A new report from the Financial Accountability Office of Ontario (FAO) warns that Ontario could face a loss of more than 68,000 jobs this year due to rising U.S. tariffs, with the economic impact potentially worsening in the years ahead if trade tensions continue to escalate.
The FAO estimates that 68,100 jobs could be lost in 2025 alone under current tariff policies, with the figure rising to 119,200 by 2026, and 137,900 by 2029, compared to a no-tariff scenario. The report warns that the province could be heading into a “modest recession”, especially if the United States imposes additional duties on key sectors such as automobiles, steel, aluminum, copper, semiconductors, and pharmaceuticals.
Jeffrey Novak, Ontario’s Financial Accountability Officer, emphasized the uncertain scope of the impact. “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,” Novak said during a press briefing.
Two Scenarios: Recession or Recovery
The report outlines two possible paths for Ontario’s economy:
- In a low-impact scenario where tariffs are limited to 10% and trade remains relatively resilient, Ontario’s real GDP is projected to grow by 1.3% in 2025 and 1.6% in 2026, avoiding a recession.
- In a high-impact scenario, where U.S. tariffs expand and Canada retaliates, Ontario’s GDP could shrink by 0.5% this year and see only modest growth of 0.6% in 2026, effectively pushing the province into a deeper recession.
The FAO also projects a rise in unemployment across the province, with the jobless rate averaging 7.7% through 2029—up 1.1 percentage points due to trade-related job losses.
Ontario’s manufacturing sector is expected to absorb the brunt of the job losses, with 57,000 positions at risk by 2026. Cities most affected include Windsor, projected to see employment rates 1.6% lower in 2026, followed by Guelph, Brantford, the Waterloo Region, and London—all significant manufacturing hubs.
In response to the report, Premier Doug Ford urged caution and optimism. “I’m confident, I really am. I look at the glass as half full,” he said at a press conference Wednesday. While acknowledging the risks, Ford pointed to ongoing provincial efforts to attract investment and grow the job market, suggesting Ontario would weather the storm better than most.
“No one can predict the future, but I’m predicting we’re going to do better than other jurisdictions around the world,” Ford added.
As global trade dynamics remain volatile under U.S. President Donald Trump’s tariff-heavy economic strategy, Ontario’s economic outlook now hinges on how far trade disputes escalate—and whether retaliatory measures can be avoided.