Good Morning<\/p>\n\n\n\n
I’m Paul Ainslie, Deputy Mayor of Toronto, Ontario \u2014 Canada’s largest city, a major financial hub, and one of the most trade-exposed urban economies on this continent. We have a large industrial base, a significant port, and deep supply chain ties to the United States. And that is precisely why I want to speak this morning, because the trade war is not only a story about bilateral diplomacy and macro forecasts. It is showing up in our city \u2014 in our budgets, in our businesses, and in conversations I’m having with residents and employers who are worried about what comes next.<\/p>\n\n\n\n
Let me ground this in what the data actually tells us, because we need to walk away from this conversation with a clear, credible case to bring to our federal partners.<\/p>\n\n\n\n
Start with the macroeconomic picture. The Bank of Canada has been direct: Governor Macklem stated that a long-lasting trade war poses the greatest threat to the Canadian economy, warning of reduced growth and increased unemployment. RBC Economics has confirmed that the impact is geographically concentrated \u2014 GDP growth in Ontario and Quebec is expected to be at the bottom of all provinces in 2026. That is us. That is this room.<\/p>\n\n\n\n
As of this April, the landscape remains volatile. While CUSMA-compliant goods remain exempt, our businesses are navigating a minefield of tariffs: 25 percent on automobiles and parts, 35 percent on softwood lumber, and 50 percent on steel and aluminum. Even small-scale trade is under fire, as goods valued under $800 that previously qualified for de minimis exemptions are now subject to full duties.<\/p>\n\n\n\n
Scotiabank Economics has tracked the trade diversion in real time. The share of Canadian exports bound for the U.S. declined from 76 percent in 2024 to 72 percent in 2025, while exports to other regions \u2014 particularly Europe \u2014 rose significantly. That diversification is a rational business response, but it does not come for free. Reorienting decades of supply chain integration requires new infrastructure, new logistics relationships, and new capital. As Canada’s primary gateway for trade in services and financial flows, Toronto feels that adjustment cost acutely \u2014 and the businesses absorbing it are the same employers our residents depend on.<\/p>\n\n\n\n
At the municipal level, the impacts are concrete. The Association of Municipalities of Ontario, working with Oxford Economics, estimated that tariffs could increase infrastructure costs by over $1 billion on nearly $50 billion in planned municipal expenditures across Ontario over the next two years \u2014 a 2.1 percent cost increase on every road, water system, and public building we are trying to build.<\/p>\n\n\n\n
For a city already managing one of the most ambitious capital plans in North America, that means harder choices. But in Toronto, we aren’t just waiting for the dust to settle; we are acting. Through our US Response Secretariat, we\u2019ve launched a suite of relief measures to keep our industrial base competitive:<\/p>\n\n\n\n
This brings me to the CUSMA\/USMCA joint review \u2014 the most important trade policy moment our two countries will have this year. While we work toward the July 1st deadline to confirm the scope of this review, we are hearing from the U.S. that negotiations may extend further, potentially shifting toward separate arrangements with Canada and Mexico.<\/p>\n\n\n\n
Local governments cannot negotiate trade agreements, but we are the ones who absorb the consequences when they fail. Toronto’s size gives us a platform, and we intend to use it. Through initiatives like TradeTO, we are helping our businesses double non-US exports over the next decade, ensuring that while we value our Great Lakes partners, we are never again so vulnerable to unilateral protectionism. Our federal partners need to understand that trade instability has a municipal price tag \u2014 and in a city of three million people, that price tag is very large.<\/p>\n\n\n\n
Thank you, Merci Beaucoup, Chi Migweetch!<\/p>\n\n\n\n
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Good Morning I’m Paul Ainslie, Deputy Mayor of Toronto, Ontario \u2014 Canada’s largest city, a major financial hub, and one of the most trade-exposed urban economies on this continent. We have a large industrial base, a significant port, and deep supply chain ties to the United States. And that is precisely why I want to … <\/p>\n