About six months ago, Canadian shoppers had braced for prices to soar after the Trump administration first slapped tariffs on a range of Canadian imports and Canada responded with counterlevies.
Some things have undoubtedly gotten more expensive, but not all the price spikes have been as high as anticipated, while some prices have held steady or fallen.
Kitchen and bathroom appliances, furniture, cars, beer and canned goods saw the biggest price spikes in the months after U.S. President Donald Trump slapped 25- to 50-per-cent tariffs on a range of Canadian imports starting this spring and Canada retaliated with 25-per-cent levies on billions of dollars worth of U.S. goods.
According to Statistics Canada data, shoppers paid 8.6 per cent more, on average, for cooking appliances such as stovetops and microwaves in May, compared to a year prior, and about 6 per cent more for laundry appliances and dishwashers. But prices for other household appliances, such as vacuum cleaners, fell about 4 per cent on average in June.
On the groceries side, prices for canned soup, caught in the crosshairs of aluminum tariffs, spiked by about 8 per cent in June. But overall grocery prices didn’t swing as dramatically that month – Canadians paid 2.8 per cent more for food year-over-year in June, compared to a 2.1-per-cent increase in 2024 and a 9-per-cent spike the year prior.
Prices for home improvement and maintenance, for which costs were expected to increase significantly because of U.S. tariffs hitting Canadian lumber, among other materials, have not surged. Prices were up about 1.6 per cent year-over-year in June.
“The Canadian economy is holding up better than people anticipated in March, and the big reason for that is simply the effective tariff on our products – it isn’t that high,” said Joseph Steinberg, a University of Toronto professor who specializes in international economics and trade policy. “Aside from steel and aluminum, the vast majority of our trade is tariff-free.”
In June, Canada’s effective tariff rate was around 2.4 per cent, he said. Pressures were offset by companies able to trade goods freely through the United States-Mexico-Canada Agreement – something that was still uncertain in March – as well as government subsidies and remissions.
Steel and aluminum were exceptions, as they face separate sectoral tariffs from which no exemptions exist. These tariffs rose from 25 per cent to 50 per cent in June, leading to steep drops in those exports.
Canadians have likely seen most price jumps on goods resulting from U.S. tariffs on global trade partners, which have trickled down to the Canadian consumer, rather than Canada’s counterlevies, said François Neville, professor of strategic management at McMaster University’s DeGroote School of Business.
American appliances, which also fell in the crosshairs of Canadian retaliatory tariffs, are an exception to a degree. But even in this category, the consequences of U.S. tariffs on suppliers in places such as Asia and Europe have played a hand in putting pressure on prices in Canada.
“With appliances, for instance, a lot of these are being manufactured in the U.S. ... but they’re importing steel and aluminum and rare earths or derivative products, and having to pay a slight price increase for importing those [as] there’s not really an alternative supply,” said Mr. Neville. “The downstream effect is essentially that the price of those products is increasing, both for American consumers and Canadian consumers.”
In the alcohol category, prices increased about 2.6 per cent year-over-year in June, with beer prices rising faster than inflation and spiking more than 4 per cent in licensed establishments and by 3.6 per cent at stores.
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Brewers have deliberately spread price hikes from the past 18 to 24 months over a longer period, meaning older inflationary pressures are still feeding into current prices, said CJ Hélie, president of Beer Canada. An additional factor potentially contributing to cost pressures was a 2-per-cent federal beer tax hike on April 1.
But the biggest strain is coming from packaging costs. A 50-per-cent aluminum tariff along with the threat of future tariffs has pushed the benchmark price for this metal paid by manufacturers up by 200 per cent since January, said Mr. Hélie. Brewers use 3.7 billion aluminum cans annually, and while some had stockpiled or secured long-term contracts, those buffers are now running out.
The pressure on aluminum producers is also pushing up prices for products such as canned soup, said Andrew Barclay, economist and senior analyst in the Consumer Price Division of Statistics Canada.
Significant price spikes on the food side from countertariffs haven’t yet materialized, likely due to seasonality and supply.
For example, cucumber prices declined by 18.3 per cent in June year-over-year. “Cucumbers are tariffed but domestic supply was really good this year,” said Mr. Barclay.
That said, higher prices for passenger vehicles, clothing and footwear are weighing on the consumer price index, and can likely be attributed to U.S. tariffs, he said.
“In the case of new cars, steel and aluminum tariffs are putting upward pressure on prices, which might then be passed along to consumers,” he said.
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Overall auto prices jumped 4.1 per cent year-over-year in June. In comparison, the purchase of passenger vehicles index – which measures shifts in pricing for new and used cars – fell 0.4 per cent during the same time last year.
Still, prices paid by consumers have not always spiked as sharply as anticipated in March and the Canadian economy is faring better than expected.
Two major factors have kept things relatively in check, said Mr. Steinberg: a roughly 10-per-cent appreciation of the Canadian dollar since January, putting downward pressure on the price of imports, and falling oil prices, which lower transportation costs.
Home improvement costs may also be holding relatively stable due to a slowdown in the Canadian housing market reducing demand, he said.
Countertariffs also have been rescinded or watered down, said Mr. Steinberg. “The government recognizes that countertariffs are harmful. But also they play well politically.”
But companies’ stockpiling efforts earlier in the year across a range of industries – from breweries to auto manufacturers – may also be delaying the steepest tariff impacts. As tariff-free inputs are used up, costs will likely climb significantly.
Mr. Hélie recalls saying around March that if tariffs persisted at those levels by Labour Day, Canadian consumers and businesses were in serious trouble. “Well, it’s about Labour Day and it hasn’t sorted out.”