With a first salvo of U.S. tariffs place on Canadian goods, then delayed just days later, many are wondering how the policy will affect the cost of living and goods in the Great White North.
Camosun College economics instructor Keith Yacucha says that while Vancouver Island is in a relatively good position to weather the economic churn, “uncertainty” remains around its overall effects.
“The province released in its budget the negative impacts on the province as a whole, but we’re going to see that in pockets,” he said during a live interview with CHEK News on Wednesday.
The economics instructor says many of the Island’s largest industries are distanced from the tariffs.
“Here on the Island, especially the South Island – a lot of government, a lot of education, a lot of healthcare – fairly stable employment,” he said.
“Outside of that, one of our big industries is tourism. The dollar’s coming down, with the dollar coming down that’s a boom for tourism. We could actually see a huge increase,” he said. “Of course, a lot of that’s going to depend on, are we still welcoming to our American tourists and friends as they come across?”
RELATED: ‘You will not get away with this’: Victorians react strongly to tariffs
Effects on your wallet
While uncertainty still swirls about the effects of the tariffs, Yacucha says there’s a possibility that prices could come down for some products, though costs may go up as well, particularly depending on Canada’s retaliatory tariffs.
“One of the big imports here in B.C. is cars. So if we are responding, and that responding goes on vehicles, that could get hit,” he said.
“We could see an increase in (car prices), believe it or not phones, that’s a massive import of ours, so a lot of aspects like that. Like I said, it’s pocketed, it’s split around.”
At the same time, however, Yacucha says some Canadian banks were also forecasting that interest rates could come down as a result of the tariffs.
Since the U.S. is such a large purchaser of Canadian goods, if the U.S. reduces its spending, the demand for Canadian goods may also decrease, meaning prices could come down.
“RBC, BMO, are actually forecasting that interest rates might come down out of fear of prices coming down,” said Yacucha.
RELATED: History of U.S. tariffs on Canadian goods over the decades
Meanwhile, Canadian tariffs on U.S. products could increase prices for Canadian made goods as they enter our supply chain.
“Imported gasoline, imported copper, aluminum – not quite raw, but intermediately finished resources, as they come in – those are then used in that intermediate production process here, and that ripples up all the way up the supply chain,” he said.
Ultimately, Yacucha stresses that there’s no crystal ball for how the trade war will affect our lives day to day.
“These are really untested times,” he said. “We have a lot of ideas, a lot of models, a lot of theories as to what could happen, but uncertainty.”
He says some of the best ways to help the economy in the meantime are to support local so that dollars spent remain in the community, not only on Vancouver Island but within Canada as a whole.
