What a CUSMA Breakdown Would Do to Your Paycheque

A CUSMA breakdown would strip 102,000 jobs out of the Canadian economy and cost roughly $271 billion Cdn in lost output by 2035, according to a report Oxford Economics prepared for the Canadian American Business Council and released Monday. The same scenario costs the United States 214,000 jobs and $1.04 trillion US. That trillion-dollar figure in the headlines is American, not Canadian — worth knowing before you assume the worst number belongs to us.

The part that reaches your bank account is quieter. Under the collapse scenario, the study projects faster inflation in both countries and weaker growth in real disposable income, with Canada taking the harder hit on the income side. That is the mechanism most people will actually feel: not a layoff notice, but groceries, insurance and rent climbing while your raise doesn't keep up. Affordability was already the top-of-mind issue before any of this.

Timing is what makes the report land. Ottawa is six days out from an August 19 deadline, when Washington is set to apply 50 per cent tariffs to three fresh lists of Canadian goods. Canada–U.S. Trade Minister Dominic LeBlanc met his American counterpart, U.S. Trade Representative Jamieson Greer, on Tuesday, with chief negotiator Janice Charette also in the room. Officials have been aiming to put something in front of President Donald Trump by Monday.

Where the $271 Billion Figure Comes From

Oxford Economics modelled three futures rather than one: today's tariffs continuing indefinitely, the agreement falling apart, and a renegotiation that actually works. The job and output numbers are measured against that status-quo baseline, so they sit on top of damage already done. The GDP losses are cumulative to 2035, not a single bad year — a decade of slower factories, thinner investment and supply chains rerouting around Canada.

The upside case is the more useful half of the study. A successful renegotiation would add 137,000 American and 98,000 Canadian jobs in 2027 compared with leaving things as they are, plus stronger disposable income and slower price growth. Read together, the two scenarios describe a swing of roughly 200,000 Canadian jobs between the best and worst outcomes of the same set of meetings.

A CUSMA Breakdown Would Hit These Provinces Hardest

The pain is not spread evenly across the country. The report singles out manufacturing regions on both sides of the border, which is a polite way of saying a handful of towns absorb the damage while national averages barely move.

Ontario, Quebec and New Brunswick

Ontario and Quebec carry the country's manufacturing base and show up as the most exposed, with New Brunswick also flagged as highly vulnerable — a reminder that a small province with concentrated wood, paper and food processing can be hurt as badly in percentage terms as a big one.

Cement, Paper, Plastics and Auto Parts

Sectors named include autos, wood products and metal products, along with cement and concrete, paper products, computers and electronics, plastics and rubber. These are mid-supply-chain industries, the ones that ship components across the border several times before anything is finished. Each crossing is a chance to be taxed.

Iowa, Michigan, Kentucky and Alabama

American exposure clusters in Iowa, Michigan, Kentucky and Alabama. That detail is the Canadian American Business Council's actual lobbying point: the states that lose factory work are politically useful ones, which gives Ottawa an argument to make in Washington rather than only in Ottawa.

Why 5% of Exports Isn't a Small Number

The August 19 lists cover things that sound trivial — honey, plywood, hyacinth bulbs — alongside dairy, alcohol, clothing, finished wood and paper goods, vehicles and parts, and hockey sticks. Economists at BMO, CIBC and TD peg the coverage at about 5 per cent of Canadian exports to the U.S., or roughly $30 billion in goods, with something near 100,000 jobs exposed to layoffs or cut hours, Global News reported.

It means real jobs and security and stability [lost] at a time where affordability is front and centre, said Beth Burke, chief executive of the Canadian American Business Council.

The Job Market This Would Land On

Context matters here. Canadian manufacturing has already shed about 61,000 positions since its January 2025 peak, and unemployment sat at 6.5 per cent in June. The projected 102,000 losses from a collapse would therefore exceed everything factories have lost in the past year and a half, arriving on a labour market economists have been calling static rather than healthy.

Statistics Canada's 2024 estimate puts the dependence in perspective: American demand supported 12 per cent of all Canadian employment, but 41 per cent of manufacturing jobs — and more than two-thirds in autos and aluminium. One in eight Canadian jobs traces back to a U.S. customer. Washington declined to extend the deal on July 1, starting the review clock while its tariffs stayed on.

What to Watch Before August 19

Watch three things this week: whether LeBlanc's talks produce something Trump signs off on by Monday, whether the 50 per cent lists shrink before they take effect, and whether the sectoral tariffs on autos, steel and lumber get folded into any deal. If you export, confirm your rules-of-origin paperwork is current so qualifying shipments stay duty-free. If you work in an exposed plant, ask now whether your employer has looked at work-sharing arrangements — those applications take weeks, not days.