A trade war between the United States and Canada is raising concerns about rising prices on everything from groceries, to vehicles, to houses, leaving many worried about how their household budgets will be impacted.
Kamla Khan was out buying groceries in Ottawa on Tuesday.
She has always been careful with her spending, but she’s now bracing for a bigger hit to her wallet.
“I live on a fixed income, so I worry about the price increase too,” she said. “I have to pay extra on my heating bill, my groceries… I shop specials all the time.”
The U.S. imposed sweeping tariffs on Canadian goods on Tuesday, prompting Canada to respond with retaliatory measures. Experts say the ripple effects could be felt across multiple industries, with price hikes expected in the coming weeks and months.
The Canadian government quickly retaliated with a tariff plan of its own, to be rolled out in two phases.
“The longer this lasts, it’s going to have a more prolonged impact,” said Pedro Antunes, chief economist with the Conference Board of Canada.
“Some of these companies will not be able to come back. They will not be viable coming back.”
New vehicle prices in the U.S. are projected to rise by as much as $12,000 because of the tariffs. While it remains unclear how much prices could climb in Canada, industry leaders say higher costs are likely.
“Until those manufacturers announce to retailers and consumers if they’re going to just absorb that cost or if they’re going to pass it on, we really have to wait and see,” said Sean Gibson, president of the Ottawa New Car Dealers Association.
Under the threat of tariffs, Gibson says dealerships stocked up on inventory, but some consumers are already pumping the breaks.
“My car lease is coming up, and originally I was thinking about doing another lease,” one shopper said. “But now I might just buy it out.”
The Ontario Home Builders’ Association is also warning the tariffs will drive up costs for homebuyers, stall new projects, and worsen the housing supply crisis.
“We’ll see the impacts relatively quickly,” said Scott Andison, CEO of the association. “We’re just disappointed because housing is such a priority, north and south of the border, and this is going to have a negative effect on everyone involved.”
In response to Canada’s counter measures, Trump has vowed to match any retaliatory tariffs Prime Minister Justin Trudeau puts in place.
Canadian Labour Congress President Bea Bruske said in an interview with CTV News Channel that Canada could lose 1.5 million jobs in the first 12 months of a trade war if it continues.
With files from CTV News Channel
