Ottawa consumers and small business owners had it harder last year than many realized — and now there's a number to put to it.
A new report from the Bank of Canada estimates that Canada's counter-tariffs on American goods pushed domestic prices up by approximately six per cent over the course of 2025, rippling through household budgets and supply chains from coast to coast, including right here in the capital.
What the BoC Found
The Bank of Canada's analysis looked at the downstream effect of retaliatory tariffs Canada imposed on U.S. imports in response to American trade measures. The counter-tariffs — which targeted a wide range of American goods including steel, aluminum, consumer products, and agricultural goods — were designed as a pressure tactic, but they also raised costs for Canadian importers who rely on U.S. supply chains.
The roughly six per cent price bump represents one of the more significant inflation drivers outside of the post-pandemic supply shock era, and economists say it disproportionately hit sectors where Canada lacks domestic substitutes for American products.
The Ottawa Impact
For Ottawa, the effects were felt unevenly. The city's large public sector workforce and relatively stable employment base provided some insulation — but that didn't mean local grocery bills, hardware runs, or restaurant menus were immune.
Ottawa restaurateurs who source American produce, meat, or specialty imports saw input costs climb. Contractors working on the city's ongoing construction and infrastructure projects — from LRT Phase 2 wrap-up work to new housing developments — faced higher prices on steel and aluminum. And everyday Ottawans stretching their grocery budgets felt the squeeze at the checkout.
Local retailers in the Glebe, Westboro, and ByWard Market areas reported last year that price increases from suppliers were making it harder to stay competitive, particularly against large chains with more bargaining power.
What It Means Going Forward
The BoC report underscores the broader challenge Canada faces in a prolonged tariff standoff with the United States. While retaliatory tariffs are a legitimate trade policy tool, the domestic cost is real — and Ottawa households are paying it.
With the federal government continuing to navigate trade negotiations and the Canadian dollar remaining under pressure, economists caution that price relief may be slow to arrive. The Bank of Canada has been carefully balancing its rate policy with these inflationary pressures in mind, making any near-term cuts a delicate call.
For Ottawa families already navigating one of the country's priciest housing markets, an additional six per cent price drag on goods is no small thing. Consumer advocacy groups have called for clearer government communication on how long these elevated costs are expected to persist.
The Bigger Picture
Canada-U.S. trade tensions have been a defining economic story for the past two years, and the BoC's findings give Canadians a clearer picture of the real toll. The hope is that quantifying the damage will sharpen the political conversation — and push both sides toward a resolution that stops ordinary people from paying the bill.
For now, Ottawa shoppers, restaurateurs, and contractors are left managing the math as best they can.
Source: Bank of Canada report via Toronto Star / Google News Ottawa RSS feed.
