Rob Breakenridge: Carney must be honest about the cost of counter-tariffs

Prime Minister Mark Carney speaks during a press conference addressing the trade situation with United States in Ottawa on Saturday, Aug. 22, 2026. Photo by HYUNGCHEOL PARK /Postmedia

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As Canada absorbs the impact of freshly-implemented U.S. tariffs and braces for the impact of the soon-to-be-implemented counter tariffs, the Carney government is showing some signs that it’s not completely oblivious to all of the costs piling up for Canadian consumers and businesses.

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It would be hard to deny that a trade war is a bad time to impose new costs on Canadians and it’s encouraging to see the government acknowledge this. Unfortunately, that logic only extends so far.

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Earlier this week, the finance minister announced that the federal gasoline tax will not be re-imposed on Labour Day, as was previously planned. Instead, the tax holiday will be extended until the end of January, followed by a brief period of half the tax and full reinstatement on April 1, 2027.

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François-Philippe Champagne says the government has flexibility, thanks to a resilient national economy and the additional government revenue generated by higher oil prices.

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It remains to be seen just how resilient the economy will prove to be, especially in the face of a worsening and potentially prolonged trade dispute. Friday’s latest jobs report showed an unexpected loss last month of 42,000 jobs in the economy, so things may be a little more precarious than the government would like to admit.

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Furthermore, while indeed higher oil prices have boosted government revenues, that’s very much a double-edged sword as that has also meant much higher costs for consumers. So while the gas tax holiday has provided some relief, it would have been quite a double-whammy to re-impose that tax just as new counter tariffs are kicking in.

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Champagne’s announcement Wednesday coincided with the latest interest rate announcement from the Bank of Canada. While the bank’s benchmark rate is holding steady for now, Governor Tiff Macklem warned of a rising inflation risk, thanks to higher energy costs and the tariffs and counter tariffs spawned by this Canada-U.S. trade dispute.

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It’s hardly breaking news that, as noted in the government’s press release, “affordability remains top of mind for families and businesses across the country.” In actuality, that’s been the case for quite some time now, even if this government is late to the party.

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An affordability agenda, therefore, would certainly be welcome. The problem, though, is that this government’s agenda — scant as it is — is undermined by its own tepidness and by their own trade strategy.

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In the government’s defence, the skyrocketing price of oil — and, by extension, gasoline and diesel — is due in large part to circumstances very much outside of their control. Furthermore, we didn’t ask for this trade war (even if it’s not entirely clear what led to this most recent breakdown in talks). We were content to live under the terms of CUSMA, and these new and unjustified U.S. tariffs arguably warranted some response.