Ontario’s economy is beginning to feel the weight of newly imposed U.S. tariffs, with the province losing 38,000 jobs in the second quarter of 2025, according to a report released Thursday by Ontario’s Financial Accountability Office.
Financial accountability officer Jeffrey Novak said the job losses reflect both the early effects of the tariffs and broader economic challenges.
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“Key economic indicators for Q2 2025 point to mostly negative outcomes, including declines in employment, manufacturing sales, wholesale and retail trade, and international exports,” Novak wrote.
The manufacturing sector took the brunt of the damage, shedding 29,400 jobs—a 3.5% drop, marking the steepest quarterly loss in the industry since 2009, outside of the COVID-19 period. This downturn follows a strong 3.1% employment gain in Q1 2025. Novak noted that the tariffs on Ontario’s exports are beginning to significantly affect the sector.
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While the province lost 56,600 full-time jobs overall, this was partially offset by a gain of 18,700 part-time positions. Still, Ontario’s unemployment rate rose for the ninth consecutive quarter, reaching 7.8%—the highest level since late 2012, excluding the pandemic period.
The city of Windsor has been hit especially hard due to its manufacturing-heavy economy. Its unemployment rate jumped 1.9 percentage points in Q2, reaching 11.2%—the highest in the province.
Liberal finance critic Stephanie Bowman criticized the government’s handling of the crisis, saying the report shows that the province is moving in the wrong direction.
“Never has a government spent so much to deliver so little,” Bowman stated. “Working families are struggling, housing construction is at a decade-long low, and many tariff-impacted businesses don’t qualify for provincial support.”
Earlier this month, the Ontario government launched a $1-billion loan program as part of a $5-billion tariff-relief package introduced in the spring budget. The Protect Ontario Financing Program aims to help businesses affected by tariffs on steel, aluminum, and autos cover essential costs such as payroll, rent, and utilities—helping to stave off closures and layoffs.
To qualify, businesses must be directly affected by specific tariffs, have at least 10 employees, generate at least $2 million in annual revenue, and have already used up available federal support.
However, NDP economic development critic Catherine Fife argued the government is falling short in protecting workers and stabilizing key industries.
“We’re watching core sectors like trade and manufacturing crumble, while workers are left with no job security,” she said. “This government still hasn’t put forward a credible plan to safeguard jobs or offer families the stability they need.”
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