The chief economist of the province’s largest financial institution says tariffs applied to Canadian products by the United States will likely stay in effect until the American economy sees substantial pain like inflation and job losses.
In the meantime, Mark Parsons of ATB Financial predicts the Bank of Canada will try to prevent a recession.
“We see the Bank of Canada moving lower on interest rates,” Parsons told CTV News Edmonton on Tuesday. “That’s good news for borrowers, but it’s bad news for consumers.”
U.S. President Donald Trump on Tuesday imposed 25 per cent across-the-board tariffs on Canadian products and a 10-per-cent levy on energy.
In response, the federal government announced immediate 25 per cent retaliatory tariffs on $30 billion worth of American products. Ottawa promised to expand them to cover another $125 billion in U.S. goods in 21 days.
Parsons said consumers can expect prices “of a lot of products” to rise because of Canada’s counter-tariffs on U.S. goods.
That means groceries and basically any item Canadians buy will rise in price except for gasoline because Canada is a producer.
“The refineries are going to have their margins squeezed,” Parsons said. “They can pass on that cost to the U.S. consumer, so it’s actually the U.S. consumer that’s going to feel it at the pump.”
Overall, Parsons says Canadians should stay calm and see how their lives are impacted before making any rash financial decisions.
“I think, unfortunately, we’re in a situation where we need to see what these tariffs do to the U.S. economy and the Canadian economy before big changes are made,” he said.
“I think we’re in that situation right now, but I think we just have to go about trying to make positive changes to businesses, improve our productivity, get our products to other markets and see what we can do here at home.”
With files from CTV News Edmonton’s Jeremy Thompson
