Ontario Premier Doug Ford is warning that the province’s automotive industry must prepare for a future in which American tariffs remain in place long after President Donald Trump leaves office. Speaking at the Empire Club of Canada in Toronto on October 14, 2026, Ford said the country’s economic relationship with the United States has changed fundamentally and businesses can no longer assume that traditional trading arrangements will eventually return. His warning comes amid escalating U.S. trade restrictions, mounting pressure on Ontario’s automotive manufacturing sector, and growing concerns about investment and employment. For communities built around vehicle assembly plants and parts suppliers, the implications extend beyond political disagreements in Washington. Ford’s message signals a shift toward long-term economic planning, with Ontario preparing for the possibility that protectionism becomes a lasting feature of North American trade.
Ford Says Ontario Must Stop Assuming U.S. Tariffs Are Temporary
Ford’s October 14 address marked a significant shift in how Ontario is approaching its relationship with its largest trading partner. Rather than building economic plans around the expectation that American tariffs will disappear after the next presidential election, the premier argued that businesses and governments must prepare for prolonged trade restrictions. His central warning was straightforward: “We need to plan as if tariffs are here for good.” The comments applied to several important Ontario industries, including automotive manufacturing, steel, aluminum, and lumber, all of which depend heavily on access to American customers.
Ford’s concerns are not limited to Trump’s immediate policies. Federal Industry Minister Mélanie Joly has also warned that trade protectionism enjoys support across parts of the American political spectrum. Some Democratic politicians have criticized Trump’s approach without committing to eliminate every tariff introduced during his presidency. That uncertainty makes long-term industrial planning more difficult. Automakers frequently make investment decisions years before vehicles enter production, and factories can remain operational for decades. Ford’s warning does not establish that current U.S. tariffs will legally remain permanent. Instead, it reflects the growing possibility that Canada’s traditional expectations about free trade may no longer provide a dependable basis for major manufacturing decisions.
Trump’s Auto Tariffs Could Become Even More Expensive in 2027
Canadian-built vehicles have faced a 25% U.S. tariff on their non-American content since April 2025. Under existing arrangements, vehicles that satisfy Canada-United States-Mexico Agreement requirements can receive special treatment allowing the value of their American-made components to be excluded from the tariff calculation. This distinction means a qualifying Canadian vehicle containing substantial U.S. content does not necessarily face a 25% duty on its entire value. However, manufacturers must account for detailed sourcing requirements and customs documentation, making cross-border production more complicated than it was before the trade dispute.
The threat intensified on August 24, 2026, when Trump announced plans to increase tariffs on Canadian cars, trucks, and automotive parts to 50% beginning January 1, 2027. That proposed increase must be distinguished from existing duties and separate 50% tariffs already imposed on certain other Canadian products. The White House has also introduced additional restrictions involving steel, aluminum, and other goods through different legal authorities. For Ontario manufacturers, the uncertainty surrounding future tariff rates can be almost as disruptive as the existing costs. A company considering a multibillion-dollar production program must evaluate whether its vehicles will remain competitively priced in the United States. Even if a threatened increase is postponed or modified, repeated changes to trade policy can discourage investment and complicate decisions about future production locations.
The CUSMA Trade Agreement Remains in Force, but Its Future Is Unsettled
Ontario’s automotive industry was built around the idea that vehicles and components could move relatively freely across North American borders. That arrangement became more uncertain on July 1, 2026, when the United States declined to extend the Canada-United States-Mexico Agreement during its scheduled six-year review. U.S. Trade Representative Jamieson Greer confirmed that Washington wanted substantial changes before agreeing to renew the agreement. However, the refusal did not automatically terminate CUSMA. Under its existing provisions, the agreement remains in force until 2036 unless the countries reach another arrangement or a government separately exercises its right to withdraw.
The uncertainty deepened on August 21 when Prime Minister Mark Carney suspended trade negotiations with Washington. Carney said the latest American demands were economically unacceptable and threatened Canadian sovereignty and industrial competitiveness. His government had been seeking lower tariffs on strategically important sectors, including automotive manufacturing and metals. Without an agreement, companies face the possibility of continued annual trade reviews, renewed negotiations, and further changes to import requirements. The practical concern is not simply whether CUSMA survives. Manufacturers also need to know whether the agreement will deliver predictable, affordable market access. For a parts supplier signing a multiyear production contract, legal uncertainty can influence hiring, equipment purchases, financing, and decisions about where future factories should operate.
Ontario’s Automotive Economy Depends Heavily on American Customers
Ontario has more at stake in the trade dispute than most Canadian provinces because of its concentration of automotive manufacturing. According to Invest Ontario, the province directly employs approximately 92,000 workers in its automotive sector and hosts major manufacturing operations belonging to Ford, General Motors, Honda, Stellantis, and Toyota. Federal economic development figures show that Ontario exported approximately $60 billion in vehicles and automotive parts to the United States in 2025, representing about 96% of the province’s automotive exports. Those figures demonstrate why replacing American customers with buyers in other countries would be exceptionally difficult.
The dependence extends beyond factories that assemble complete vehicles. Southern Ontario contains an extensive network of component suppliers, engineering businesses, transportation companies, and specialized manufacturers. Statistics Canada estimated that American demand accounted for approximately 76.4% of employment in Canada’s automobile and light-duty motor vehicle manufacturing industry in 2024. Meanwhile, federal officials report that more than 90% of Canadian-made vehicles are exported to the United States. The consequences of reduced American orders can therefore extend through entire communities. When an assembly plant cuts production, nearby suppliers may receive fewer orders, transportation companies may handle fewer shipments, and businesses serving factory employees can experience slower sales. Ford’s long-term warning is especially significant because the industry’s economic foundations depend on a trading relationship that has become increasingly unpredictable.
Oshawa and Brampton Show How Manufacturing Jobs Are Already at Risk
The consequences of automotive uncertainty are visible in several Ontario communities. On February 2, 2026, General Motors reduced operations at its Oshawa Assembly Plant from three shifts to two, placing approximately 500 employees on layoff. GM said the adjustment reflected production requirements and emphasized that it was investing $280 million in preparations for future full-size pickup manufacturing. Unifor, the union representing Canadian autoworkers, has expressed concern that American trade policies are encouraging manufacturers to move production south of the border. GM has disputed suggestions that tariffs alone explain the Oshawa decision, illustrating the difficulty of separating trade pressures from changing vehicle demand and corporate production strategies.
Brampton faces a different challenge. Stellantis’ assembly plant has remained idle, leaving approximately 2,200 union members on indefinite layoff. In September, Unifor reported that Stellantis was considering closing and selling the facility to defence manufacturer Roshel, following the company’s earlier decision to move planned Jeep production to the United States. The proposed sale has not been presented as a completed transaction, and the union strongly opposes abandoning automotive assembly at the site. Contract negotiations remained stalled into October, with Unifor proceeding toward strike-authorization votes. For workers in both communities, discussions about international tariffs are closely connected to household income, pension security, and the possibility of finding another manufacturing job nearby.
Ontario’s Multibillion-Dollar EV Investments Face an Uncertain Future
Ontario has spent years positioning itself as a major centre for North American electric vehicle and battery manufacturing. Provincial figures show that more than $46 billion in automotive and battery supply-chain investments have been announced over the past five years. Among the largest projects are Volkswagen subsidiary PowerCo’s approximately $7-billion battery factory in St. Thomas and the $5-billion NextStar Energy facility in Windsor. NextStar celebrated its official opening in March 2026, after producing more than one million battery cells and hiring over 1,300 workers. Its ownership structure has also changed, with LG Energy Solution moving to acquire Stellantis’ 49% stake.
These investments demonstrate that Ontario retains considerable manufacturing strengths, but they do not guarantee that every announced project will proceed as originally planned. Honda provided a particularly significant example in May 2026 when it indefinitely suspended its previously announced Canadian EV manufacturing expansion. The broader investment plan had been valued at approximately $15 billion and included new vehicle and battery production facilities in Alliston. Honda attributed the decision to changing market conditions, customer demand, and its revised strategy, rather than identifying tariffs as the sole cause. The company emphasized that existing Civic and CR-V production would continue without changes to current employment. Nevertheless, the suspension illustrates how quickly major investment plans can change. For Ontario, retaining existing manufacturers while attracting new projects will require competitive operating costs, predictable regulations, and confidence that future vehicles can reach profitable markets.
Auto Parts Suppliers and Steel Producers Are Facing a Double Squeeze
Ontario’s trade exposure is not limited to completed vehicles. Automotive components frequently cross the Canada-U.S. border several times during production, making the industry particularly sensitive to customs delays and changing import requirements. Many smaller suppliers operate with limited financial flexibility and depend on stable contracts with larger manufacturers. Federal economic development figures show that more than 95% of southern Ontario’s automotive suppliers employ fewer than 500 workers, yet these businesses account for approximately 61% of the region’s automotive workforce. A sustained decline in assembly orders could therefore create widespread difficulties among companies that rarely attract national attention.
Steel producers face additional challenges because the United States has imposed tariffs of 50% on Canadian steel and aluminum imports. Ontario exported approximately $6.5 billion in steel and aluminum to the American market in 2025, accounting for 94% of the province’s exports in those categories. The pressure is already evident at Stelco, whose American parent company, Cleveland-Cliffs, has begun laying off workers in Hamilton and surrounding operations. Up to 500 positions are affected by the announced reductions. On October 14, federal Industry Minister Mélanie Joly warned that the company could face legal consequences if it violated employment commitments made during its 2024 acquisition of Stelco. The dispute demonstrates how the trade war is affecting interconnected manufacturing industries, making automotive competitiveness dependent on the health of steelmakers and component suppliers alike.
Ontario Has Announced $30 Billion in Support, but Questions Remain About Delivery
Ford’s government has introduced a wide range of measures intended to protect businesses from U.S. tariffs. Ontario’s broader package includes nearly $30 billion in announced relief, financing capacity, tax measures, and longer-term economic initiatives. Among the programs are the $1-billion Protect Ontario Financing Program, which provides loans to eligible businesses facing financial pressures, and the $150-million Ontario Together Trade Fund, which helps smaller companies diversify markets and strengthen domestic supply chains. The province has also established a $40-million Trade-Impacted Communities Program to support regions experiencing serious economic disruption. Eligibility for several programs was expanded during September 2026 as American trade restrictions intensified.
However, the pace at which support reaches businesses has become politically contentious. On September 30, Global News reported that approximately $140 million had been committed or provided through the government’s signature Protect Ontario account, including $100 million associated with support for Algoma Steel. Provincial officials told a legislative committee that 36 applications had been received through the financing program, with 18 approved for approximately $40 million. Opposition politicians argued that the figures demonstrated insufficient assistance for struggling businesses. Finance Minister Peter Bethlenfalvy defended the government’s broader approach and pointed to other programs with stronger participation. The province has also considered redirecting billions toward a longer-term investment fund, although those plans were not being actively advanced at the time. For workers facing layoffs, the distinction between money announced, financing approved, and support actually delivered remains critically important.
Ottawa’s New Automotive Strategy Is Designed to Keep Production in Canada
The federal government has developed its own response to the automotive industry’s challenges. In February 2026, Prime Minister Mark Carney announced an automotive strategy intended to strengthen domestic production, protect employment, and reduce dependence on the United States. The plan includes allocating up to $3 billion from the Strategic Response Fund and up to $100 million through the Regional Tariff Response Initiative to support automotive investments and diversification. Ottawa also proposed changes to its automotive tariff-remission system to reward manufacturers that continue investing in Canadian production. These measures are intended to make Canada a more attractive location for future vehicle assembly and component manufacturing.
Ontario is also using government purchasing to support domestic manufacturers. Under its Buy Ontario procurement rules, covered public-sector organizations must prioritize vehicles manufactured in Ontario when purchasing or leasing eligible light-duty fleet vehicles. Where a qualifying Ontario-made vehicle is unavailable or unsuitable, the rules provide alternatives involving manufacturers with Ontario operations. The strategy is intended to create more dependable domestic demand, although public-sector purchases cannot replace the much larger American consumer market. Federal and provincial governments also face difficult decisions concerning electric vehicle manufacturing, changing emissions regulations, and worker training. Their shared challenge is ensuring that public investment produces lasting Canadian manufacturing activity rather than merely providing temporary financial assistance while production moves elsewhere.
Ford’s Long-Term Strategy Depends on Finding Markets Beyond the United States
Ford’s warning reflects a broader effort to make Ontario less vulnerable to decisions made in Washington. The province has been working to reduce interprovincial trade barriers, expand opportunities for Canadian businesses, and encourage investment in infrastructure and industrial development. Ontario’s 2026 budget highlights efforts to eliminate provincial exceptions under the Canadian Free Trade Agreement and improve labour mobility between provinces. Ford has also emphasized electricity infrastructure, nuclear energy development, critical minerals, and a proposed energy corridor connecting Alberta and Ontario. These initiatives are intended to strengthen the province’s competitiveness and reduce dependence on external suppliers.
International diversification is also becoming a priority for Ottawa. On October 14, Foreign Minister Anita Anand told Reuters that Canada was seeking to complete a trade agreement with India before the end of 2026 while strengthening economic relations with Europe and Asian partners. The federal government wants to double non-U.S. trade over the next decade. Yet automotive exports present a particularly difficult challenge because Canadian assembly plants are closely integrated with American vehicle requirements, suppliers, and distribution networks. Developing major new overseas markets would require additional investment and time. For Ontario’s automotive industry, the immediate priorities remain retaining production, protecting skilled workers, and securing predictable access to customers. Ford’s central message is that hoping for the return of yesterday’s trade relationship is no longer a sufficient industrial strategy. Whether American tariffs ultimately remain, change, or disappear, Ontario must prepare its automotive economy to compete under conditions that could remain uncertain for years.
