Ontario sheds manufacturing jobs as tariff impacts felt, report says

TORONTO — Ontario’s economy has recently started to feel the impact of American tariffs, shedding 38,000 jobs in the second quarter of 2025, the province’s financial watchdog said Thursday in a report.

Financial accountability officer Jeffrey Novak said hits to employment in that timeframe include the early impacts of the tariffs, as well as broad economic factors.

“The latest economic indicators suggest mostly negative results for Ontario’s economy in 2025 Q2, with losses in employment, manufacturing sales, wholesale and retail trade, and international exports,” Novak wrote.

Most of the losses were felt in the manufacturing sector, which was down 29,400 jobs. That drop of 3.5 per cent was the sharpest quarterly job loss in the sector since 2009, except for the COVID-19 pandemic.

“After a strong 3.1 per cent gain in 2025 Q1, manufacturing employment fell by -3.5 per cent in 2025 Q2 as newly imposed U.S. tariffs on exports began to weigh on the sector,” Novak wrote.

The loss of 56,600 full-time jobs was partly offset by 18,700 added part-time jobs.

The unemployment rate rose for a ninth consecutive quarter, up to 7.8 per cent – the highest rate since late 2012, excluding the pandemic.

Novak said the effects of tariffs are being particularly felt in Windsor, which has a large manufacturing base, and its unemployment rate rose 1.9 percentage points in the second quarter to 11.2 per cent, the highest in the province.

Liberal finance critic Stephanie Bowman said in a statement that the FAO report shows the government is steering the province in the wrong direction.

“Never has a government spent so much to deliver so little,” she wrote. “Working families are struggling, we are building housing at the slowest rate in a decade, and many of the businesses impacted by tariffs are not eligible for help from the province.”

Earlier this month, the government opened up a $1-billion fund aimed at giving relief to businesses affected by steel, aluminum and auto tariffs.

The Protect Ontario Financing Program is part of a $5-billion tariff-related support package the provincial government announced in its spring budget. The loan program is designed to help businesses make payroll, lease and utility payments and avoid closures and layoffs.

For businesses to qualify they have to be affected by certain tariffs, have a minimum of 10 employees and a minimum of $2 million in annual revenue, and have already exhausted federal tariff support programs.

The NDP says the provincial government isn’t doing enough to protect jobs.

“We’re watching key sectors like trade and manufacturing deteriorate, while workers are left without security,” Catherine Fife, the NDP’s critic for economic development, jobs and trade, wrote in a statement.

“This government has yet to put forward a credible plan to protect jobs or provide families with the stability they need.”

This report by The Canadian Press was first published Aug. 21, 2025.

Allison Jones, The Canadian Press