The impact of tariffs on your household budget: What Canadian consumers need to know

Personal finance contributor Christopher Liew discusses using free tools to track tariff changes and shares practical budgeting tips to help you manage potential cost increases. (Getty Images / Valerii Evlakhov)

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Rising tariffs don’t just affect businesses. They can also trickle down and drive up the pricing of everyday items like groceries and household goods. As tariffs change, certain items may become more expensive, and it’s important to make adjustments to your budget to account for this.

Below, I’ll walk through how to use free tools to track tariff changes and explain how to interpret the results for items you frequently buy. I’ll also share some practical budgeting tips to help you manage potential cost increases.

How do tariffs affect prices?

Tariffs are essentially shipping taxes imposed by a government on imported goods from other countries.

Canadian companies importing foreign goods are responsible for paying the tariff costs to the Canada Border Services Agency (CBSA) before their goods can be released from customs. In some cases, shipping carriers may accept pre-payment for tariffs and pass it on to the CBSA.

While the importer pays the tariff, they usually pass this cost on to the customer, who ultimately bears the economic burden with a higher price tag.

Export tariffs can also affect Canadian businesses and their employees.

For example, the U.S. increasing tariffs on Canadian imports makes it costlier for American companies to buy Canadian goods. This, in turn, can result in lower sales as foreign companies explore options from countries with lower import tariffs. With weakened demand for Canadian products, some producers may be forced to cut their labour force.

Keeping track of tariff changes through various foreign customs authorities can be a headache.

To help consumers, the CBSA recommends using Canada Tariff Finder to make it easier to track changes. (Scroll to the bottom of this article for a step-by-step guide on how to best use the tracker.)

Figuring out your price impact

In addition to tariffs, retailers change their prices based on shipping, exchange rates, and their own margins, which can make it difficult to figure out exactly how the tariffs will affect the price you pay.

There are a few simple tricks you can use to get a better idea, though.

Estimate pass-through costs

Tariffs apply to the “landed cost” of goods (the price when they arrive in Canada, before retail markup). For example, if a $100 item has a 10 per cent tariff, the importer pays an extra $10.

In practice, retailers may pass on part (or all) of that cost to consumers. An analytical note from the Bank of Canada suggests that pass-through costs are highest in food stores and tend to be lower for other consumer goods.

Watch for recent changes

The Canada Tariff Finder tool often shows whether a tariff will decrease or increase in future years. If you know a product’s tariff is scheduled to rise, you might want to purchase it sooner. Conversely, if reductions are coming, waiting could save you money.

Use simple comparisons

When comparing items from different countries, look at the tariff rate difference. For example, if coffee makers from one country carry a 10 per cent tariff while those from another carry 5 per cent, choosing the zero-tariff source can help lower costs over time.

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Budgeting for tariff increases

Even small changes in tariffs can add up when they affect the things you buy regularly.

Start by listing the everyday items you purchase that are most likely to be affected, such as clothing, small appliances, or imported foods. Keep a shortlist of these categories and track them with the Canada Tariff Finder a few times a year. You should also set aside extra in your monthly grocery and household budget to account for price changes.

With rising tariffs, it’s more important than ever to take advantage of loyalty programs, cashback rewards, and shopping smart by buying in wholesale, using coupons, or switching to cheaper off-brands.

Final thoughts

While tariffs and their effects on the economy are largely out of our control, consumers can prepare for tariff-driven cost increases by monitoring changes and applying simple budgeting strategies. Adding a small buffer to your budget, substituting products, or timing purchases around scheduled tariff changes can keep you from burning a hole in your wallet.

• More opinions and expert analyses on CTVNews.ca

How to use the tariff tracker to track everyday items

The Canada Tariff Finder makes it easier to track tariff changes through various foreign custom authorities. It allows consumers and businesses alike to look up tariff rates on specific products by country, compare across markets, and even view scheduled changes over time.

Here’s a quick guide on how to use it to help you track changes to everyday items.

Step 1: select your direction and partner country

First, start by choosing whether you want to look at items imported to Canada or exported from Canada. Next, select the country you want to compare against, such as the United States, Mexico, or Vietnam.

Step 2: search by product name or HS code

If you know the technical “HS code,” you can enter it directly. Alternatively, you can search by the product’s keyword by typing in something like “cotton T-shirt,” “coffee,” or “microwave.” The tool will then generate suggested matches to refine your search.

Step 3: review the tariff results

The following results page shows the current tariff rate, whether that rate changes in the future, and if it differs between Most Favoured Nation (MFN) rates and preferential Free Trade Agreement (FTA) rates. Some products also include graphs showing rate changes over several years.

Step 4: Compare items or countries

You can compare up to three products or trading partners at a time. For example, this feature can be helpful if you want to see whether tariffs are higher on imports from Vietnam compared to the U.S.

Step 5: Save and track your findings

Canada Tariff Finder allows users to print or email results. For everyday use, you could create a simple spreadsheet with your most commonly purchased items, their tariff rates, and any scheduled changes. Updating this list every few months can help you stay ahead of cost increases.

More from Christopher Liew:

• How to avoid the silent credit card debt spiral
• Smart moves for single seniors who are about to retire
• Why so many young Canadians can’t find jobs
• How to deal with financial stress if you’re deep in debt