Talking Points: Cross-Border Trade

The auto industry is one of Canada’s largest manufacturing sectors and a major driver of our economy, according to the Canadian Vehicle Manufacturers’ Association. It contributes $18 billion to the country’s GDP, employs 128,000 Canadians and is responsible for a total of 550,000 direct and indirect jobs. Vehicles are the second largest Canadian export by value at $51 billion in 2023 of which 93% was exported to the US.

• In 2023, Canada, Mexico, and the US produced over 16 million cars (17.28% of the world’s total).
• Combined, Ontario and Michigan are responsible for approximately 22% of North America’s automotive output.
• Parts cross the border up to eight times before a car rolls off the line, underscoring how tightly our manufacturing sectors are woven.
• Automakers and suppliers are the US's largest manufacturing sector, historically responsible for 3 – 3.5 percent of the country’s GDP.
• 2023 estimates show the US's share in the total Canadian automotive import market stands at approximately 62%.
• The auto industry is one of Canada’s largest manufacturing sectors and a major driver of the Canadian economy, according to the Canadian Vehicle Manufacturers’ Association. It contributes $18 billion to the country’s GDP, employs 128,000 Canadians and is responsible for a total of 550,000 direct and indirect jobs. Vehicles are the second largest Canadian export by value at $51 billion in 2023 of which 93% was exported to the US.

Canada’s aluminum and steel sectors are pillars of the economy, supporting over 130,000 jobs. Ontario leads in steel production, with major hubs in Hamilton and Sault Ste. Marie sending the bulk of these exports to the U.S.

• Canada’s aluminum and steel sectors support over 123,000 direct and indirect jobs across the country.
• Ontario is at the heart of Canada’s primary metal manufacturing, representing over half of the industry’s employment in the country (over 8,200 jobs).
• Ontario is a leading producer of steel in Canada, including major production facilities located in Hamilton.
• The US is the primary export market for Ontario’s steel and aluminum, accounting for a significant portion of Canada’s overall exports.

• In 2023, the agriculture and agri-food sector generated $150 billion, around 7 percent of Canada’s GDP. This sector employed 2.3 million people – 1 in 9 jobs in Canada.
• Ontario’s agri-food exports to the US totaled CAD 21.6 billion in 2023, making the US the largest market for Ontario’s agricultural products.
• Major exports include grain products, meat products, and processed foods.

• Ontario has approximately 130 early exploration projects targeting critical minerals and an additional 16 advanced-stage projects.
• In 2022, Ontario produced $13.5 billion in critical minerals, accounting for 22% of Canada’s total mineral production value.
• In 2022, Ontario was responsible for a third of Canada’s copper production, 45% of its nickel production, and 77% of its Platinum Group Elements (PGE) production, by value.
• Ontario is a net exporter of 9 critical minerals (Cobalt, Indium, Nickel, Niobium, PGE, Selenium,
  Tellurium, Uranium, Zinc).
• The US is dependent on foreign supply chains for many minerals and has a federal strategy
  to ensure secure and reliable supplies.

• In 2023, Ontario directly supplied electricity to 1.5 million U.S. homes and is a major exporter of power in Michigan, Minnesota and New York.
• The United States passed the Inflation Reduction Act (IRA) in August 2022, which included a 30% Investment Tax Credit (ITC) for clean energy projects and provisions for clean hydrogen, electric vehicles (EVs), and domestic manufacturing support. Canada responded by introducing a range of matching investment tax credits including a 30% Clean Technology ITC.
• Previously, Trump pledged to dismantle all unspent funds under the IRA, roll back proposed greenhouse gas emission limits that aim for about 64% of new vehicles to be electric by 2032, and impose a 200% tariff on vehicles imported from Mexico. This would negatively impact US competitiveness and benefit Canadian production.
• After taking office, President Trump signed an executive order to pause funds flowing from the Inflation Reduction Act. It is still unclear which programs or activities would be affected by this action. Instead, the order includes language directing U.S. agencies “to encourage energy exploration, (…) and eliminating electric vehicle mandates”.

• US Energy Information Administration (EIA) forecasts that for the full year of 2024, US crude oil production will average 13.2 million barrels of oil per day, compared to 11.3 million barrels per day (bpd) in 2020 – a 2 million bpd increase. This represents a consistent upward trend that is expected to continue, and may accelerate under a Trump administration, given pledges made to cut energy prices in half.
• Canadian oil production is expected to total between 5.2 – 5.4 million bpd in 2024, primarily due to the completion of the Trans Mountain Pipeline expansion, followed by oil production growth slowing to approximately 2% in 2025, according to TD Economics.
• According to TD, the US is importing record quantities of Canadian oil, with Canada accounting for 60% of US crude imports in 2023.
• Between 2013 and 2023, crude oil imports from Canada to the US have grown an average of 4% per year. In July 2024, imports of crude oil from Canada to the US hit a record 4.3 million bpd.
• The Canadian government unveiled draft regulations that will impose a greenhouse gas cap on the oil and gas sector that limits emissions to 35 per cent below 2019 levels.

• Ontario’s construction sector employs more than 570,000 workers in Ontario, accounting for 6% of employment across the province. In the Greater Toronto Area (GTA), the sector contributed $29.6 billion to regional GDP and supported 235,000 person-years of employment in 2021. Construction materials are a major component of Canada-U.S. trade, making Ontario’s infrastructure sector highly sensitive to tariff impacts.
• Ontario’s population is projected to grow from 16 million in 2024 to 19 million by 2049, increasing demand for housing, transit, and energy infrastructure.
• To support this growth, the province has allocated more than $191 billion towards infrastructure spending over the next decade, with non-residential construction investment expected to peak in 2027 due to major transit, healthcare, manufacturing and other projects.
• Softwood lumber, a key input in housing, commercial, and institutional construction, has been a longstanding issue in U.S.-Canada trade, with existing tariffs ranging from 20% to 30%, raising concerns about cost volatility if new trade restrictions are imposed.
• Ontario has over $60 billion in planned and active P3 projects, a procurement model widely used for large-scale infrastructure. However, P3 contracts typically do not provide direct tariff relief, shifting financial risks to contractors.

• Canadian health innovators export more life-changing medical devices to the U.S. than any other country. In recent years, there has been significant growth in the manufacturing of medical technologies in Canada, with many of these manufacturers being reliant on U.S.-based suppliers for raw materials and intermediary products.
• Canada and the US have built a deeply interconnected life sciences ecosystem, spanning biotech startups to pharmaceutical giants, all working together on clinical trials, drug development, and medical breakthroughs. These collaborations have fueled innovation, advancing treatments for several diseases.
• However, tariffs could make partnerships between both countries too costly, disrupting research and slowing the development of new therapies. When R&D slows down, life-saving treatments take longer to reach those in need. When costs rise, drug prices follow. When cross-border cooperation breaks down, everyone loses—particularly patients counting on the next life-saving therapy.
• Many U.S. pharma companies rely on Canadian suppliers, talent, and clinical research infrastructure. Increased costs could force them to rethink partnerships, move trials elsewhere, or even cut jobs—hurting both countries.
• Tariffs on pharmaceuticals and medical supplies threaten global health security. At a time when stability and access to healthcare are more crucial than ever —especially with bird flu looming — tariffs will only harm public health and limit access to essential treatments, endanger people’s lives and weaken both the US and Canada’s healthcare system resilience.