These are the places most vulnerable to U.S. tariffs
While tariffs on steel, aluminum should have only a modest effect, economists say auto threat could be severe
As Canada's retaliatory tariffs on billions of dollars worth of American goods come into play, the immediate effect of the escalating trade dispute on the Canadian economy is expected to be small, economists say.
"About 0.8 per cent of annual Canadian output is affected by these [U.S.] tariffs," Brian DePratto, senior economist at TD Economics, wrote after U.S. President Donald Trump imposed new tariffs on Canadian steel and aluminum on June 1.
"As such, these tariffs are likely to have a very minor direct effect on economic activity, jobs and consumer price inflation."
But the good news stops there, because in North America's interconnected economy, it's not just the producers of steel and aluminum that will feel the brunt.
It's also manufacturers who make things of steel and aluminum, and potentially the auto industry, where Trump has threatened more tariffs.
As DePratto warned, the impact may lower business confidence and result in reduced investments.
The CBC asked several economists and industry associations which jobs would most affected by the tariffs, then mapped where these jobs are concentrated, resulting in a picture of job losses across the country.
These maps don't show how many jobs will be lost, but where jobs could be at risk if a trade war with the U.S. persists.
Mining and aluminum jobs are mostly safe
According to economists, metal ore mining jobs have the smallest risk of being affected by the tariffs, since mining doesn't rely heavily on U.S. buyers.
"Mining is more internationally exposed. It's a global commodity, so there's some buffering there," DePratto said.
Metal mining also employs a low number of people: About 42,000. Most jobs are concentrated in the greater Sudbury area, the central Ontario division of Cochrane, and in western Quebec, around Val d'Or.
But the single biggest share is in Labrador, where 12.5 per cent of all jobs are in metal mining, according to census data analyzed by CBC.
What is a census division?
A census division is a group of neighbouring municipalities that share services like police and ambulance. For example, the census division of Peel in Ontario includes Brampton, Mississauga and Bolton. Division No. 3 in Manitoba includes Carman, Morris, Morden and Altona. More details here.
Things get a little riskier for aluminum manufacturers, but not terribly so. Canada has an abundant and low-cost supply of aluminum and U.S. production is already at capacity, so Canadian aluminum will continue to be needed by U.S. customers.
"Aluminum has a low demand elasticity," said Dan Ciuriak, an economist and fellow-in-residence with economic think-tank the C.D. Howe Institute. "The quantity sold will be more or less the same."
Steel manufacturing at greatest risk
The biggest risk is for manufacturers who make steel and steel-based materials, since it's a far more competitive industry and steel and metal components can cross the border several times before being made into final product.
"Anyone who uses steel and aluminum is affected," said Dennis Darby, of Canadian Manufacturers & Exporters. "If you source components from the U.S. that use steel and aluminum you'll be hit with a tax."
That's because Canada's retaliatory tariffs would have to be paid on U.S. steel components.
The largest concentration of manufacturing jobs that use steel are in the southern tip of Ontario, in a corridor stretching from Windsor to Guelph. In the census division of Oxford, which includes Woodstock and Ingersoll, 23.5 per cent of jobs are in metal manufacturing.
The manufacturing belt in Eastern Quebec, especially the Beauce region, is also highly exposed.
But Darby says the effect of tariffs will be felt all over.
"There are companies in Atlantic Canada that make tires and they source steel wires. In the West and the Prairies, there are bus and ambulance makers that use steel," he said.
Ciuriak believes that non-residential construction is also at risk, since it's a big user of steel. The CBC reached out to the Canadian Construction Association for comment, but they said they are still discussing a response.
In all, 3.2 per cent of jobs in Canada are exposed to these tariffs.
Auto tariffs: the real danger
Of greater concern are Trump's threats to slap a 25 per cent tariff on cars and auto parts, although no moves have yet been made to enact them. But if they go through, it would wreak real damage on the economy.
"It's a highly integrated industry. The consequences are more severe," DePratto said. He predicts that one in five manufacturing jobs in Ontario could be at risk.
A car part can cross the border several times during its production cycle before it's assembled into a vehicle. Ciuriak said that even a six per cent tariff would be enough to make a car maker move closer to the supplier, much less 25 per cent.
"That would destroy North American integration on autos. We would produce to the Canadian market a smaller range of brands and the U.S. would replace Canadian imports," Ciuriak said.
But the shockwaves would reach far beyond the auto sector. Other manufacturers supply auto companies, anything from packaging material to glassmakers to die casting. The entire manufacturing sector of Canada, which employs 1.8 million people, could be affected.
Economists, however, are optimistic that these trade disputes can be resolved in NAFTA negotiations to avoid long-term damage. Industry associations also reacted positively with the $2-billion pledge by the federal government to compensate the manufacturing sector for losses, which is meant to reduce job losses.
"It's too early to predict what the impact of these tariffs will be," Darby said. "But already some of our members who make steel products say they're facing pressure from U.S. customers."
The number of jobs per industry were taken from the 2016 census, specifically this data table. To calculate jobs that are vulnerable to steel and aluminum tariffs, CBC isolated the following industries:
- Metal ore mining
- Primary metal manufacturing
- Fabricated metal manufacturing
- Machinery manufacturing
- Transportation equipment manufacturing
- Non-residential building construction
- Heavy and civil engineering construction
- Foundation, structure, and building exterior contractors
For the jobs exposed to potential auto tariffs, all jobs in manufacturing were factored in.