The headlines coming out of Washington certainly sound alarming. The U.S. has now imposed a 50% tariff on roughly $28 billion of Canadian goods, and Canada has responded with matching tariffs. For the companies and workers directly affected, this is unquestionably painful.

But it is important to put the number into perspective. The 50% tariff does not apply to everything Canada sells to the United States. Most CUSMA-compliant trade continues to move tariff-free. Even before this latest announcement, the Bank of Canada estimated that industries directly facing the major sectoral tariffs represented only about 1% of Canadian economic output and employment.

In other words, this is a meaningful economic headwind, but it isn't enough on its own to derail the Canadian economy.

Source: U.S. Census Bureau, RBC Economics

More importantly, Canada has an opportunity to turn some of this pressure into something positive.
For decades, one of Canada's biggest economic problems hasn't been a lack of resources, capital, or opportunity, it has been our inability to actually get major projects built. The federal Major Projects Office now has 18 projects and 9 broader strategies representing approximately $192 billion of new investment, with the potential to unlock roughly $500 billion of future private investment. These include LNG, pipelines, ports, critical minerals, nuclear power, hydroelectricity, transportation corridors, and other major infrastructure.

If there was ever a reason to accelerate these projects, this is it. We cannot control U.S. trade policy. What we can control is whether we build the infrastructure required to sell Canadian energy, minerals, and other resources to the rest of the world.

The tariffs are a problem. But if they finally provide the political urgency required to get hundreds of billions of dollars of Canadian projects built, they could also become a catalyst for something Canada has needed for a very long time.

Sometimes it takes a crisis to turn talk into action.

I have also included some tariff commentary from CIBC’s Global Asset Management team.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great weekend.

Milan