Ontario could lose more than 68K jobs due to U.S. tariffs this year, a new report finds

The Peace Bridge at the Canada-US border in Fort Erie, Ontario, Canada. (Laura Proctor/Bloomberg)

Ontario could be headed toward a “modest recession” this year largely as a result of U.S. tariffs, with thousands of job losses anticipated, according to a new report.

The Financial Accountability Office of Ontario (FAO) report published Wednesday foresees U.S. tariffs would lead to 68,100 fewer jobs in the province this year compared “to the no tariff scenario.” That number nearly doubles for 2026, at 119,200 fewer jobs, and trails up to 137,900 job losses by 2029.

The report analyzes the differences between tariff and no-tariff scenario between the North American countries, based on their trade actions as of April 17.

“The actual impact of tariffs on Ontario’s economy is uncertain and will depend on the magnitude and breadth of tariff coverage as well as how businesses, households and economies respond,” Jeffrey Novak, the province’s FAO officer, said at a news conference on Wednesday morning.

“If tariffs are lowered, the negative impacts to Ontario’s economy will be more modest, however, if the U.S. imposes more or higher tariffs, Ontario could experience a deeper recession.”

The FAO breaks down two potential scenarios, looking into the range of economic impacts for Ontario. It’s a “low impact scenario,” assuming all existing tariffs from both Canada and the U.S. are cut to 10 per cent and trade volumes are more resilient, estimates the province’s GDP will be at 1.3 per cent this year and 1.6 per cent in 2026, meaning Ontario will stave off a recession.

Meanwhile, the “high impact scenario,” which assumes the U.S. introduces more duties on copper, lumber, semiconductors and pharmaceuticals, as well as increased tariffs on steel, aluminum and automobiles, says Canada ramps up its retaliatory measures, Ontario’s real GDP could decline by 0.5 per cent in 2025 and grow by 0.6 per cent the following year, pushing the province into a deeper recession.

As the levies imposed by President Donald Trump’s government currently stand, the tariffs are also expected to raise the province’s unemployment rate by 1.1 percentage points over the course of four years, averaging at 7.7 per cent until 2029.

Looking at unemployment rates at a molecular level, the report authors note manufacturing will likely be hit the hardest, with 57,000 fewer jobs next year.

They also point out that while all Ontarian cities would be “negatively” affected by U.S. duties, Windsor will be hit the hardest, with employment rates 1.6 per cent lower in 2026. Trailing behind the automotive capital of Canada comes Guelph, Brantford, the Waterloo Region and London.

In response to the FAO’s findings, Ontario Premier Doug Ford said to wait and “see what happens,” pointing to how the province has been working on creating more jobs.

“I’m confident, I really am. I look at the glass as half full, and no one can predict the future, but I’m predicting we’re going to do better than other jurisdictions around the world, around North America,” Ford said at an unrelated news conference on Wednesday.