How are U.S. tariffs impacting your finances?

How does this impact your daily life?

Tariffs drive up the prices of imported goods. However, prices will not increase at the same time or at the same pace. Below are the sectors where you could feel the effects on the cost of living.

• Groceries and imported products

  Supermarket prices have already risen and the increases are not only affecting products from the United States. The drop in value of the Canadian dollar and supply chain disruptions have driven up the prices of many imported and Canadian products. Verifying the origin of products and comparing before buying is more important than ever.

• Vehicles and auto parts

  The automotive industry has been especially hard hit by tariffs. The price of both new cars and replacement parts could rise. If you’re planning a significant purchase or repair, you should reflect these potential increases in your budget.

• Construction materials and renovations

  Wood, steel and other materials are subject to tariffs. Renovation and construction projects could end up costing more. If you’re planning construction work or renovations, don’t delay asking for quotations and anticipate potential price increases.

• Electronics and appliances

  Their market value could increase in the coming months, which will further reduce household purchasing power.

It bears repeating: not everything will go up overnight. But staying alert to prices and avoiding rushed purchases is a good habit to adopt now.

How can you protect your budget from rising costs?

1. Review your expenses

   Certain expenses can be reduced or postponed without affecting your quality of life. This could include subscriptions to movie streaming platforms, going out to restaurants and buying gadgets or clothes from time to time. Don’t forget that small purchases can quickly add up.

2. Compare prices before buying

   Check flyers and special offers. However, beware of offers that create a false sense of urgency. And, most importantly, take time to compare prices for major purchases.

3. Avoid paying everyday expenses with credit

   If you start using your credit card to pay for groceries and gas or cover monthly bills and fail to pay the balance in full every month, this is a serious warning sign. Interest can build up quickly and debt can snowball without you even noticing.

4. Create a financial safety net

   Whenever you can, transfer $20 or $50 into a separate account every month. During uncertain times, even a small financial cushion can help you avoid using credit to cover an unexpected expense.

Buy Canadian as often as possible

When you choose local products and businesses, you support the Canadian economy and Canadian jobs.

• When choosing products, be on the lookout for labels that read “Made in Canada” or “Product of Canada.”
• Compare prices. Canadian products are often high quality and not necessarily the most expensive.
• Consider purchasing either used or refurbished items (electronic devices and household appliances, in particular).

Naturally, buying Canadian products is a good idea, but not when it puts a strain on your budget. If a local product costs much more and your finances are stretched thin, it’s best to choose the most affordable option.

What can you do if your job stability is eroded?

The automotive, steel, aluminum and forestry sectors are particularly vulnerable. Here’s how you can prepare if you work in one of these sectors.

• Review your budget immediately

  List your essential expenses such as housing, groceries, transportation and insurance. If your income were to drop, which expenses could you reduce or eliminate?

• Avoid making new significant financial commitments

  This is not the best time to take out a new loan, finance a car purchase or increase your credit limit. Make space in your budget for unexpected expenses.

• Build your emergency fund

  If you have the room to save a little more now, go ahead. During difficult times, this buffer can make all the difference.

Employment insurance and support for affected workers

The federal government has announced a series of measures to support workers impacted by tariffs. You may be entitled to the measures below.

1. Employment Insurance

   If you lose your job, submit an application for Employment Insurance benefits as soon as possible. Temporary measures have been introduced.

   • The one-week waiting period has been waived.
   • Certain severance payments are treated differently in order to avoid delaying benefits payments.
   • Additional weeks of benefits are offered to certain long-tenured workers in affected sectors.

2. Work-Sharing Program

   If your employer reduces your working hours to avoid layoffs, check whether they have registered for the Work-Sharing Program. This program allows workers to receive Employment Insurance benefits to offset the reduction in hours and allows the employer to retain their team.

   Click here for more information regarding the various support measures offered by the government.

Debts and financial difficulties: when to ask for help?

Certain signs indicate that the situation is no longer sustainable. It’s best to raise a red flag early on.

• You’re using your credit card to pay for groceries or cover your bills.
• You’re only making minimum debt payments.
• Late payments are piling up.
• You’re unsure which debts you should prioritize.

If any of these situations apply to you, it’s time to take action. The sooner you reach out to a professional, the more options you will have.

Our Insolvency Counsellors can help you to take stock of your situation and come up with a solution that’s tailored to your reality. The first consultation is free, confidential and judgment-free.