Atlantic Canada & Prairies To Be Hit Hardest by Trade War, & Toronto’s Bear Market

Atlantic Canada and the Prairie provinces are facing significant economic challenges due to escalating trade tensions and a downturn in Toronto's housing market. Recent retaliatory tariffs from China, responding to Canada's earlier levies on electric vehicles and metals, have targeted key sectors like agriculture and fisheries. This has particularly impacted regions heavily reliant on exports.

In Atlantic Canada, provinces such as New Brunswick and Prince Edward Island are experiencing severe repercussions. New Brunswick Premier Susan Holt has projected potential job losses ranging from 4,000 to 6,000, especially in industries like forestry, seafood processing, and food manufacturing. citeturn0search0 The province has introduced a $162-million "tariff action plan" to support affected businesses. citeturn0search4 Similarly, Prince Edward Island's potato industry, which exports about half its crop to the U.S., is under threat, raising concerns about the broader economic impact.

The energy sector in Atlantic Canada is also under strain. The Atlantica Centre for Energy has highlighted the deep integration between Atlantic Canada's energy systems and those of New England. With 80% of vehicles in New England relying on Canadian-refined fuel and significant electricity exports from New Brunswick to northern Maine, the imposed tariffs are expected to disrupt this symbiotic relationship, leading to higher energy costs and potential supply issues.

In the Prairie provinces, the agricultural sector is bearing the brunt of the trade war. China's tariffs have targeted Canadian agricultural exports, affecting farmers and related industries. While the immediate financial impact might seem limited, experts warn of significant secondary effects that could destabilize local economies, drawing parallels to the 2019 canola trade dispute.

Meanwhile, Toronto's housing market has entered a bear phase. The average home price dropped by 0.5% to $1,068,500 in March, marking the first decline since October. This downturn is attributed to weak sales and a surge in inventory, with active listings rising by 35.5% compared to the previous year. The sales-to-new-listings ratio has fallen to 28%, indicating a buyer's market and suggesting further price declines ahead.

These developments underscore the interconnectedness of global trade dynamics and local economies. As Atlantic Canada and the Prairies grapple with the fallout from international trade disputes, and Toronto contends with a cooling housing market, the broader Canadian economy faces a period of uncertainty and adjustment.