Since August 22, 2026, the United States has been applying tariffs of up to 50% on billions of dollars of Canadian products, and Canada is retaliating on September 8. You don't export steel or lumber, but the question is still the right one: does this reach your pay? It does, through three routes — and only one of them really depends on the sector you work in.

A tariff is not a deduction on your pay

A tariff is a tax collected at the border on an imported product. It is paid by the company bringing the goods into the country, at the moment they arrive. Not by the employee receiving a paycheque.

That is the first thing to know, because it settles a lot of others: no line on your pay stub changes because of the tariff war. Federal tax, Quebec tax, the QPP (the public pension plan), the QPIP (the parental insurance plan) and Employment Insurance are all calculated on your salary, at rates set by Quebec City and Ottawa. A tariff enters none of those calculations.

What does move sits downstream: the prices you pay, the hours you are given, and how solid your job is.

Prices: roughly 6% more on targeted goods

When a tariff hits a product, the retailer has a choice: absorb the increase in its margin, or pass it on to the customer. In practice it does some of each — economists call this pass-through.

The order of magnitude has now been measured. Comparing day-to-day posted prices at seven major Canadian retailers, a Bank of Canada study finds that prices of goods hit by counter-tariffs rose gradually to a peak of about 6% after three months. In other words, roughly a quarter of a 25% tariff ended up on the price tag.

Two useful nuances for your budget. First, untargeted products barely moved: switching brand or country of origin remains a real lever. Second, the effect reversed quickly once tariffs were removed — a tariff increase is not baked into the price forever.

Is your sector exposed?

This is where the answer stops being general. U.S. tariffs do not hit the economy as a block: they target specific products, at very different rates. The Department of Finance publishes its own account of Canada's tariff responses, and here is where the main employing sectors stand.

Targeted products U.S. tariff What it means for an employee
Steel and aluminum 50% American orders cost the buyer far more: slower shifts, hiring freezes
Steel and aluminum derivative products 25% Hits processing and equipment manufacturing
Semi-finished copper and derivatives 50% Smelters, wiring, electrical products
Vehicles and parts that are not CUSMA-compliant 25% Assembly lines and parts makers, deeply tied to the U.S. market
Timber and softwood lumber 10% Comes on top of anti-dumping duties already in force on lumber
Upholstered wood furniture, kitchen cabinets, vanities 25% Furniture and cabinet plants, often in smaller regions
Advanced semiconductors 25% High-end electronics
Other goods that are not CUSMA-compliant 10% General tariff that spares goods complying with the agreement

CUSMA is the Canada–United States–Mexico Agreement. A "compliant" product meets its rules of origin and escapes part of the tariffs; that is why two neighbouring plants can live through the same week very differently.

On the Canadian side, the response follows. The Department of Finance announced counter-tariffs of 15%, 25% and 50% on U.S. products as of September 8, 2026, together with a $3.5 billion package of rapid response supports for workers and employers. Those counter-tariffs protect Canadian jobs, but they are the ones you see at the grocery store and the hardware store: they apply to what we import.

Directly exposed: you make the targeted product

Metalworking, sawmills, cabinet and furniture plants, auto parts, smelters. The signal to watch is not the news, it is the order book: shifts cut, overtime disappearing, production stoppages announced week by week.

Indirectly exposed: you supply the exporters

Trucking and transport, warehousing, industrial maintenance, staffing agencies, restaurants and shops in a single-industry town. The wave arrives later, it is more diffuse, and it goes through hours before it goes through positions.

Lightly exposed: local services and the public sector

Health, education, public administration, neighbourhood services. Your job does not depend on exports; your budget still takes the price increases described above.

If your hours drop: the Work-Sharing Program

Cutting a whole team's hours instead of laying off part of the staff is a real option, and it is a structured one. The Work-Sharing Program is a three-way agreement — employer, employees and Service Canada — in which the schedule is reduced collectively and Employment Insurance pays benefits for the lost hours.

Three things to know before raising it with your employer:

  • The employer files the application, not you. An employee cannot sign up alone.
  • The duration of an initial agreement runs up to 26 weeks, with a possible extension of 12 weeks, for 38 weeks in total.
  • Special measures tied to tariffs have been extended from March 6, 2026, to March 31, 2027, which loosens the conditions during the tariff crisis.

Your income does drop, but less than if you lost the job — and you keep your employment relationship, your seniority and your group insurance. To see what your take-home pay becomes on a reduced schedule, redo the calculation rather than estimating it in your head: lower tax absorbs part of the loss, and rarely in the proportion people assume. Our piece on overtime pay rules in Quebec explains the opposite effect, when hours go up.

If you lose your job: what Employment Insurance actually replaces

Employment Insurance does not replace your salary, it replaces part of it. The basic rate is 55% of your average weekly insurable earnings, up to a ceiling. As of January 1, 2026, the maximum yearly insurable earnings amount is $68,900, which works out to a maximum benefit of $729 per week.

That ceiling is the figure people discover too late. Below $68,900 of annual salary, you do receive roughly 55% of your pay. Above it, the calculation caps out: at $100,000, the weekly $729 represents less than 38% of your usual income. The higher your salary, the bigger the gap — and tariff layoffs are hitting exactly the well-paid industrial sectors.

You are already paying for this protection: in Quebec, the employee EI premium rate is 1.30% in 2026, withheld on every pay up to the insurable maximum. If a job ends with a severance package, note that it has tax rules of its own: we cover them in the article on how severance pay is taxed.

What to do this week, depending on your situation

  • You work in a targeted sector: check your hours for the past eight weeks. A steady drop in overtime is the first signal, well before any official announcement.
  • Your hours have just dropped: ask your employer whether they have looked at Work-Sharing. Many small businesses still do not know the program exists.
  • You earn more than $68,900: work out now the gap between your current take-home pay and $729 a week. That is the amount your cushion has to cover, not your full salary.
  • You are not exposed: your issue is prices, not employment. The 6% measured applies to targeted goods, not to the whole basket — comparing origins still pays.

The net salary calculator exists for exactly this: putting a number on a scenario instead of dreading it as a whole.

Frequently asked questions

Do tariffs change the deductions on my pay?

No. A tariff is a tax collected at the border on an imported product, and the company bringing the goods in is the one that pays it. Your deductions — federal tax, Quebec tax, QPP, QPIP and Employment Insurance — are calculated on your salary, at rates set by Quebec City and Ottawa. A tariff enters none of those calculations. What the tariff war changes is the prices you pay, the hours you are given and how solid your job is.

How much do prices rise because of tariffs?

A Bank of Canada study compared day-to-day posted prices at seven major Canadian retailers: prices of goods hit by counter-tariffs rose gradually to a peak of about 6% after three months, roughly a quarter of a 25% tariff. Untargeted products barely moved, and the effect reversed quickly once the tariffs were removed.

Which sectors are hit hardest by the tariff war?

U.S. tariffs target specific products at very different rates: 50% on steel and aluminum, 50% on semi-finished copper, 25% on vehicles and parts that are not CUSMA-compliant, 25% on upholstered wood furniture, kitchen cabinets and vanities, 25% on advanced semiconductors and 10% on softwood lumber. Around those sectors, trucking, warehousing, industrial maintenance and shops in single-industry towns feel the wave later, first through a drop in hours.

What is the Work-Sharing Program?

It is a three-way agreement — employer, employees and Service Canada — that reduces the schedule collectively instead of laying off part of the staff; Employment Insurance then pays benefits for the lost hours. The employer files the application: an employee cannot sign up alone. An initial agreement runs up to 26 weeks, with a possible extension of 12 weeks, for 38 weeks in total. Special measures tied to tariffs are in force from March 6, 2026, to March 31, 2027.

How much does Employment Insurance pay if I am laid off?

The basic rate is 55% of your average weekly insurable earnings, up to a ceiling. As of January 1, 2026, the maximum yearly insurable earnings amount is $68,900, which works out to a maximum benefit of $729 per week. How long regular benefits last depends on the unemployment rate in your region and on the insurable hours you have accumulated.

I earn a high salary: will Employment Insurance be enough?

Below $68,900 of annual salary, you receive roughly 55% of your pay. Above it, the calculation caps out: at $100,000, the weekly $729 represents less than 38% of your usual income. It is a gap worth knowing in advance, especially in the well-paid industrial sectors that tariff layoffs reach first.

What can I do if my sector is targeted by tariffs?

Three concrete steps. Watch your hours: a steady drop in overtime often comes before the official announcement. Ask your employer whether they have looked at Work-Sharing, a program many small businesses still do not know. And work out the gap between your current take-home pay and the $729 weekly maximum from Employment Insurance: that amount, not your full salary, is what your financial cushion has to cover.

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