By Canadian Press

Despite tariff pause, uncertainty hangs over Canadian economy

Feb 4, 2025 | 2:01 AM

OTTAWA — Uncertainty still hangs over the Canadian economy despite U.S. President Donald Trump announcing a 30-day pause in tariffs that were to take effect today.

The temporary reprieve halts — at least for now — a continental trade war that economists on both sides of the border warned would raise prices.

Trump’s decision meant Canada and the provinces also halted their moves to retaliate including with tariffs and bans on U.S. alcohol sales north of the border.

Trump on Saturday signed an order to impose 25 per cent across-the-board tariffs on Mexican and Canadian imports, with a lower 10 per cent tariff on Canadian energy.

On Monday, following two phone calls with Prime Minister Justin Trudeau, Trump said the tariffs would be off the table for 30 days to see if the two countries could reach a “final economic deal.”

In his own social media post, Trudeau outlined his government’s $1.3 billion plan to address Trump’s stated concerns about border security that Canada unveiled in December.

He also said nearly 10,000 front-line personnel “are and will” be protecting Canada’s border, and announced $200 million in new initiatives to address fentanyl trafficking including a “fentanyl czar.”

Some of the border measures will be on display today.

Public Safety Minister David McGuinty and Terry Duguid, minister responsible for Prairies Economic Development Canada, will join Manitoba Premier Wab Kinew later this morning at the Emerson port of entry, where they’ll see how the Canada Border Services Agency detects fentanyl and other toxic materials. They’ll also see a Black Hawk helicopter which the RCMP is now using to patrol the U.S. border in the province.

But the tariffs delay is not a long-term comfort for many in Canada’s labour and business communities.

Unifor, the country’s largest private sector union, insists that Trump’s threat of tariffs remains in effect, threatening Canadian jobs. National President Lana Payne calls for Canada to “use every single available lever to build a strong, resilient, and diverse economy.”

The Business Council of Canada also notes that “with a 30-day delay, much uncertainty remains.”

President and CEO Goldy Hyder said it remains clear that Canada must “act with urgency to improve our long-term economic prospects.”

Quebec Premier François Legault complained that “what’s annoying” about dealing with Trump “is that there’s always this sword hanging over our heads.”

He believes the events of the last few days emphasize the importance of diversifying markets and limiting Canadian dependence on American exports.

Canada has spent the last three months on a full-court press in Washington, D.C. and Mar-a-Lago, Trump’s Florida resort, trying to push its case against tariffs. Despite the pause, that work continues.

Energy and Natural Resources Minister Jonathan Wilkinson will be in Washington today to deliver a speech on the future of energy in North America.

This report by The Canadian Press was first published Feb. 4, 2025.

Michel Saba, The Canadian Press

<!– Photo: 74f55ce97684218e076098d11f01177b7b08545f2e6b49f1210fd48611b968cb.jpg, Caption:

Prime Minister Justin Trudeau addresses media following the imposition of a raft of tariffs by U.S. President Donald Trump against Canada, Mexico and China, in Ottawa, Saturday, Feb. 1, 2025. Minister of Public Safety David McGuinty, left to right, Global Affairs Minister Melanie Joly and Minister of Governmental Affairs Dominic LeBlanc look on. THE CANADIAN PRESS/Justin Tang

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