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The United States Department of Commerce is set to hike duties on Canadian softwood lumber to 34 per cent this fall, the latest blow in a dispute with Canada that goes back decades.

“We’re going to need some support measures put in place to help us weather this storm,” Kurt Niquidet, president of the BC Lumber Trade Council and chief economist at the BC Council of Forest Industries, said. “There’s going to be some financial liquidity issues for companies, so the federal government needs to step up and provide some loan support to help us get through this.”

Last Friday, the U.S. Department of Commerce announced its decision to more than double countervailing duties on imports of Canadian softwood lumber to 14.38 per cent from 6.74 per cent. This is in addition to its decision in early March to raise the preliminary rate on anti-dumping duties to 20.07 per cent from 7.66 per cent, bringing the total to 34.45 per cent.

“It’s obviously very concerning,” Ian Dunn, chief executive at the Ontario Forest Industries Association, said. “Even under the existing trade environment, with the duties that we’ve seen historically, we’ve seen companies curtail operations, we’ve seen companies close mills, reductions of shifts and layoffs.”

Existing U.S. duties have already had an impact on the Canadian lumber industry. Vancouver-based Canfor Corp. in September announced the closure of its sawmills in Vanderhoof and Fort St. John, British Columbia, citing an increasingly difficult regulatory environment, high operating costs and “punitive” U.S. tariffs. The decision affected 500 workers.

Dunn said the lumber dispute between Canada and the U.S. is now in its fifth iteration. The 2006 Canada-United States Softwood Lumber Agreement was in place until 2015, and the Canadian industry has been subject to duties since 2017.

The U.S. contends the Canadian lumber industry has unfair competitive advantages and is subsidized because most companies operate on land owned by the provinces and the stumpage fees — the fees companies pay to harvest trees — are too low.

Dunn said Canada continues to dispute this argument in cases and panels at the World Trade Organization (WTO) and the Canada-United States-Mexico-Agreement (CUSMA) , but the WTO’s decisions in favour of Canada are not binding and efforts under CUSMA remain unsuccessful.

“We’ve had a long and sustained legal effort contesting and appealing virtually every decision by the Department of Commerce, with little to no effect,” Dunn said. “Because the Department of Commerce’s mandate is essentially to protect the domestic industry, they will find dumping when it doesn’t exist, they will find subsidy when the Americans are doing the exact same practices.”

Mark Warner, principal counsel at MAAW Law, said the dispute with the Americans has been happening since Ronald Reagan’s administration and he sees little possibility of a resolution.

“I don’t think this dispute is capable of being resolved,” he said. “I don’t think you’re ever going to see a situation where American governments are going to accept the stumpage fees.”

U.S. President Donald Trump has launched an investigation into timber and lumber products from several countries based on national security grounds. He has also threatened further tariffs on Canadian lumber and has signed an executive order that calls for an increase of domestic timber production on U.S. federal land.

The National Association of Home Builders (NAHB), one of the largest trade organizations representing the interests of home builders in the U.S., said it is against further tariffs on Canadian lumber.

“NAHB will continue to urge the White House to roll back tariffs on lumber and other building materials and remains focused on improving building material supply chains and easing costs for our members,” it said in a statement issued on Tuesday.

Niquidet said Canadian softwood lumber makes up 24 per cent of the U.S. market share, which will be hard for that country to replace.

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“The U.S. will still need to import lumber from Canada,” he said. “There is just no way that they can replace 24 per cent of the market; it’s going to take them several years.”

Niquidet added the new duties will lead to price increases in the U.S.

• Email: jgowling@postmedia.com

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Analysts are warning investors to watch out for “dead cat bounces” as markets are pulled up and down by the ever-shifting tariff plans of the United States.

“Vicious bear market rallies are the order of the day. They are referred to as ‘dead cat bounces,'” David Rosenberg , founder of Rosenberg Research & Associates Inc. , said in a note on Tuesday. “There are grounds to believe that the lows are in right now, but those odds are rather slim — just enough to dip two toes into the market, but not two feet.”

Dead cat bounces occur when a market temporarily reverses course from a consistent decline or a bear market, only to continue on a downtrend. For example, markets on Wall Street and in Toronto rose earlier this week, but those gains were completely wiped out by the end of the day, continuing the fall into correction territory on the heels of U.S. President Donald Trump announcing reciprocal tariffs on countries around the world.

Trump gave the markets breathing room Wednesday when he announced a 90-day pause on higher reciprocal tariffs, while raising the levy against imports the the U.S. from China to 125 per cent. Countries, excluding Canada and Mexico, will be taxed at a baseline rate of 10 per cent.

“After markets successfully put the administration on notice, the announced ‘pause’ seems likely to be extended beyond 90 days,” Karl Schamotta, chief market strategist at Corpay Currency Research, said in a note on Thursday. “But investors can’t breathe easy: a 10-per cent tariff still represents a major hit to the global economy and American households, and persistently-elevated uncertainty is likely to drag on growth for a prolonged period of time.”

Should investor euphoria from Thursday start to fade, Rosenberg said the trick going forward will be to figure out when markets have hit a “fundamental low” with “a real catalyst behind them.”

“Markets, at the end of the day, don’t like uncertainty. There’s just so much uncertainty right now,” Rebecca Teltscher, a portfolio manager at Newhaven Asset Management Inc., said in an interview with the Financial Post’s Larysa Harapyn.

For now, Teltscher said her company is staying conservative by buying names it already owns, but “we’re not going to try to speculate on a market that is still very uncertain.”

JPMorgan Chase & Co. ‘s global equity strategy analysts also warned this is a tricky time for investors since the odds of a “tactical squeeze are high.”

A tactical squeeze occurs when the price of a stock suddenly rises, forcing short sellers, who bet against the stock, to purchase more of the stock, which then lifts its price.

More broadly, JPMorgan analysts warned that the market’s fate lies with one person “who can unilaterally ease or deepen this shock — the range of outcomes for risk assets globally is abnormally wide and binary.”

As of Tuesday, JPMorgan was calling for the U.S. to fall into a recession in 2025

Given the uncertainty around where tariffs are headed, its analysts laid out three tariff and market scenarios for the S&P 500.

In their bear case, they estimate full tariffs will result in the S&P 500 falling to around 4,000, about 1,000 points off Tuesday’s close. Their base case of partial tariffs calls for the S&P 500 to close out the year at 5,200, while their bull case calls for 5,800.

“Looking further out, the range of outcomes remains very wide and highly dependent on trade policy direction ,” the analysts said.

 

 

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Canadian frackers and oilfield service companies are enduring a bruising spring breakup, clobbered by a one-two punch of cost inflation caused by Ottawa’s retaliatory tariffs against the United States and oil prices seemingly in free fall.

Oil prices have sharply fallen in response to U.S. President Donald Trump ‘s tariff policy and in the wake of larger-than-expected output hikes from the Organization of Petroleum Exporting Countries and its allies. — Meghan Potkins, Financial Post

Read the full story here.

 

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This Alberta-based woman has been happily retired for the last three years, but at 69, she wants to make sure her retirement savings will last and potentially fund a retirement home until her death. Keep reading here to find out if she has enough money to make her plan a reality.

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

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Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

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

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• Posthaste: Americans scramble to stock up before tariffs jack up prices
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Retaliatory Canadian tariffs on U.S. auto imports will go into effect Wednesday at 12:01 a.m. ET, Ottawa has announced.

The measures slap a 25 per cent levy on all non- CUSMA compliant autos imported into Canada from the U.S., plus 25 per cent on the U.S.-made content of CUSMA-compliant vehicles.

Prime Minister Mark Carney had announced the measures on April 3, the same day 25 per cent U.S. tariffs on Canadian vehicles came into effect and a day after U.S. President Donald Trump imposed sweeping “reciprocal” tariffs on America’s trading partners.

The Canadian measures will not hit the Canadian and Mexican made components of completed vehicles, nor will they affect auto parts. A separate U.S. measure targeting Canadian auto parts is due to go into effect on May 3.

“Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products,” Finance Minister François-Philippe Champagne said in a media release Tuesday.

“The government is firmly committed to getting these U.S. tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy and industry.”

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Details of a remission framework to direct proceeds of the tariffs to support the auto industry and affected worker would be forthcoming, the Department of Finance statement said.

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Canada breathed a sigh of relief last week when United States President Donald Trump refrained from imposing further tariffs on our country, but this respite is overshadowed by the broader, more insidious impacts of his trade policies .

The heavy tariffs imposed on the European Union, China and other countries are set to reverberate through the global economy. Canada is far from immune to these ripple effects.

Trump’s tariffs are not just a bilateral issue; they are a catalyst for a potential global economic slowdown . The retaliatory measures from China and other affected nations are likely to exacerbate this downturn, creating a vicious cycle of reduced trade and economic activity like people saw in the 1930s.

The expected economic slowdown is already manifesting itself in oil prices, which dropped well over 10 per cent last week. This decline is particularly detrimental to oil producers in Alberta, whose stock prices plummeted more than 15 per cent in response. Stock prices may well recover somewhat this week, but that doesn’t change the big picture.

One of the most troubling aspects of Trump’s tariffs is that they are arbitrary and lack a clear economic rationale. This ambiguity has sown seeds of uncertainty , as reflected in the largest spike in the VIX index, the fear gauge, since the COVID pandemic. Uncertainty is the enemy of investment. It breeds caution and delays in capital expenditure, stalling economic growth.

The erosion of consumer confidence is perhaps the most damning consequence of Trump’s tariffs. As uncertainty looms and economic indicators falter, consumers are tightening their belts, leading to further downward pressure on global economies.

Even if the tariffs on Canada were lifted tomorrow, the lingering effects of diminished consumer confidence and investment hesitancy would continue to pose significant challenges.

In light of these developments, Canada must brace itself for ongoing economic headwinds.

The indirect impacts of the tariffs underscore the interconnectedness of global trade. Canada as an open economy is not immune to a global economic slowdown. Trust in the international rules-based order has vanished for years to come. The sheer madness of the Trump turmoil will have lasting effects.

There is no easy fix for Canada. Our fundamental problems predate Trump and have been in the making for years. Decreasing reliance on the U.S. market is essential, but diversifying trade to new partners will not help in the short term if potential partners are experiencing recessions.

The best thing we can do is get rid of trade barriers within Canada . All major political parties agree on this.

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The other fixes are much more difficult. We need to reverse the dismal trend in our productivity, but that will take time. We will need to scale up our promising technology startups, but that is easier said than done. Whichever party wins on April 28 will have to be honest with Canadians. Tough times will continue.

Yrjo Koskinen is the BMO Professor of Sustainable and Transition Finance at the Haskayne School of Business, University of Calgary, and specializes in sustainable and climate finance and corporate governance issues.

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Americans are rushing to stock up on everything from soy sauce to Lululemon Athletica Inc yoga gear before the tariffs imposed by President Donald Trump start to jack up prices on the shelves, according to media reports.

The day after Trump’s so-called Liberation Day last Wednesday, billionaire businessman Mark Cuban posted a warning to Americans on social media platform Bluesky.

“It’s not a bad idea to go to the local Walmart or big box retailer and buy lots of consumables now. From toothpaste to soap, anything you can find storage space for, buy before they have to replenish inventory,” Cuban wrote.

“Even if it’s made in the USA, they will jack up the price and blame it on tariffs,” he added.

Clothing industry groups also warned that American consumers should expect to pay more for clothes and shoes, about 97 per cent of which are imported, mainly from Asia.

Most of the clothing sold at Gap Inc., Lululemon and Nike Inc. are made in Asian countries, which face the stiffest tariffs. Under the president’s plan to punish countries for trade imbalances, Vietnam was slapped with an import tax rate of 46 per cent and Bangladesh and Indonesia, 37 per cent and 32 per cent.

With U.S. companies, which use foreign factories to keep labour costs down, and their overseas suppliers unlikely to absorb new costs this high, price hikes look inevitable.

“If these tariffs are allowed to persist, ultimately it’s going to make its way to the consumer,” Steve Lamar, president and CEO of the American Apparel & Footwear Association, told The Associated Press.

Trump’s tariff announcement last Wednesday spurred Americans across the country to hit the stores or load up their “carts” online, reports the Wall Street Journal.

For many people the Rose Garden event flicked the switch from threats to reality, Peter Atwater, an adjunct economics lecturer at William & Mary, told the WSJ.

“Just like Tom Hanks getting COVID was the tipping point five years ago,” he said.

Noel Peguero of Queens told the Journal that between Wednesday night and Thursday morning, he spent about US$3,000 on electronics, car parts, gardening equipment and other household items.

“Now is the time to buy,” he said.

Others stocked up on foreign brands like Lululemon and food — everything from Guinness to soy sauce.

One Reddit user from Illinois told Business Insider that his spending would come to “a complete standstill” for things that aren’t essential. Imports like fruit, avocados, and tea, “are all a luxury now,” he said.

A poll of the Business Insider newsroom revealed that people are snapping up Apple Inc. computers, hair extensions from Asia, a trench digging shovel from China and vanilla from Madagascar. One was planting a garden to replace expensive vegetables.

Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, questions where the United States will be getting its goods now that tariff rates are “astronomical.”

“Will the new ‘Golden Age’ involve knitting our own knickers as well as snapping together our cellphones?” she told the Associated Press.

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A rush to comply with the Canada-United-States-Mexico Agreement (CUSMA) by Canadian businesses could dramatically reduce America’s effective tariff rate on Canada, said the National Bank of Canada.

According to February U.S. trade data, just 33 per cent of Canadian imports were CUSMA compliant, putting the effective tariff at 15.6 per cent. National economists, however, believe there has been a “rush to compliance” since then that will bring the rate down to 5.7 per cent.

“Sifting through the chaos, it’s clear that USMCA compliance is the name of the tariff game for two of the U.S.’s largest trading partners,” said National economists Stéfane Marion and Ethan Currie.

National expects this rate could come down further as compliance increases, trade composition shifts and special tariffs related to border grievances are potentially removed.

“With rule of trade origin and self-compliance dynamics at play, we expect certain products — such as energy — to become effectively tariff-free, if they aren’t already,” they said.

 

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That’s because they trigger break penalties that banks calculate using “interest rate differentials” (IRDs) which cost Canadians billions every year. Mortgage strategist Robert McLister at MortgageLogic.news explains why falling rates spell trouble for anyone needing to break their mortgage contract. Find out more

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

Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

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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Unlocking the economic potential of the Canadian Arctic isn’t just about natural resources. While new mines and pipelines hold promise, there are other ways to tap into the region’s wealth. Here are three alternative opportunities that could bring in big returns.

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Brendan Bell knows what it is like to be ignored. It wasn’t so many months ago that the chief executive of West Kitikmeot Resources Corp., an Inuit-owned company proposing to build a road and deepwater ocean port in the Arctic , was spending a chunk of each day waiting for non-Arctic people to return his phone calls to discuss the project.

“This road is not a new idea,” he said. “Roads have a long history in the North.”

Do they ever. Yet that history can be summarized as roads — and major infrastructure projects of all types — may get proposed for the Arctic, but they generally don’t get built. No surprise then that Bell had been contending with an utterly non-urgent vibe from other people in relation to the Grays Bay Road and Port Project. That is until recently, when a lot of those same people started calling him back.

Given all roads lead to Donald Trump lately, it is no mystery why. In launching a trade war against Canada, the United States is no longer a friendly ally, at least at the top, and that is a driving reason behind why the narrative around roads that do not get built in the Arctic has shifted to one that Canada better start building roads, deepwater ports, naval installations, mines, power grids and fibre-optic networks as soon as possible or risk ceding its Arctic sovereignty and a northern treasure house of critical minerals to a foreign power.

Some of that treasure takes the form of gold , which is currently trading at around US$3,000 an ounce. Canadian gold miner Agnico Eagle Mines Ltd. believes its Hope Bay property in the Nunavut could produce as much as 400,000 ounces per year.

The Northwest Territories, meanwhile, is peppered with more than 1,200 active mining claims, while Nunavut is believed to be home to up to 30 per cent of Canada’s petroleum reserves and Yukon is ranked as a top 10 region worldwide in terms of its mineral endowment, according to the Fraser Institute’s 2023 annual survey of mining companies . All told, the conversation around what all the untapped northern bounty could be worth begins in the trillions.

Evidence of this newfound sense of urgency to stop talking about the Arctic and start doing things keeps popping up in Nunavut. Liberal Leader Mark Carney , Conservative Leader Pierre Poilievre and NDP head Jagmeet Singh have all stopped in Iqaluit in recent weeks. Depending upon which party platform you pull from, the politicians have committed to more infrastructure, better collaboration with the Inuit, increased military spending , investing in energy upgrades and adequate housing and boosting Canada’s capability to unleash the North’s economic potential.

“Canadians used to be fond of the old Winston Churchill quote about Americans that they will ultimately do the right thing after trying everything else,” Bell said. “But as it pertains to the Arctic, Canada has literally tried everything else. We have tried ignoring it. We have tried underinvesting in its communities and in its infrastructure. We have tried letting the Americans be responsible for our continental defence. And, at last, we can see now that it just isn’t sustainable. The mood of the country has changed.”

Being mightily ticked at Trump and expressing your patriotism by buying Canadian products at the grocery store is a much more straightforward and inexpensive (relatively speaking) way of taking control of your fate than supercharging the economic development of the North. As the old saying goes, you need to start somewhere, but outside of a few mines dotted here and there, developing the North has barely begun at all despite decades of promises to make it happen.

Whether the current generation can drum up the will and the cash to finally dig in and get big, ambitious projects done, ones that drive Arctic and national prosperity while safeguarding Canada from international bullies, could determine the country’s long-term fate.

If that sounds alarmist, it is worth having a brief chat with Rob Huebert, a political scientist at the University of Calgary, about the Northwest Passage. In the days of yore, this shortcut between the Atlantic and Pacific oceans stoked the imagination of explorers, who would set off in search of an ice-free route and often get stuck in the ice.

Nowadays, the passage is navigable for a stretch of time in the summer and fall. The theory holds that as the world warms up and more sea ice melts, the passage will become an increasingly attractive shipping lane, so controlling it is key. Canada’s position is that the Northwest Passage belongs to Canada. The Americans, to paraphrase, have long claimed the passage as international waters.

In practice, the disagreement between neighbours has been a remarkably polite affair. A U.S. ship has never entered the passage without first informing the Canadians what it is up to. Granted, Americans tell rather than ask for permission, but they also typically request a Canadian icebreaker be somewhere nearby in case they run into any problems with the ice.

“The Americans have always understood the Northwest Passage as a security issue, which has meant keeping the Soviets, and now the Russians, away,” Huebert said.

The Americans have also historically done the heavy lifting in terms of keeping the Russians away, allowing Canada to blissfully flake out and, until last year, classify the Arctic as an “area of exceptional” peace, despite Russia having an extensive network of military bases and several nuclear-powered icebreakers at its disposal.

“The Russian threat is clearly understood,” Huebert said. “Now, all of a sudden, you get Trump back and he has shown a willingness to throw his allies under the bus, and he’s also threatening the existence of Canada . We are now in a situation where we are completely exposed in the North.”

Things are bad, but that could be good for West Kitikmeot’s Grays Bay Road and Port Project. The company has received dribs and drabs of federal funding over the years to conduct road feasibility studies and the like, but there are no bulldozers on the immediate horizon.

The proposal to build a 230-kilometre all-weather road in the middle of a mineral-rich area of the central Arctic, one that would tie into ice roads and ultimately connect a proposed deepwater port, featuring a bunch of bells (maintenance sheds) and whistles (an airstrip), to Yellowknife and southern Canada requires some chicken-and-egg-type thinking.

The major mineral deposits — copper , zinc , gold and silver — do not need to be discovered. Mining companies have been aware of their existence for decades. Bell’s contention is that if you build the main road, branch roads leading to new mines will follow as the economics of developing a mine go from, “We know the copper is there, but we just can’t get to it,” to, “We know the copper is there and we now have a way of getting it to market.”

The proposed deepwater port could also serve a dual purpose. After all, the Canadian navy is going to need somewhere to dock given that the Nanisivik Naval Facility, first announced by prime minister Stephen Harper in 2007 and repeatedly scaled back since then in scope and plagued by construction delays, including a sinking wharf and a lead contractor going bankrupt, as well as rife with boneheaded, impractical design elements, such as unheated fuel tanks, still doesn’t have an opening date.

Were the Royal Canadian Navy to commit to a long-term lease agreement with West Kitikmeot, the company could take it as proof of future revenue in order to raise capital from the private sector in an arrangement Bell foresees being split 75-25 between public and private.

On that front, he has been meeting with the Department of National Defence to understand the scope of the navy’s needs. There is progress. Moving forward, a road could include a fibre-optic communications corridor and potentially even a liquefied natural gas pipeline .

“Nobody is going to make an investment privately on speculation that mines in the future will come along; they’re going to need something more concrete than that,” he said. “That’s really the next piece for us to solve.”

Of course, the uncomfortable question is, how much is the road going to cost?

Bell hesitates to give a hard number because the number he is working with is a projection based on a study from 2018, but he figures if you start at $1 billion, and throw in another $400 million or so for the port, then you would be on the right track.

Building anything in the Arctic is going to involve some sticker shock. Also required is a keen understanding that the ground beneath whatever gets built — a road, port, school, town or mine — may melt. Instead of the sort of bedrock structural engineers favour when sinking construction pilings, the Arctic, particularly the western portion, is filled with permafrost, or permanently frozen ground that is now in the process of permanently unfreezing at an alarming rate.

“When we talk about building in the Arctic, foundation designers have to start to consider how much overdesigning we are going to have to do to anticipate what a building will need in 30 years’ time,” Chris Burn, a physical geography professor at Carleton University, said. “If we build things to today’s code, all is going to be well, it’ll be just fine, but then in 15 years there’s going to be a problem.”

Burn is a Brit and attended a series of lectures on permafrost as an undergraduate in the 1970s. Halfway through the second one, he knew what he wanted to do with his life, and the place to do it, at least for an English-speaking scholar, was the Canadian Arctic.

He went on to become president of the International Permafrost Association for a time, and he is somewhat of a legend in Canadian Arctic permafrost research circles. He is also the guy that northerners call to consult with on building projects, including the Inuvik-Tuktoyaktuk Highway.

The 138-kilometre, two-lane, all-weather gravel road tying the community of Tuktoyaktuk on the Arctic coast to the rest of Canada’s road network opened in 2017. The price tag was $300 million and its completion allowed Canada, 150 years post-Confederation, to claim it was connected by road from coast to coast to coast.

But beneath the proudly Canadian optics of tethering the country north to south was the chilling reality of building infrastructure in the permafrost zone.

“The ice in the ground is what holds the permafrost together,” Burn said.

Think of the ice as the glue. A new, hypothetical four-storey building built to serve an equally new, hypothetical Arctic outpost would typically be built on pilings. Current engineering wisdom allows that once pilings are sunk in the permafrost, a building is effectively frozen in place. But as the permafrost thaws, and the glue unsticks, the building could be on the move: sinking, shifting or toppling over altogether.

Roads are even more dicey. Buildings have small footprints, but future Arctic roads will traverse multiple building environments and the amount of ice-glue in the ground will vary depending on the location, Burn said.

In a landscape that is humming with, say, mining projects, the ice-glue will need to support the weight of industrial-scale trucks. As long as the glue sticks, all will be well, but should the glue lose its stickiness due to temperature increases, the road would be in big trouble and need substantial repairs while those who travel upon it could be put at grave risk.

“Knowing the quantity of ice underneath the road is a really critical part of the information needed to design the road because the designers have to decide how they’re going to keep that ice frozen,” Burn said.

One bright idea has been to refrigerate the permafrost. The Shakwak corridor is a critical stretch of the Alaska Highway connecting the state, via Yukon and British Columbia , to the lower 48 states. Canada and the U.S. have long co-operated in maintaining the highway, and a big chunk of that job in recent decades has been figuring out what to do about the thawing permafrost causing gargantuan potholes, bumps and cracks, as well as warping guardrails at the highway’s edge.

The community of Beaver Creek in western Yukon piloted a project involving thermosyphons: picture a white pipe stuck in the ground next to the road that is designed to vent heat from beneath the road while carrying cold back into the permafrost. The gadgets are a relatively low-tech way of addressing thawing permafrost, but low-tech should not be confused with inexpensive.

“Beaver Creek’s thermosyphon project cost $4 million and that was for 400 metres of road, which would work out to about $8 million per kilometre,” Burn said. “We’re not going to be building roads for $8 million a kilometre. We don’t do that in Canada.”

On top of that, road maintenance in areas of thawing permafrost is already six times pricier than maintaining roads in areas where the permafrost “is stable or absent,” according to the Yukon government. Burn said more thawing permafrost is in the cards, so more Arctic architects, road designers, maintenance types and accountants will presumably be puzzling over what to do about it and how to budget for it.

Taken as a whole, a great, imagined Arctic infrastructure build-out might seem a bit daunting, but Canada has not always been afraid of dreaming big. Consider John Diefenbaker’s Northern Vision.

The country’s so-called Prairie populist prime minister uncorked a barnburner of a speech before a packed house at the Winnipeg Civic Auditorium during a 1958 election campaign that his Conservatives went on to win in a blowout. Diefenbaker, whose oratorical chops were substantial, was never finer nor more fiery that day as he spoke of a “new” Canada infused with a sense of national purpose and destiny.

“How many of you here knew the pioneers in Western Canada?” he said. “I saw the early days here, here in Winnipeg in 1909, when the vast movement was taking place into the Western plains — they had imagination. There is a new imagination now. The Arctic.”

This new Canada would be a “Canada of the North,” connected by a network of northern roads, lit up by power grids, airports, mines and hydroelectric projects, you name it, all built to tame — and exploit — the last great Canadian frontier while creating hundreds of thousands of jobs and safeguarding the country’s “independence” from you know who to the south.

It should be noted that the Inuit did not view their home as some wild, untamed frontier, nor were they consulted about Diefenbaker’s grand plan, an oversight that would have been far more egregious had the North he envisioned been built.

In reality, after a short-lived burst of activity, which produced about 100-kilometres worth of road and a railway connecting a lead and zinc mine in the Northwest Territories to a railway junction in northern Alberta that today serves as a recreation trail, Diefenbaker’s vision succumbed to ballooning costs and a chorus of barbs from its critics, including the Liberals, whose quip that he was building roads from “igloo to igloo” resonated with the less enlightened Canada of the age.

Six-plus decades later, the Arctic has re-emerged as a national priority, leaving the Inuit to wonder what took us so long.

“I don’t think any of us have ever shied away, on the Inuit side, from talking about what it is going to take to bring the Inuit into Canada,” Natan Obed, president of the Inuit Tapiriit Kanatami, said. “The costs involved are going to be big.”

He said there are some basic facts about Inuit that southern Canadians need to be aware of. First and foremost, while the Inuit are the “first Canadians,” they view themselves as “Canadians first.” In short, they are just as patriotic, if not more so, than most.

Obed played college hockey in the U.S. He recently bought a new pair of blades for an unprintable sum for his weekly pick-up skates in Ottawa, and he said watching Canada beat the Soviet Union in the final of the 1987 Canada Cup was among the most defining memories of his childhood.

Back then, he was in North West River, a small, predominantly Inuit town in Labrador, and had never been to an NHL game, let alone to Ontario, but cheering for his country connected him to the country beyond his front door, he said. There is a deep and affectionate bond for Canada in the North, and it is one that southern Canadians can at times appear oblivious to, assuming they even bother to think about the Arctic in the first place.

What the Arctic is not, Obed said, is an incomprehensibly vast, unmanageable space. It is home to 51 Inuit communities and its residents figured out how to live there eons ago. They view it not as a northern “wasteland,” but as a homeland with “vast potential” that they are keen to develop.

Simply put, the locals want in on the resource development action, and development begins with being able to access the resources, which requires building infrastructure of the kind Diefenbaker was talking about back in the 1950s.

The Inuit already have modern treaties and a constructive framework in place for resource development with the Canadian government. The bureaucratic heavy lifting has been done. What has been missing, Obed said, is the collective will to roll up our sleeves and get at it.

“As Inuit, we are always invoking the creation of the country, and the imagination of the founders had for building east-west connections,” he said. “At some point, the railway that was built across the country would have been considered a lot like what we’re proposing with building infrastructure that connects north and south. Yes, it is going to cost a lot of money, but it is a nation-building exercise, and if Canada seriously talks about being an Arctic nation state, it’s time that Canada really understands what that means and responds to it.”

For example, imagine you are an Inuit entrepreneur or, better yet, imagine you are Aaju Peter, a 65-year-old, Greenland-born Inuit activist, lawyer, artisan and language preservation teacher in Iqaluit.

When she is not teaching Inuktitut to daycare workers at the local college or doing online coursework for a diploma through the University of Victoria, she makes sealskin garments, everything from men’s ties to sealskin mitts to beaver hats, with fox fur trim, that retail for $495. She said her sewing machine is about the size of a coffeemaker and weighs 50 pounds, but she has to either ship it to Ottawa when it needs servicing, lug it onto a plane and fly it down herself or troubleshoot the problem and fix it.

Her point? There is no suitable repair shop in Iqaluit, and not much else in the way of basic services designed to enhance the scaling-up of a small business , or any business, and that extends to the available means of getting products to market.

There is no road to Montreal or Toronto . For shipping, it is Canada Post or bust, while online sales rely on a costly satellite internet network provider that can have reliability issues. Other challenges are even more immediate, Peter said, such as how do you budget for groceries when a box of macaroni costs 10 times what it does in the south?

The effort to simply get by in the Arctic can be significant.

Peter is in her sixties, so she has experience in handling what life throws at her and can manage a heavy workload. But for a young Arctic striver, trying to figure out how to pay rent, go to school and juggle a job or two can seem overwhelming. She is not advocating for handouts, but some of the basics need to be addressed when people talk about building infrastructure in the North.

“How can you have true sovereignty if you’re not implementing the same standards as in the rest of Canada and if you don’t have proper infrastructure?” she said. “Canada needs to want the Inuit to be Canadian, but to get there, we need to have better opportunities, better living conditions, proper financing and support. If our lives were made a bit easier, we would have a much healthier and better-educated population.”

The knock-on effect would be a northern, homegrown workforce for the imagined roads, schools, daycares, machine repair jobs, government offices, mines and ports of the Canadian Arctic future, and who would also be stakeholders, if not outright owners, of whatever the enterprise happens to be.

The challenge will be figuring out how to pay for it, and not over the course of a single political cycle, but over decades, while keeping an eye on the ultimate prize of building an Arctic that is not an afterthought, but a northern economic engine boosting the country’s overall wealth.

For those wishing to discuss further, Brendan Bell is expecting your call.

• Email: joconnor@postmedia.com

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The fallout from Donald Trump ‘s reciprocal tariff bombshell last week has been massive and it continues to grow. Stock markets are reeling. The S&P/TSX composite index fell into correction territory on Friday following in the S&P 500’s wake, with even further losses on Monday.

Critics of Trump’s plan, which will unleash a barrage of tariffs on April 9 ranging from a baseline of 10 per cent to a high of 50 per cent, argue that it will drag the United States economy into a recession as the levies increase the cost of goods and suppress demand.

Among those questioning the wisdom of the tariffs are major figures in the investing world including Bill Ackman , founder of hedge fund Pershing Square Ltd. and a vocal supporter of the U.S. president.

Even Jerome Powell , chair of the Federal Reserve, weighed in, saying the scope of the tariffs was “much larger” than had been anticipated.

Below is a roundup of what investors, economists and Wall Street titans have said about Trump’s tariffs:

“I strongly believe launching tariffs on April 9 against the entire world — massively in excess of what we are being charged — is a mistake.” — Bill Ackman, founder of Pershing Square, on X.

“Trump’s tariffs are the most expensive and masochistic the U.S. has pursued in decades. A very crude estimate of Trump’s tariffs puts the projected loss at US$20 trillion dollars, or well over US$200,000 per family of four.” — Larry Summers, former U.S. Treasury secretary, on X .

Trump's tariffs are the most expensive and masochistic the US has pursued in decades.

A very crude estimate of Trump's tariffs puts the projected loss at $20 trillion dollars, or well over $200,000 per family of four.

Here is the basis for the calculation:

— Lawrence H. Summers (@LHSummers) April 3, 2025

“We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products.” — Jamie Dimon, chief executive of JPMorgan Chase & Co. , in the company’s annual shareholder letter .

“The first order consequences of them (tariffs) will be significantly stagflationary in the U.S.” — Ray Dalio, founder of hedge fund Bridgewater Associates LP , referring to the economic bogeyman of rising inflation and slowing growth.

“We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3 per cent, down from 1.3 per cent previously.” — Michael Feroli, chief economist, JPMorgan . A note last week from JPMorgan’s global economic research group lifted the odds of a recession in the U.S. to 60 per cent from 40 per cent, in the wake of the dramatic tariff unveiling.

“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected.” — Jerome Powell, chair, Federal Reserve , during a speech at the Society for Advancing Business Editing and Writing annual conference, adding, “the same is likely to be true of the economic effects, which will include higher inflation and slower growth.”

“The world was prepared for ‘reciprocal tariffs.’ Whatever the abomination that was launched at the Rose Garden was, it is a disaster — mostly for the U.S., but also for the global economy.” — Peter Tchir, head of macro strategies at Academy Securities , on Bloomberg.

“Trump’s tariffs are the “biggest policy mistake in 95 years.” — Jeremy Siegel, emeritus professor of finance, University of Pennsylvania, Wharton School of Business , during an interview, on CNBC.

“If he (Trump) has any brain in his head, he will know that he has to de-escalate.” — Nouriel Roubini, economist and professor emeritus at the Stern School of Business, New York University , on Bloomberg.

Tariffs are “the most absurd thing I’ve seen on Wall Street covering stocks for the last 25 years. It’s the worst policy mistake in 100 years. It will go down in history as one of the worst moves to ever come out of D.C.” — Dan Ives, senior equity research analyst, Wedbush Securities, on Bloomberg

“None of this makes a whole lot of sense. But I suppose since last November, we’ve become immune to all this insanity.” — David Rosenberg, Rosenberg Research and Associates Inc. , on BNN/Bloomberg

“The market is giving a big thumbs down to this tariff policy.” — Ed Yardeni, Yardeni Research , on Bloomberg.

“I think that was the dumbest, most economically illiterate speech I have heard in my life, and I’ve heard a lot of bad ones. It was filled with lies and distortions.” — Scott Lucas, professor of American Studies at University College Dublin , on international news network France 24. He backed up his assertion by saying the weighted average of European Union tariffs on the U.S. is one per cent. (Trump claimed the EU has a 39 per cent tariff rate on the U.S.) “What you had was the president of the United States speaking almost absolute nonsense, and the biggest nonsense of all is that tariffs can replace income taxes and that they will lead to economic growth. They won’t.”

“U.S. economic policy from the dark ages including tariffs and broader U.S. policy uncertainty are proving to be the ultimate wealth killers. — Derek Holt, Bank of Nova Scotia , in an investor note. Holt was referring to the last time high tariffs were imposed in the U.S. — in the 1930s — which economists say helped lead to the Great Depression

“The White House claims the assessment was performed by its ‘Council of Economic Advisers,’ but it wouldn’t pass muster in a first-year economics class,” Karl Schamotta, chief market strategist, Corpay Currency Research , in an investor note. The mathematics employed to arrive at the country-by-country tariff rates have been derided by economists. “The formula used to calculate the tariffs, released by the U.S. Trade Representative (USTR), took the U.S.’s trade deficit in goods with each country as a proxy for alleged unfair practices , then divided it by the amount of goods imported into the U.S. from that country,” the Financial Times , wrote. “The resulting tariff equals half the ratio between the two, resulting in countries such as Vietnam and Cambodia — which send large amounts of manufactured goods to the U.S. but import only small quantities from the U.S. — attracting punitive tariffs of 46 and 49 per cent respectively,” the FT said.

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“I talked to 10 CEOs who are all in the (U.S.) business roundtable. These are CEOs of the largest American companies. They think this is a huge mistake, too much, that it will have lasting, negative repercussions for the United States.” — Brad Gertner, Altimeter Capital chief executive, on CNBC.

• Email: gmvsuhanic@postmedia.com

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The head of the Canadian arm of Molson Coors Beverage Co. is hoping consumers and policymakers understand what it means for a drink to be “brewed in Canada” as they make decisions on buying Canadian products during the trade war with the United States.

Chantalle Butler, president of Molson Coors Canada, said not having the right information about which products are Canadian and which are American could have ripple effects across the country and thus undermine the goal of “buying Canadian.”

“In this time of people wanting to make decisions to support Canadians, it’s our responsibility to make sure that … they actually understand what it means to be brewed in Canada,” she said during an event at the Canadian Club Toronto last week.

Molson Breweries, now part of the Canada-U.S. multinational corporation Molson Coors Beverage, is Canada’s second oldest company, behind Hudson’s Bay. The company dates back to 1786, when North America’s oldest beer brewery was founded in Montreal. Molson Canadian, first brewed in 1959, remains one of Canada’s most iconic beer brands.

While Molson Breweries merged with U.S.-based Coors Brewing in 2005, the company remains partially Canadian-owned and is now one of the world’s largest beer makers.

“As we think about our role as being Canadian, (we’re) making sure that we are standing loud and proud about our heritage,” Butler said. “We are a global company started in Canada, 239 years old and still counting for many more centuries.”

Butler, who was promoted to her role exactly a year ago, said recent political and economic events, particularly tariff announcements , have brought to light the importance of articulating what it means to be a Canadian-brewed product and what it means to be a Canadian company.

Last week, the province of Saskatchewan walked back its ban on the sale of 54 types of American-branded beer made in Canada after an outcry by industry groups pointed out the beer is made in facilities across the country by Canadian workers and uses barley grown in Saskatchewan.

The ban, which included a directive for the Saskatchewan Liquor and Gaming Authority (SLGA) to stop purchasing U.S. alcohol, initially came into effect in early March as the province’s response to U.S. President Donald Trump’s 25 per cent tariffs on Canadian goods.

“And so we banded together as an industry — Beer Canada, Restaurants Canada, many of our partners and collective brewers — and made sure that the government of Saskatchewan understood what it means to be brewed in Canada,” said Butler.

Molson Coors employs more than 2,500 workers in Canada and has nine breweries across the country. The company buys barley from Saskatchewan farmers, as well as many other grains supplied by Canadian farmers across the country, she said.

“We employ many, many people in different supply chains and other facets, and so making sure that (the government) understood the decisions they were making, the impact they would have not only on the Saskatchewan economy and population, but (that it could have) a ripple effect across Canada and actually be counterproductive to what they were trying to accomplish,” she added.

She said the Saskatchewan government did work on the feedback and reverse their decision “relatively quickly.”

“It was a good lesson for us as an industry on how important it is. Consumers have good intents and (are) obviously entitled to their own decisions, but trying to make sure they have the right information and the right education to make those decisions and not end up with unintended consequences,” she said.

Before Saskatchewan, a number of Canadian provinces announced similar directives to remove U.S.-made alcohol from provincial liquor stores in retaliation for the tariffs, although implementation wasn’t simple.

As the U.S. formally launched a trade war with Canada and Mexico in the beginning of February, provinces such as Ontario, British Columbia, Quebec, Nova Scotia and Newfoundland and Labrador announced their provincial liquor authorities would stop stocking and selling some or all U.S.-produced alcohol until Trump’s 25 per cent tariffs were dropped.

On Feb. 2, Ontario Premier Doug Ford said that when the U.S. tariffs kicked in on Feb. 4, all American products would disappear from the province’s Liquor Control Board of Ontario (LCBO) shelves. The LCBO is one of the biggest alcohol purchasers in the world.

“Every year, LCBO sells nearly $1 billion worth of American wine, beer, spirits and seltzers. Not anymore,” he wrote on social media .

On March 4, the LCBO officially announced it would stop selling U.S. products in response to the tariffs. At the time, it said more than 3,600 products from 35 U.S. states were listed and that U.S. products would not be purchased by the LCBO until it was directed to resume normal business.

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B.C. Premier David Eby’s promise was similar but much more targeted, directing the provincial liquor board to immediately stop purchasing and selling American liquor from Republican-led “red states.”

Butler said her company is monitoring the ever-changing tariff situation and its impact on business operations. She said 90 per cent of its products are made in Canada, while the other 10 per cent, its Heineken portfolio, comes from Europe.

“As the tariff situation unfolds, we will deal with that,” she said, noting that a large portion of their supplies are locally sourced. “From that perspective, I think it’s great that we support Canadian farmers, and we have a lot of materials that should not be directly impacted by tariffs.”

• Email: dpaglinawan@postmedia.com

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Regulatory requirements on businesses have increased by 15 per cent under the Liberal government, costing firms at least $51 billion annually

The current duties are the result of a trade dispute between Canada and the U.S. that has been dragging on for decades

Chief executive Mark Bristow has talked for years about his desire to grow the company’s copper operations

Shopify's use of AI has increased in recent years with the company rolling out tools to help answer merchant questions

The number of Canadian firms now operating on the assumption that a recession will occur over the next year has risen, according to surveys released by the Bank of Canada on Monday.

Around 32 per cent of respondents in the Business Outlook Survey (BOS) believe an economic downturn will occur in the coming year, up from 15 per cent over the previous two quarters. The growing pessimism is also reflected in a survey of Canadian consumers, where 67 per cent are expecting a recession in the coming year, up from 47 per cent in the last quarter.

Data from the BOS is based on interviews conducted between Feb. 6 and Feb. 26, which is before U.S. President Donald Trump announced 25 per cent tariffs on Canadian steel and aluminum in mid-March and 25 per cent tariffs on autos on March 26.

Businesses surveyed, particularly those in the export sector, outlined three main concerns including the ongoing trade conflict with the United States, the political situations in both Canada and the U.S. and the risks to consumer spending. Around 40 per cent of firms expect lower sales growth if tariffs are implemented.

Trade uncertainty has also translated into a pullback in investment with 22 per cent of firms now saying the uncertainty has put a hold on   their plans. Hiring has also been paused   due to the uncertainty, with just 32 per cent of firms planning to hire more workers over the next year. The last time the portion of firms that planned to hire was this low was the fourth quarter of 2015.

Tariffs have also put upward pressure on price expectations for Canadian businesses. The BOS highlights a number of other reasons why price expectations have risen, including the depreciation of the Canadian dollar , the pivot away from U.S. suppliers, tariffs from China and suppliers proactively raising prices in anticipation of future tariffs.

Nearly 45 per cent of firms expect to partially or fully pass through their costs to consumers, while 31 per cent are not expecting their input prices to be affected by tariffs. Around 17 per cent of businesses do not plan to pass on their costs, while four per cent remain unsure about the extent of the pass-through.

The survey also asked about the inflation outlook , which has businesses expecting the consumer price index to be 3.6 per cent in the year ahead.

According to the bank’s Consumer Expectations Survey, trade uncertainty is raising concerns over job security and financial health. This translates into a larger portion of consumers holding back on purchase plans this quarter.

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“I’m definitely spending less and saving more because the future is so uncertain,” said one respondent. “I like to be ahead of what might happen in the economy for example, my job security might get worse.”

• Email: jgowling@postmedia.com

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'We can’t control President Trump, but we’re in full control of the kind of future we build for ourselves' said Ford

Karl Schamotta, chief market strategist at Corpay, talks with Financial Post’s Larysa Harapyn about why the United States dollar is going down and the Canadian dollar is going up.

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Market forecasts are being slashed as the selloff sparked by U.S. President Donald Trump ‘s tariff onslaught shows no signs of abating.

After Trump’s “Liberation Day” last week, the S&P 500 suffered its worst two-day drop since March 2020, wiping out over US$5 trillion in value and pushing the Nasdaq 100 into a bear market.

Stocks plunged again Monday with the S&P 500 down 3.8 per cent in early trading. The Dow Jones Industrial Average was down 1,200 points, and the Nasdaq composite was 4 per cent lower.

If the decline holds it will be the largest three-day fall in the index since the Global Financial Crisis , pushing it into bear market territory, said analysts.

“This is an epic economic and market event similar to 1971 and the end of the gold standard except with immediate negative consequences,” Bill Gross, the former chief investment officer of Pacific Investment Management Co., told Bloomberg last week.

“Investors should not try to ‘catch a falling knife.'”

Former Treasury Secretary Lawrence Summers echoed the sentiment Sunday.

“This was the fourth largest two day move since the second World War,” he wrote in a post on X. “The other three were the 1987 crash, the 2008 financial crisis, and the COVID pandemic. A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to just be very cautious.”

At this point few are recommending “buying the dip.”  Bank of America strategist Michael Hartnett said investors should “short” risk assets until Trump moves away from tariffs on to tax cuts, Bloomberg reports. If there is a recession, investors should wait until the S&P 500 sinks to between 4,800 and 5,000 point to jump back into risk. The index closed at 5,074.08 Friday.

Analysts say what will be crucial in the next few days is whether the White House tries to find “an elegant off-ramp or doubles down.”

Saturday the United States’ 10 per cent baseline tariffs on all countries went into effect and on Wednesday those are set to rise as the higher reciprocal tariffs take hold. China’s 34 per cent retaliatory tariffs are due on Thursday.

Over the weekend Trump and his administration showed few signs of backing down. The president said on Air Force One: “Forget markets for a second — we have all the advantages,” and “sometimes you have to take medicine to fix something.”

Still many remain hopeful that the man known for “The Art of the Deal” will find a way to ease the pressure. More than 50 countries called the administration over the weekend seeking talks.

Capital Economics expects the president to quickly announce a few deals that will reduce the tariffs on the hardest hit countries, followed by more agreements in the months to come.

“We suspect that even the pugnacious Trump must understand he’s gone too far this time,” said Paul Ashworth, Capital’s chief North American economist.

“Once it becomes clear that he is willing to accept relatively minor concessions in exchange for scaling back those tariffs, equities should rebound.”

The alternative is a president who doubles down, carrying out his threats to impose even stiffer tariffs on countries that retaliate with penalties of their own.

If that happens tanking stock markets will soon be followed by a collapse in household and business confidence, said Ashworth, pulling the U.S. economy into recession within a few months.

“A U.S. Administration that doubles down will have immense global implications for 2025 and the years and decades ahead,” wrote Jim Reid, global head of macro and thematic research at Deutsche Bank.

“At the moment there are few signs they are backing down which will likely signal more market turmoil ahead. Rarely if ever have the next few days been so important.”

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Canada’s labour market shed the most jobs in more than three years in March, and at least one economist says the weaker-than-expected showing could be signalling the start of a recession.

The economy lost 33,000 jobs, when economists had been expecting it to gain 10,000. It was the first decline in eight months, and the largest since January 2022, though gains in February had dwindled to just 1,100.

“Overall, the deterioration of the labour market may be signalling the start of a possible recession in Canada due to the U.S. tariffs,” said Alberta Central chief economist Charles St-Arnaud.

“As seen in recent weeks, the extreme uncertainty has had a significant negative impact on business sentiment, lowering hiring intentions.”

 

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A Financial Post reader asks FP Answers for advice for his two gen-z daughters who are building their savings in tax-free savings accounts (TFSAs). Is a TFSA the right vehicle and what should they put in it? Financial planner Andrew Dobson says TFSAs can great choice for young people, as they offer flexibility, ease of use and they maximize returns. But there may be an even better choice that could also be used in tandem with the TFSAs. Find out more 

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.

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As the world and markets wake to the full impact of U.S. President Donald Trump’s global “reciprocal” tariffs , FP Video sits down with the CEOs of Canadian Manufacturers & Exporters and Starlight Capital, plus an associate professor from the Sprott School of Business, to discuss how investors , manufacturers and Canada can make the most out of the trade war turmoil.

Trump’s trade war stalls manufacturing investment

Dennis Darby, chief executive of Canadian Manufacturers and Exporters, talks about how manufacturers are coping in the uncertainty around Trump’s tariffs and how renegotiating CUSMA is the solution.

These investments are ‘immune’ to tariff turmoil

Dennis Mitchell, chief executive and chief investment officer at Starlight Capital, talks about what strategies are best for investors amid trade uncertainty and volatile markets.

How Canada could win a ‘no tariffs’ deal

Ian Lee, associate professor at Sprott School of Business, Carleton University, talks about how the Great Depression is ‘a great case study’ when it comes to understanding current trade tensions.

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About US$5 trillion in shareholder value was wiped off the S&P 500 on Thursday and Friday, as concerns over an escalating global trade war hit markets.

The selloff in stocks deepened following United States President Donald Trump’s “Liberation Day” announcements of the harshest tariffs in about a century. On Friday, China announced a 34 per cent tariff on all U.S. imports in retaliation, as fears grow that tariff moves will trigger a global recession.

Here’s what investors need to know about the selloff, the worst two-day market decline since the COVID pandemic.

Major indexes

The S&P 500 index ended Friday in its worst two-day rout since March 2020, dropping more than 10 per cent and losing about US$5 trillion in value. The Nasdaq 100 declined by about six per cent, pushing it into bear market territory. The Dow Jones industrial average also fell more than five per cent. In Canada, the S&P/TSX composite index closed 4.7 per cent lower, to 23,193.47 points, reaching its lowest level since September 2024. Though Morningstar’s Canada index plummeted 3.25 per cent Friday morning, it has continued to outperform the firm’s U.S. index.

Volatility index

The Cboe Volatility Index (VIX), the market’s “fear gauge,” surged to nearly 45.31, a closing level last reached in the opening months of the COVID-19 pandemic, indicating heightened investor anxiety. This reflects concerns over the escalating trade war and its potential to trigger a global recession. ​Since its launch, the VIX, which measures the expected volatility of the S&P 500, has averaged about 20 per cent. “When there is fear in the market, as the VIX is telling us, everything will sell off,” Jay Woods, chief global strategist at Freedom Capital Markets, told Bloomberg.

Sectors hardest hit

Energy and technology sectors experienced notable declines due to their sensitivity to global trade dynamics. Oil hit a four-year low on expectations of a global slowdown, with West Texas Intermediate crude falling more than six per cent to about US$62 a barrel, according to Oilprice.com. Brent crude was down about six per cent to about US$66, the lowest since 2021, as OPEC+ moves to increase output just as tariffs threaten energy demand.

Big Tech stocks with exposure to tariff-hit China slumped, including Nvidia Corp., which dropped more than seven per cent, Tesla Inc., which dropped more than 10 per cent, and Apple Inc., which dropped more than seven per cent.

Other stocks hit hard included Boeing Co., which fell more than nine per cent, and Goldman Sachs Group Inc., which declined more than seven per cent, leading the Dow lower.

Safe havens: bonds, crypto and gold

Investors are buying government bonds, leading to a significant drop in yields. The 10-year Treasury yield has fallen below four per cent. Bitcoin was trading about one per cent higher at just over US$84,000 on Friday. Investors have been buying more gold and gold funds recently, pushing the price to a record US$3,148.88 a troy ounce this week as they seek a safe haven from market uncertainty. But bullion slipped more than two per cent to US$3,037.65 an ounce, caught up in the selloff.

• Stocks plunge and that may be start of pain for Canadian consumers
• Bank of Canada April rate cut in play as job market weakens
• History shows market meltdowns are short-lived

Buy the dip?

Though retail investors often see opportunity when stocks dip, even they seem to be spooked. JPMorgan Chase & Co. reported retail orders amount to net selling of US$1.5 billion as of noon, compared with figures showing individuals were net buyers of US$4.7 billion of shares just a day ago.

The fastest U.S. stock market selloff since the depths of the COVID pandemic has left valuations looking cheaper than they have been for a while, but the S&P 500’s trailing price-to-earnings ratio still sits at 23, with room to fall further.

• Stocks plunge and that may be start of pain for Canadian consumers
• Bank of Canada April rate cut in play as job market weakens
• History shows market meltdowns are short-lived

Given concerns about inflation and tariffs, analysts lowered earnings per share estimates for S&P 500 companies for the first quarter by a larger margin compared with the three most recent averages , according to FactSet Research Systems Inc. “What we’re seeing is a big reassessment of global risk but obviously focused on the U.S.,” James Rossiter, head of global macro strategy at TD Securities, told CNBC.

— With files from Bloomberg.com

 

The shock of United States President Donald Trump’s global trade war has already hit the stock portfolios of Canadian consumers, but that may be just the beginning of the pain.

“This is the biggest realignment in global trade ever,” said Walid Hejazi, an associate professor of international business at the Rotman School of Management.

Here’s a look at the risks facing consumers.

Stock market losses

U.S. stock markets have shed a staggering US$6.4 trillion in market capitalization in just two days, according to The Wall Street Journal. On Thursday, after reciprocal tariffs were announced, the S&P 500 index fell five per cent, its biggest one-day drop since 2020 and followed that up with a bigger decline on Friday.

China soon retaliated to Trump’s reciprocal tariffs (he slapped tariffs of 34 per cent on the nation) with matching levies on all imported goods from the U.S., which only rattled the market further. The S&P 500 was down more than 17 per cent from its mid-February high on Friday.

The losses continued Monday with the S&P 500 down 3.8 per cent in early trading. The index has lost more than 20 per cent since setting a record less than two months ago and if it finishes the day below that mark will be in a bear market.

The S&P/TSX composite index was trading down 825.74 points or 3.56 per cent.

In the meanwhile, multiple brokerages, including UBS Group AG and Royal Bank of Canada Capital Markets, slashed their year-end targets for the S&P 500.

Hejazi said that if Canada and Mexico come to a deal with the U.S., there might be some recovery in financial markets — though this could be stifled if more countries retaliate with tariffs like China.

Recession fears are growing

JPMorgan analysts recently said the odds of a global recession  have increased to 60 per cent.

“The big threat is uncertainty, and people don’t know what’s coming,” Hejazi warned. “The longer this goes on, the bigger the impact you’re going to see on the real economy.”

Canada already lost 33,000 jobs in March and the unemployment rate ticked up to 6.7 per cent.

“Now that many tariffs are in place, the trend in the upcoming months is more layoffs and unemployment as tariffs cause widespread economic pains,” wrote Tu Nguyen, an economist at RSM Canada LLP, in a recent note.

“This will be especially prominent in trade-dependent industries such as wholesale and retail trade, manufacturing, especially auto production, and steel and aluminum, due to tariffs.”

Nguyen added that shrinking demand for goods and services will reduce the appetite for talent, which coupled with recession fears, could potentially lead to layoffs and a slowdown in hiring across sectors.

Hejazi said negative expectations could take on a life of their own.

“When people become pessimistic, they stop spending,” he said. “It’s a self-fulfilling prophecy … and it makes the recession more likely.”

Rising prices

Economists from Toronto-Dominion Bank recently said U.S. inflation is at risk of approaching four per cent or more, with consumers already starting to “tap the brakes” on spending.

In comparison, they anticipate consumer price growth in Canada to stretch to more than three per cent this summer.

Hejazi noted that Canada is only grappling with a trade war with the U.S., while the latter has launched a trade war “with everybody,” exacerbating the breadth and scale of price growth for American consumers.

Yale University’s The Budget Lab predicted 2025 tariffs will cause U.S. prices to rise 2.3 per cent in the short-term, the equivalent to a US$3,800 loss per household.

The report said clothing and textiles will be disproportionately impacted, with apparel prices surging 17 per cent, but goods like metals, electrical equipment and rice could see hefty price increases as well.

Canadian consumers won’t be immune to the pain of higher prices, and they aren’t just going to be placed on American goods with tariffs, Hejazi warned.

• Bank of Canada April rate cut in play as job market weakens
• Canada dodged tariff slamdown, but recession still coming

“When American products become more expensive, Canadian companies raise their prices as well,” Hejazi said, adding that the longer we experience sustained inflation , the harder it can be to bring it under control.

“The challenge is that we’re probably going to see prices rise gradually and it’s going back to that self-fulfilling (prophecy) and inflationary expectations becoming entrenched.”

• Email: slouis@postmedia.com

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