets, representing about half of all foreign bank assets in the country, according to the Canadian Bankers Association.

That said, a combination of strict regulations and the concentration of large domestic players makes it cumbersome and expensive to expand into retail banking in Canada. In order to become a traditional deposit-taking retail bank that can accept deposits of less than $150,000, a U.S. bank has to set up a Canadian subsidiary, which is required to have its own capital and liquidity structure separate from the U.S parent.

By contrast, Canadian banks, such as Bank of Montreal, Toronto-Dominion Bank, and Royal Bank of Canada, can and have purchased billion-dollar U.S. retail banks with extensive branch networks across America.  

• Email: bshecter@nationalpost.com

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Canadian oil prices have been unexpectedly resilient so far this year despite escalating trade tensions with the United States , with the discount on Canada’s benchmark heavy oil, Western Canadian Select (WCS), shrinking last week to its narrowest gap since 2020.

U.S. President Donald Trump’s repeated threats to impose tariffs on Canada since his re-election last November initially put pressure on Canadian crude prices. But since early March, when he exempted Canadian goods covered under the Canada-United-States-Mexico Agreement (CUSMA), and amid fresh U.S. sanctions on rival heavy oil exporter Venezuela, demand for Canadian heavy crude has been particularly strong.

Still, on the eve of Trump’s planned reveal of reciprocal tariffs against its global trading partners, there are still plenty of questions about how U.S. tariffs could impact cross-border energy trade.

Here, we take a closer look at the pricing of Canada’s key benchmark crude and how tariffs are influencing prices for Canada’s largest export product to the U.S.

What is Western Canadian Select?

WCS is the main benchmark crude for Western Canada and the definitive price marker for the heavy barrels produced from the vast oilsands deposits in northern Alberta.

It is considered a heavy, sour crude oil and typically trades at a lower price than light, sweet crude types that are easier and cheaper to refine, such as West Texas Intermediate (WTI).

WCS was launched in the early 2000s by a handful of large oil companies in Western Canada that were trying to sell more heavy barrels to Midwest refineries. At the time, producers were churning out dozens of different streams of crude oil of varying quality.

“They had all these relatively small streams of heavy crude and it was very difficult to market those streams,” Jeff Kralowetz, vice-president of business development for commodity research firm Argus Media Ltd., said.

The producers got together and decided to blend around 20 different grades of conventional heavy oil, synthetic crude and diluted bitumen from the oilsands at the largest oil storage hub in Canada in Hardisty, Alta., he said. The barrel they came up with closely resembles Mexico’s heavy crude benchmark, Maya.

“Which was important because at the time, Mexican Maya crude was one of the main heavy crudes available at the Gulf Coast,” Kralowetz said. “They wanted to compete head-to-head with it, so they created a blend that looked a lot like it.”

Canada’s push for U.S. market share spectacularly paid off. U.S. imports of Canadian crude have doubled since 2009, while imports from Mexico and Venezuela have declined.

C anada now supplies around four million barrels per day to the U.S., roughly half that country’s total crude imports.

Why is the U.S. able to buy Canadian oil at a “discount”?

You’ll often hear federal Conservatives and politicians in Alberta complain that Canadian oil is being sold to the U.S. at a discount, fetching lower returns than it could get on global markets. That isn’t wrong, but it’s not the whole story.

Heavy oil, such as WCS, which also has a high sulphur content, is considered a lower-quality crude and will always trade at a discount to lighter grades since it requires more costly refining and processing to produce valuable end products like gasoline, diesel and jet fuel.

There is, however, a profitable upside for refiners that invest in the necessary upgrades to handle heavy sour crudes since heavy feedstocks are cheaper and can yield a greater range of refined products.

Canada’s barrels are also largely landlocked, with most production being far from North America’s key transport hubs and refineries, and its lower price reflects higher transportation costs and Western Canada’s limited access to global markets.

As a result, WCS trades at a lower price than WTI and that difference is known as the WCS-WTI differential.

There have also been painful periods for the Canadian oilpatch when production has outpaced available pipeline capacity, resulting in oil supply gluts that have cratered prices.

Pipeline bottlenecks in 2018 led to the WCS-WTI differential exploding to more than US$40 per barrel, prompting the Alberta government to impose a curtailment order on production to bolster prices.

On Canada’s side of the border, blowouts in the differential result in a painful contraction of revenues and economic activity, while American refiners enjoy windfall profits as their margins are boosted by dramatically cheaper crude inputs.

Currently, there isn’t a shortage of takeaway capacity in the Canadian oilpatch due to key export pipeline expansions completed in recent years, such as the Enbridge Line 3 replacement project in 2021 and the Trans Mountain pipeline expansion (TMX) in 2024.

Heading into the U.S. election last November, Canadian oil producers were enjoying the novel sensation of having plenty of pipeline capacity and consistently narrower discounts on their barrels coinciding with the start-up of TMX last May.

Canada’s only direct outlet to global markets outside the U.S., the TMX expansion more than doubled non-U.S. oil exports in the second half of 2024.

That has helped shrink the spread between WCS and WTI, which has consistently hovered between US$10 and US$15 per barrel in the months following TMX’s start-up after years of it averaging more than US$18.

“When you only have one buyer, that buyer has a lot of leverage over your price,” Kralowetz said. “The completion of TMX in May was a big step. You automatically had an improvement or a narrowing of the discount.”

How are U.S. tariffs impacting the price of WCS?

Oil market analyst Rory Johnston said the best way to spot the impact of U.S. tariffs on Canadian crude prices is not by looking at the relatively tight WCS-WTI differential, but at the spread between the price of a barrel of WCS in Hardisty, Alta., versus the price WCS fetches once it reaches Houston.

The Hardisty-Houston price gap reflects the transportation costs associated with bringing a barrel of WCS from Alberta to complex refineries on the U.S. Gulf Coast, and it ranged between US$6 and US$8 per barrel in the months before Trump’s election, according to a recent analysis by Johnston in Commodity Context.

Anything in excess of that geography-related differential baseline since the U.S. election can reasonably be chalked up to a tariff-related penalty on Canadian barrels, Johnston said.

The tariff penalty started rising after a newly re-elected Trump began threatening tariffs on Canada and Mexico on social media, Johnston said, and then exploded in January.

“We got the biggest run-up initially following Alberta Premier Daniel Smith’s visit to Mar-a-Lago the week before inauguration, when she came out and basically said, ‘Guys, (tariffs) are happening and crude is not going to get exempted,'” Johnston said, noting the WCS Hardisty-Houston differential reached US$12.40 per barrel at market close on Jan. 31, nearly US$5 per barrel in excess of the pre-election baseline. “At that stage, the market was essentially pricing the risk of a 25 per cent tariff.”

But Trump’s subsequent decision to reduce tariffs on Canadian crude to 10 per cent, as well as his postponements and vacillations over the implementation of tariffs since then, has recently led to a collapse in the tariff penalty as markets seem to largely be discounting the risk of tariffs being applied to Canadian crude at all.

“After that (CUSMA) exemption a couple weeks ago, that’s when the market really started to just discount the risk of tariffs on Canadian crude in total, so now we’re basically at almost zero risk,” Johnston said.

The overall WCS-WTI discount fell below US$10 a barrel last week, the narrowest margin since 2020.

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Markets may be reflecting a belief that Canadian oil exports, so deeply integrated into the U.S. economy, are likely to continue to be exempt from tariffs, Johnston said.

But that may be an overcorrection, he added, given the current state of tensions between Canada and the U.S. and Trump’s looming reciprocal tariffs.

“I would personally say the risk remains higher than zero per cent,” he said. “But it also confirms this initial prior thought everyone had going into this that maybe Trump will tariff lumber or autos or something, but he’s not going to tariff crude. That’s crazy.”

• Email: mpotkins@postmedia.com
X: @mpotkins

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A bipartisan group of U.S. Senate lawmakers are set to vote on a resolution to challenge U.S. President Donald Trump’ s national security justification for tariffs against Canada .

“The president has justified the imposition of these tariffs on, in my view, a made-up emergency,” said Democratic U.S. Sen. Tim Kaine, to reporters in Washington. “The emergency is being invented to do the tariffs, to do the taxes on everyday Americans. Why? So, they can use the tariff revenue to give a tax cut to billionaires.”

On Feb. 1, Trump justified the 25 per-cent tariff on Canadian goods and the 10 per-cent tariff on Canadian energy, based on the International Emergency Economic Powers Act (IEEPA), which authorizes the president to regulate imports during a national emergency under the National Emergencies Act. The White House’s rationale is the flow of fentanyl crossing the Canadian border meets that threshold.

During the 2024 fiscal year, U.S. Customs and Border Protection seized 43 pounds of fentanyl in the Northern border area compared to 21,900 pounds at all U.S. border areas.

Kaine, who is from Virginia, said the resolution aims to “turn off” the Canadian emergency declared by Trump, with the vote set to happen either Tuesday or Wednesday. The resolution is co-sponsored by U.S. Sen. Amy Klobuchar from Minnesota and U.S. Sen. Rand Paul, a Republican from Kentucky.

The resolution requires votes from all Democratic senators and four Republican senators to pass. U.S. Sen. Susan Collins from Maine told reporters on Monday she plans to back the resolution. Collins has previously expressed her concern over tariffs, pointing to the level of integration between Maine and Canada’s economies.

“Republicans aren’t willing to stand up to the president,” said Kaine. “They’ve said they’re concerned about tariffs, OK fine, you’re concerned now we’re giving you a vote.”

U.S. Sen. Mark Warner said they are asking “four republican senators to actually go on record what they have all said privately.”

Some republican lawmakers have publicly voiced concerns about tariffs and the impact they have on their constituents, they include U.S. Sen. Charles Grassley from Iowa, U.S. Sen. Jerry Moran from Kansas and U.S. Sen. Mitch McConnell from Kentucky.

On Tuesday, Trump urged Republican senators to vote against the resolution.

“We are making progress to end this terrible fentanyl crisis, but Republicans in the senate MUST vote to keep the national emergency in place, so we can finish the job, and end the scourge,” he said, in a social media post.

If the resolution passes, it would then be sent to the U.S. congress, which holds a Republican majority. Trump also has the power to veto the bill, but Kaine said a bipartisan vote might convince the White House to rethink its tariff strategy.

Trump is set to impose country-by-country reciprocal tariffs on Wednesday to roll back what he views as “unfair trade practices.” Canada and several countries have promised to retaliate with their own countermeasures.

• Trump’s April 2 tariffs to take immediate effect
• U.S. automakers to push Trump to temper tariffs

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• Email: jgowling@postmedia.com

The president will announce the new duties at 4 p.m. Wednesday