A new report cautions that the collapse of the United States-Mexico-Canada Agreement (USMCA) trade framework could lead to the loss of 102,000 jobs in Canada. The study, conducted by Oxford Economics for the Canadian American Business Council, examines the potential economic fallout under various scenarios for the USMCA, including its complete termination.

The report states that if the USMCA becomes void, the United States would see a reduction of 214,000 jobs by 2027. It explains that the majority of lost positions would be in manufacturing sectors directly hit by tariffs, while the services industry would also be affected. Reduced household disposable income would force consumers to cut spending, and the resulting decline in trade volumes and investment would lower demand in transportation, construction, and professional services.

According to the report, a successful renegotiation of the USMCA could create 137,000 jobs in the U.S. and 98,000 jobs in Canada. In an email, Bea Bruske, President of the Canadian Labour Congress, stated that Canadian workers should not become bargaining chips in a trade war not of their making. She emphasized that many real jobs are at risk and the government must be prepared to protect them. However, she added that protecting Canadian workers does not mean signing a bad deal because Donald Trump threatens to withdraw from the agreement. Canada must clearly define its negotiating demands, establish non-negotiable red lines, and develop a comprehensive plan to safeguard workers and communities if the U.S. exits the pact.

The report identifies the most affected regions in Canada and the U.S. if the USMCA ends, including Ontario, Quebec, Manitoba, and New Brunswick in Canada, and Michigan, Indiana, Washington, and Iowa in the U.S. It notes that the hardest-hit industries in Canada would be automotive, metals, machinery, electronics, chemicals, and wood and paper products. Beth Burke, CEO of the Canadian American Business Council, said in an interview Tuesday that the economic impacts are real and any negotiations must be conducted with a clear understanding of the situation.

The report indicates that an ideal renegotiation of the agreement could benefit households by approximately $516 per year in the U.S. and $846 CAD per year in Canada. Burke stated that this benefit is significant, especially during a period of high living costs and widespread economic pressure.