U.S. Tariffs Put Up to 23,000 Quebec Jobs and $6.6 Billion in Output at Risk, New Barometer Estimates

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Quebec’s exposure to the escalating Canada-U.S. trade conflict is becoming easier to measure—and harder to dismiss. The 2026 Prospera economic barometer estimates that the current tariff environment could reduce output by between $5.3 billion and $6.6 billion in some of Quebec’s most exposed industries. Once the effects on suppliers, workers and other parts of the economy are included, between 17,000 and nearly 23,000 jobs could be at risk.

Released on September 28, the analysis examines ten economic subsectors particularly exposed to U.S. tariffs and Canadian counter-tariffs. The figures represent modeled scenarios rather than a prediction that 23,000 workers will necessarily lose their jobs, but they illustrate how rapidly trade barriers can spread beyond companies that ship goods directly across the border.

The 23,000-Job Figure Is a Risk Estimate, Not a Layoff Forecast

The upper-end estimate is one of the most striking numbers in the new Prospera Barometer, but its meaning matters. Researchers estimate that between 17,000 and nearly 23,000 jobs could be at risk after accounting for direct, indirect and induced economic effects. The associated reduction in output is estimated at between $5.3 billion and $6.6 billion. Those are scenario results based on the tariff measures examined, not a declaration that those losses have already happened or that every potentially affected position will disappear.

The analysis also uses two successive pictures of Quebec’s exposure. One considers duties that can be linked relatively directly to products. Another incorporates tariffs on steel, aluminum and certain derivative goods, where exposure can depend on factors such as the amount of targeted metal contained in a product. Prospera explicitly notes that this second calculation requires more assumptions and is therefore less precise. That distinction is important when interpreting the headline numbers: the barometer is measuring economic vulnerability under specified trade conditions rather than reporting confirmed losses.

Quebec’s Dependence on the U.S. Market Magnifies the Stakes

The ten subsectors examined by Prospera generated approximately $120.6 billion in worldwide exports during the 12 months from August 2025 through July 2026. About $55.3 billion went to the United States. Collectively, those industries represented 68% of all Quebec exports to the American market, demonstrating how concentrated the province’s tariff exposure can become even when the overall Quebec economy remains much broader.

Official trade figures show a similar dependence. Institut de la statistique du Québec reported that 68.2% of Quebec’s merchandise exports went to the United States during the first half of 2026, representing roughly $40.5 billion. Those U.S.-bound exports were 7.2% lower than during the same period in 2025. The pattern began shifting later in the year: through the first seven months of 2026, exports to the United States remained down 6.3%, while exports to destinations outside the United States were up 15.0%. Diversification is therefore occurring, but replacing a market responsible for roughly two-thirds of exports is a much larger task than simply finding a few new customers.

Metals, Electrical Equipment and Paper Stand Out

Not every Quebec industry faces the same tariff exposure. In Prospera’s first scenario, which focuses on duties affecting a broad range of products, electrical equipment and paper emerge prominently. Once steel, aluminum and related products are incorporated, the balance shifts more heavily toward metal industries. Fabricated metal product manufacturing shows the strongest combined exposure, while primary metal manufacturing joins electrical equipment among the sectors identified as particularly vulnerable.

The underlying trade flows help explain that result. During the first half of 2026, Quebec exported roughly $4.02 billion worth of unwrought aluminum and aluminum alloys to the United States, making that category alone about 9.9% of the province’s U.S.-bound merchandise exports. Quebec also shipped approximately $1.56 billion in unwrought copper and copper alloys and more than $1.1 billion in paper, excluding newsprint, to American customers. Behind those numbers are smelters, processors, equipment makers, transport companies and smaller suppliers. A tariff shock affecting a major exporter can therefore move through an industrial ecosystem rather than remaining confined to one factory.

The Tariff System Now Hits Both Sales and Supply Chains

The current trade environment is more complicated than a single tariff applied at the border. Quebec’s government, in its September 23 summary of measures in force, lists U.S. Section 338 tariffs of 50% on various products including certain electrical goods, construction products, plastics, paper and cardboard. U.S. tariffs on steel and aluminum are also listed at 50%, with different rates applying to various derivative products. A separate 10% U.S. tariff applies broadly to certain goods under Section 301, although CUSMA-compliant products and several other categories are exempt.

Canada has responded with its own measures. Beginning September 8, Ottawa imposed tariffs of 15%, 25% or 50% on $27.6 billion worth of targeted U.S. imports, including products in steel, aluminum, agricultural equipment, pulp and paper and electronics-related categories. This creates the “dual exposure” emphasized by Prospera: exporters may face higher costs or weaker demand in the United States, while Quebec companies using American inputs can encounter additional costs at home. Remission provisions can reduce the burden in certain circumstances, but eligibility depends on the product and its use.

Economic Damage Can Travel Well Beyond the Exporter

The difference between direct, indirect and induced effects helps explain how a trade restriction affecting a relatively small group of exporters can ultimately place many more jobs at risk. A direct effect occurs inside the company or industry first hit by weaker demand. Indirect effects appear among suppliers that sell machinery, components, transportation or professional services to that business. Induced effects arise when affected employment and income alter household spending elsewhere in the economy.

Statistics Canada uses input-output multipliers for precisely this kind of economic analysis, allowing researchers to distinguish effects on gross output, GDP, employment and imports. That distinction also matters for the $6.6-billion headline figure. Prospera describes it as a potential net reduction in output in the sectors examined. It should not automatically be interpreted as an identical $6.6-billion reduction in Quebec GDP, since output and value-added GDP are different measures. The employment estimate similarly represents the broader economic footprint that could be exposed under the modeled scenarios, rather than a count of announced job cuts.

Quebec Enters the Shock With a Mixed Economic Picture

The tariff risk is arriving at a time when Quebec’s economy is neither collapsing nor immune to weakness. Institut de la statistique du Québec reported approximately 4.59 million people employed in the province in August 2026. Employment declined by 18,500 from the previous month, while the unemployment rate stood at 5.6%. Quebec’s real GDP by industry had also edged down 0.1% in May, and international merchandise exports fell 3.5% in June before rebounding 7.2% in July.

Those numbers require careful interpretation. Monthly employment, GDP and export figures move for many reasons, and they cannot be treated as proof that tariffs alone caused recent weakness. There are also signs of adjustment. Quebec’s exports outside the United States have been growing, while national business surveys have found some companies changing suppliers, production methods and shipping arrangements. The concern raised by Prospera is therefore less about one bad economic month and more about what persistent trade restrictions could do to investment, production and employment if firms cannot replace lost business quickly enough.

Governments Are Trying to Cushion the Adjustment

Quebec has introduced several measures intended to keep more spending inside the province and help affected businesses adapt. In September, the provincial government announced procurement changes allowing certain contracts to favour Quebec or Canadian companies. For some construction contracts valued below $9.2 million, designated public bodies are required to ensure that at least 15% of the value of materials and equipment is Quebec or Canadian sourced. Quebec has also expanded flexibility under its FORCE financing program and created assistance aimed at helping businesses find buyers in other Canadian provinces.

Federal measures operate alongside those programs. Canada Economic Development for Quebec Regions administers the Regional Tariff Response Initiative in the province, offering support for liquidity, productivity improvements, technology adoption, supply-chain resilience and market diversification. Federal funding has already been directed toward Quebec manufacturers affected by aluminum tariffs, including companies seeking new equipment or customers. Such programs can preserve capacity while companies adjust, but they do not make the commercial problem disappear: exporters ultimately need competitive customers, workable supply chains and enough certainty to continue investing and hiring.

Diversification May Be the Biggest Long-Term Test

One encouraging sign is that Quebec companies are already selling more into markets outside the United States. Exports to non-U.S. destinations were up 15.0% over the first seven months of 2026 compared with a year earlier. The Bank of Canada has also observed that Canadian businesses are changing suppliers, adopting technology and pursuing customers in new markets as they adjust to higher trade barriers. Those changes can reduce dependence on any single destination over time.

The difficult part is speed. The Bank has cautioned that building new international commercial relationships takes time, particularly for manufacturers facing strong global competition. It has also warned that renewed trade uncertainty can cause companies to postpone investment and hiring even when the direct tariff exposure is concentrated in specific sectors. Prospera reaches a similar longer-term conclusion: Quebec’s ability to weather the current disruption will depend not only on finding alternative buyers, but on preserving investment, innovation and productivity while diversification occurs. The estimate of nearly 23,000 jobs at risk is therefore best read as a measure of what is exposed—not a predetermined economic outcome.

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