Canada’s second round of retaliatory tariffs against the United States takes effect at 12:01 a.m. Monday, Sept. 8, applying duties of 15, 25 and 50 per cent to $27.6 billion worth of American goods — and a Bank of Canada study of the country’s last tariff fight offers the clearest picture yet of what that will mean for the price tags Canadians see this fall.
The countermeasures, announced Aug. 25 by Finance Minister François-Philippe Champagne, match the U.S. tariffs dollar for dollar after Washington imposed a 50-per-cent duty on $27.6 billion of Canadian exports under Section 338 of the U.S. Tariff Act, according to the Department of Finance. Roughly 700 to 900 tariff line items are affected, concentrated in steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, furniture and electronics — the sectors the department says were hit hardest by the American measures. Only goods that qualify as U.S.-origin under Canada-U.S.-Mexico Agreement marking rules are covered, and shipments already in transit on Sept. 8 are exempt.
Ottawa paired the tariffs with a $7.5-billion support package for affected workers and businesses, including a $3.5-billion rapid-response fund tied to Employment Insurance changes, a $2-billion Canada Strong Diversification Fund for tariff-hit companies, and an expanded Large Enterprise Tariff Loan facility, the government said.
What officials have described only in general terms — that the impact on consumers is expected to be moderate — the Bank of Canada has already measured in granular detail from Canada’s first round of counter-tariffs. In a research paper published in May, Bank of Canada economists Alberto Cavallo, Olena Kostyshyna, Oleksiy Kryvtsov and Matías Vieyra tracked daily online prices for more than 110,000 products at seven major Canadian retailers between February and December 2025, a period spanning Canada’s 25-per-cent counter-tariffs, which were imposed that March and lifted six months later.
They found that prices of tariffed goods climbed gradually, reaching about six per cent above comparable non-tariffed products by mid-June 2025 — meaning roughly one-quarter of the 25-per-cent tariff was passed on to shoppers, adding an estimated 0.3 percentage points to headline inflation. When Ottawa lifted most of those tariffs on Sept. 1, 2025, the price gap reversed almost as quickly, falling back near pre-tariff levels within about three months, particularly for groceries and appliances, the researchers found.
The study also found that how retailers labelled the increases mattered nearly as much as the tariffs themselves. Products displaying a “Tariffed” banner on retailer websites saw larger and faster price hikes than identical tariffed products without one, a pattern the authors attributed to retailers using visible signage to shift blame for the increase away from themselves and reduce the risk of customer backlash. Pass-through wasn’t driven solely by Canada’s own tariff decisions, either: prices on already-tariffed goods jumped as much as 10 per cent within days of the United States announcing sweeping new global tariffs in April 2025, a move that added no new Canadian counter-tariff but signalled to retailers that the dispute would run longer than they had assumed.
That last finding carries a specific implication for the round beginning Monday. The 2025 measures had a defined start and, ultimately, a defined end after six months. Ottawa has attached no expiry date to the tariffs taking effect Sept. 8. If retailer behaviour follows the pattern the Bank of Canada documented — passing through more cost the longer a tariff is expected to persist — an open-ended dispute could produce price increases that prove more durable than the largely temporary bump recorded in 2025, when costs unwound within months of the tariffs’ removal. That distinction has not featured in coverage of the Sept. 8 measures to date, even as the same dynamics the Bank studied last year are positioned to repeat.
Via The Globe and Mail, with additional detail from the Department of Finance Canada and the Bank of Canada’s May 2026 Sparks at Bank research.
