Good morning. Houses, cars and pharmaceuticals are about to get pricier south of the border – more on that below, along with the latest from the election campaign and baseball’s newest sensation. But first:
Today’s headlines
- A lobbyist and former Ford aide broke the rules with Greenbelt clients, Ontario’s ethics watchdog says
- Carney and Singh announce housing plans, while Poilievre pledges to fast track resource projects
- United Nations report recommends Canada repeal MAID for people without terminal illnesses
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These cars are going to cost Americans more.Carlos Osorio/Reuters
Trade war
The price of protectionism
Donald Trump’s sense of the cost of his trade war seems to change as often as the schedule itself. First, the U.S. President promised Americans that “tariffs don’t cause inflation.” Then, he acknowledged that “prices could go up somewhat short term,” but they’d “also go down.” Last month, in his address to Congress, Trump admitted “there’ll be a little disturbance, but we’re okay with that.” After all, Treasury Secretary Scott Bessent insisted, “access to cheap goods is not the essence of the American dream.”
Perhaps that will come as some reassurance to U.S. consumers – because they’re certainly about to pay more for their goods. Trump’s sweeping tariffs on Canadian imports will raise American prices on pretty much everything, but the cost of homes, pharmaceuticals and cars could be hit especially hard. So on the eve of Trump’s “Liberation Day,” when he intends to impose reciprocal tariffs on his trading partners, let’s take a closer look at that sticker shock.
Trump’s claim: “We don’t need their lumber. We have massive fields of lumber.”
The catch: This is pulp fiction on Trump’s part. Roughly a third of the lumber used to build U.S. homes comes from our side of the border. That’s because – not to brag – Canadian softwood lumber is objectively better than much of the U.S. stuff. Cut down our spruce, fir or pine trees and you’ll find tight growth rings inside, preferred by home builders for higher-quality boards. Nails and screws go through them easily, and the wood’s durability means walls stay up straight. By contrast, U.S. southern yellow pine has wider growth rings, so it tends to warp and split. Forestry expert Russ Taylor likens the contrast in lumber quality to the difference between Canadian and U.S. beer, which we can all agree is “average, pretty watery and kind of boring.”
The cost: Currently, the U.S. imposes 14.5-per-cent duties on most Canadian softwood products; an additional 25-per-cent levy could be on its way. According to one leading U.S. trade group, lumber tariffs will drive up the average price of an American home by about US$4,900. The country’s National Association of Home Builders estimates that for every $1,000 increase in the median cost of a new home, about 106,000 potential buyers are priced out of the market.
Look at those tight growth rings.Jesse Winter/Reuters
Trump’s claim: “We have to bring drugs and pharmaceuticals back into our country.”
The catch: Trump’s proposed tariffs on pharmaceuticals will likely cause drug shortages in the States. New research in the Journal of the American Medical Association identified dozens of Canadian-made drugs that could be scarce in the next year or two, including antibiotics, antidepressants and HIV treatments.
The cost: Drug prices are already staggeringly high in the U.S., mostly because pharmaceutical companies have enormous leverage to charge whatever the market will bear. The most recent report from Canada’s drug regulator found that prices were about 3.6 times higher in the U.S. than in Canada. Tack on a 25-per-cent tariff, and Americans would pay an additional US$750-million on Canadian-made drugs each year.
Trump’s claim: He “couldn’t care less” about the prospect of higher car prices.
The catch: No catch here – we can take him at his word, because tariffs will definitely cause Americans to shell out more for their vehicles, and Trump is going ahead with them anyway. By the end of this week, there could be four layers of tariffs on Canada’s auto industry: the existing 25-per-cent levy on steel and aluminum; an additional 25-per-cent tax on car parts made outside the U.S.; the end of the one-month reprieve on 25-per-cent levies for USMCA-compliant goods; and whatever reciprocal tariffs go into effect tomorrow.
The cost: Depending on the model, senior BMO analyst Erik Johnson puts the price hike on a new vehicle between $3,000 and $10,000. That’s going to be felt by a whole bunch of people – about 16 million Americans buy a new car every year. Roughly 38 million used cars also change hands annually, and Trump’s tariffs will increase the cost of insurance, auto repairs and replacement parts. So when can U.S. consumers expect to pay up? While it could take months for tariff costs to work their way through the auto supply chain, dealerships will likely start raising their prices much sooner in anticipation of the jolt.
Election 2025
‘Canadians really want to kick the tires of both of these leaders.’
Carney and Poilievre out and about this month.The Canadian Press/ Getty Images
Two-thirds of Canadians would like Conservative Leader Pierre Poilievre to get security clearance, a new national poll has found, and nearly as many think that Liberal Leader Mark Carney should disclose the investments he put in a blind trust. Meanwhile, on the trail yesterday, Poilievre ducked questions about the turmoil in his election campaign, while Carney stood by Paul Chiang, the Liberal candidate who called for his Conservative opponent to be turned over to the Chinese consulate. Late last night, Chiang resigned. You can catch up on Day 9 of the election campaign here.
The Wrap
What else we’re following
Abroad: The UN says that Israeli troops killed 15 Palestinian medics and emergency responders “one after another” and buried them in a mass grave.
At home: Despite a recent court injunction, the Ontario government intends to close nine supervised consumption sites today as planned.
Off the ballot: France’s far-right leader Marine Le Pen has been convicted of embezzlement and barred from seeking public office for five years.
On the shelves: Hudson’s Bay might be facing liquidation, but you won’t find a deal on high-end perfume or beauty products.
At the plate: Thanks to a recent Yankees slugfest, “torpedo bats” are baseball’s newest sensation – but Cathal Kelly says they have all the hallmarks of a passing fad.