It was just supposed to simplify administration. Instead Donald Trump’s tweak to metal tariffs last month has extended the reach of his punishing penalties from a single sector to much of Canada’s manufacturing heart.

Previously the United States applied a 50 per cent tariff to the percentage of steel, aluminum and copper content within a product, but U.S. importers complained that this was too complicated.

Now rather than calculate the value of the metal content, a 25 per cent tariff is applied to the whole product, which raises the cost of the export substantially.

The change that took effect April 6 has “flown under the radar,” said Desjardins Group economists led by Hendrix Vachon, because of the conflict in Iran and other political news. But on Monday Ottawa acknowledged the blow with a $1.5 billion aid package for affected manufacturers.

The federal government is putting $500 million to the existing Regional Tariff Response Initiative, which provides grants for smaller manufacturers, and $1 billion for financing through the Business Development Bank of Canada.

Already companies are reeling under the impact of the change, especially in Canada’s manufacturing heartland of Ontario and Quebec. Manitoba, which exports several metal products to the U.S., will also be affected.

The changes are particularly painful for companies that make high value-added products, said Desjardins. Before a product worth $10,000 that was 20 per cent metal was subject to a $1,000 tariff; under the changes the tariff jumps to $2,500.

Ski-Doo maker BRP Inc. is one such example. In April it withdrew its financial outlook for the fiscal year of 2027, saying the tariff change would cost it $500 million. Since then its shares have dropped 30 per cent.

The change has broadened the scope of the tariff from the metals themselves to a wide range of products. In Quebec’s case, Desjardins estimates a quarter of the province’s exports are now subject to sector-specific tariffs.

As a result Quebec’s effective tariff rate has jumped 1.4 percentage points to 9 per cent, double the Canadian average of 4.2 per cent. Ontario’s rate has climbed to 6.7 per cent.

The extra burden comes to provinces already struggling under Trump’s tariff regime. In Quebec, a province highly dependent on trade with the U.S., exports to the south have fallen in a range of products from primary metals to light trucks and buses.

Exports from Ontario have dropped even more, especially in the auto sector which in 2025 accounted for a quarter of the province’s shipments to the U.S. Passenger vehicle exports are down over 46 per cent, and rolled steel products have dropped more than 60 per cent.

Southwestern Ontario and the regions of Chaudière‑Appalaches and Centre‑du‑Québec in Quebec will be hit the hardest. About 170,000 people work in Quebec industries affected by the tariff change, about 300,000 in Ontario.

Desjardins says the change also threatens to erode the efficiency of the Canada-U.S.-Mexico Agreement. None of the countries so far able to reach a trade deal with the U.S. have managed a full exemption from sector-specific tariffs. For Canada and Mexico to secure them would require major concessions.

Though the economists don’t think this new tariff shock will majorly weaken the Canadian economy as a whole, it could prolong the country’s slowdown and make it vulnerable to shocks, such as higher oil prices and financial market volatility.

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Cash may not be king any more, but it’s a long way from becoming extinct.

While the use of cashless payments continues to rise globally, “cash in circulation has largely stabilized, underscoring the enduring relevance of cash in economies,” said a recent report from the Bank for International Settlements (BIS).

Cash remains about six per cent of GDP in emerging economies and has declined slightly to about nine per cent in advanced economies, but jurisdictions vary.

Japan has the most cash in circulation at 21 per cent of GDP, followed by Hong Kong at 19 per cent. The lowest is in Sweden where cash in circulation is less than a percentage point of GDP.

  • Energy Minister Tim Hodgson takes part in a fireside chat with Fatih Birol, executive director of the International Energy Agency, in Ottawa.
  • Today’s Data: Canada international merchandise trade, United States trade balance and new home sales
  • Earnings: Paypal Holdings Inc., Pfizer Inc., KKR & Co. Inc.
  • How Carney’s new sovereign wealth fund could backfire on the economy
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  • Garry Marr: Are young FHSA savers about to get duped again?

If you have a First Home Savings Account (FHSA), the question these days is whether the gains you could make in the housing market match the gains you have been making in the stock market.

First-time buyers have been burnt before in recent years, when they took money out of their registered retirement savings plans (RRSPs) through the Home Buyers’ Plan only to see housing values fall and stocks rise.

Financial Post columnist Garry Marr takes a look at the dilemma of whether a home should be considered an investment.

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Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com .

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