New data suggests that employment in Canada’s automotive sector had finally reached pre-pandemic levels in December 2024, just as tariff threats from the United States came in to damage it.
In the last month of 2024, employment in the automotive sector reached 603,500, just 0.9 per cent behind the employment level reported in December 2019, according to data released by DesRosiers Automotive Consultants. However, although the raw numbers were similar, some details were different.
Reflecting wider changes in consumer behaviour, automotive repair and maintenance were 7.4 per cent higher in 2024 than they were five years earlier. Similarly, employment in automotive parts and accessories stores was up 4.2 per cent. Conversely, employment in vehicle parts and accessories manufacturing was down.
The recent tariff war launched by President Donald Trump threatens to stop growth in the manufacturing sector and to significantly impede growth in the aftermarket.
Unifor, the union that represents many workers in Canada’s automotive sector, has a dire warning about what the impact of this trade war will be. The group said Wednesday that aluminum and steel tariffs will damage North American manufacturing, injuring workers, eliminating jobs, and hurting consumers.
The wider tariffs on the auto sector that President Trump has threatened to introduce on April 2 will “essentially, permanently shut down the automotive manufacturing business in Canada.”
This, despite Canada living up to its commitments as established in the Canada U.S. Mexico trade agreement that was signed in 2019, during the first Trump administration. That is leading to speculation that America’s tariff threats are about more than just metal.
“Tariffs on Canadian steel and aluminum have nothing to do with trade in those sectors but are instead an assault designed to weaken Canada’s economy and steal our jobs,” said Daniel Cloutier, Unifor Quebec Director.
Unfortunately, even as the trade levies are renegotiated and change (Trump has twice delayed the tariffs), the impact of the uncertainty the United States has wrought is still negative.
“While the pause in some auto tariffs may be a welcome reprieve, the broader pressure on this critical part of Canada’s economy remains” said Andrew King, Managing Partner at DesRosiers. “Jobs on both sides of the border are at risk as long as this needless chaos continues.”
