Trump’s Tariff Threat: Layoffs and Employee Rights in Canada
In an unexpected move, U.S. president-elect Donald Trump announced plans to impose a 25 per cent tariff on all Canadian goods.
The bombshell announcement, made on social media platform Truth Social, has sparked outrage across Canada—with Ontario Premier Doug Ford calling it “like a family member stabbing you right in the heart.”
Trump’s proposed tariff, which would also target Mexican goods, is tied to his demand for stricter border controls.
“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country,” Trump declared in his post.
He added that both Canada and Mexico must address these issues or face severe economic consequences: “It is time for them to pay a very big price!”
Speaking to reporters at Queen’s Park, Ford warned that Trump’s tariff poses a “huge threat” to Ontario’s economy, which trades $493 billion annually with the U.S.
He highlighted the deep integration of the province’s auto sector—where parts often cross the border multiple times before final assembly.
Ford called the tariff “very hurtful to Canadians and Americans” and urged the U.S. to reconsider.
“To compare us to Mexico is the most insulting thing I have ever heard from our closest allies,” he added.
Key responses to Trump’s tariff threat
Prime Minister Justin Trudeau:
- Called for a “Team Canada approach” to tackle the tariff challenge.
- Described a “good call” with Trump, focusing on the deep trade connections between Canada and the U.S.: “We obviously talked about laying out the facts… [and] the intense and effective connections between our two countries.”
British Columbia Premier David Eby:
- Warned that the tariffs “would hurt Canadians and Americans alike.”
- Called for unity: “Canadians must stand united. Ottawa must respond with strength.”
Alberta Premier Danielle Smith:
- Acknowledged the need for improved border security.
- Stressed that Alberta’s energy exports are “delivered through secure and safe pipelines,” unrelated to illegal activities.
Conservative Leader Pierre Poilievre:
- Condemned Trump’s threat as “unjustified” and criticized Canada’s economic vulnerabilities.
- Called for measures to strengthen Canada’s economy: “Axing taxes, unleashing free enterprise, and having a massive boom in our energy and resource production.”
- On potential retaliation: “If necessary.”
Economic fallout and risks
Economists are sounding the alarm about the broader implications of Trump’s tariff.
Randall Bartlett, senior director of Canadian economics at Desjardins, told CBC News that a 25 per cent tariff would likely push Canada’s economy to the brink of a recession.
Ontario, the province most reliant on U.S. trade, is expected to bear the brunt of the impact.
Key industries at risk from Trump’s tariffs include:
- Auto manufacturing
- Energy exports
- Manufacturing
- Agriculture
- Forestry
- Technology and electronics
What Canadian employees need to know about layoffs
Economic disruptions from tariffs often lead to layoffs, leaving many employees uncertain about their rights.
If Trump’s tariff causes job losses, here’s what Canadian employees need to know:
-
- Terminations: Losing your job due to tariffs is considered a termination without cause. Employers can’t claim termination for cause, which applies only to serious workplace misconduct.
- Severance pay: Laid-off employees are entitled to a severance package, even for economic reasons. Severance can be as much as 24 months’ pay, depending on factors like position, length of service, and age.
- Temporary layoffs: Temporary layoffs are illegal unless approved by the employee or explicitly allowed in the employment contract. Otherwise, temporary layoffs are treated as terminations, making you eligible for severance.
Crunch The Numbers: Use Canada’s Severance Pay Calculator to find out how much compensation you may be owed.
How to protect your rights
If you’re laid off due to tariffs or other economic factors:
- Review your severance package: Severance offers often fall short of what you are legally owed. Use tools like the Pocket Employment Lawyer to estimate what you’re owed.
- Seek legal advice: An employment lawyer at Samfiru Tumarkin LLP can help you understand your rights and negotiate a better severance deal.
- Document everything: Keep records of your layoff and related communications.
How we can help
Trump’s tariff announcement has created significant uncertainty for Canadian workers. If layoffs occur, employees have rights that protect them during this difficult time.
If you’ve been laid off or fear job loss, contact the experienced employment lawyers at Samfiru Tumarkin LLP.
Our employment lawyers for Ontario, Alberta, and B.C. can help ensure you receive the full compensation you deserve.
About the Author
Lior Samfiru
Lior Samfiru is a Founding Partner at Samfiru Tumarkin LLP and the Practice Leader of the firm’s Labour & Employment Law Group. Known for his advocacy and success representing both employees and employers, Lior exclusively serves clients in Ontario, where his extensive experience has made him one of Canada’s most sought-after employment lawyers.
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