Bank of Canada Report Shows Counter-Tariffs Raised Prices 6%

Bank of Canada researchers released a report finding that goods affected by Ottawa's counter-tariffs against the United States were roughly 6 percent more expensive on average than non-tariffed goods last year. In March 2025, the Canadian federal government imposed 25 percent tariffs on U.S. grocery items, clothing, and household staples for approximately six months, retaliating against President Donald Trump's initial tariff campaign.

The analysis compared over 100,000 tariffed goods across seven retailers to a control group. Researchers found that nearly a quarter of counter-tariff costs were passed on to consumers by mid-June 2025, adding about 0.3 percentage points to headline inflation. The pass-through rate roughly matched what was observed in the United States from Trump's global tariffs. Prices on tariffed goods fell back in line with the control group approximately three months after Canada removed most counter-tariffs in September 2025.

The report highlighted two factors that amplified price increases. Retailers who expected the trade dispute to persist longer passed more costs to consumers. Additionally, products flagged with tariff labels, including shelf symbols and QR codes linking to government websites, saw higher price increases because the labels shifted blame away from retailers and reduced the risk of customer backlash.