Canada had accumulated over $3 billion from U.S. counter-tariffs before eliminating a significant portion of the duties in September, as reported by the Finance Department. This amount falls short of the $20 billion projected to be generated from retaliatory levies on U.S. goods in the current fiscal year, as outlined in the Liberals’ election platform. Prime Minister Mark Carney opted to remove a majority of CUSMA-compliant imports in a bid to progress trade negotiations with the U.S.
The upcoming budget release by the Liberals is anticipated to reveal a larger deficit compared to the previous fiscal update. Carney justified the tariff removal last week, citing the diminishing value of retaliations, noting that Canada was among the few nations with such tariffs on the U.S. He acknowledged the domestic costs of tariffs and emphasized the need to minimize these impacts over time.
Finance Minister François-Philippe Champagne highlighted the necessity to adjust to the removal of a significant portion of counter-tariffs and reiterated the government’s commitment to supporting Canadian industries. Bill Robson, President and CEO of the C.D. Howe Institute, cautioned against heavy reliance on tariffs for revenue due to their potential negative effects on the economy.
The Finance Department clarified that the $3 billion collected did not include redistributed amounts to affected sectors. The government had implemented a relief program for certain goods in April, which was still active when most tariffs were lifted in September. President of the Canadian Steel Producers Association, Catherine Cobden, expressed no surprise at the revenue figure due to granted exemptions, with the government continuing retaliatory tariffs on specific sectors while issuing more exemptions recently.
Cobden urged the government to prioritize exemptions for products not domestically produced and criticized the remission process for lacking effectiveness in revenue collection. Champagne defended the exemptions, emphasizing the careful consideration in granting them. Further details on tariff revenue collection will be disclosed in the upcoming budget release.
