Canadian officials are weighing a proposal that would see Ottawa accept U.S. auto tariffs in exchange for a reduction on levies for vehicles compliant with USMCA, according to three sources on both sides of the border.
The proposal would also maintain an exemption for the value of American content in cars exported from Canada.
The Globe and Mail is not identifying the sources as they were not authorized to publicly discuss the top-secret talks.
Live at 1 p.m.: Our experts answer your questions about Trump’s latest tariff threat
One U.S. industry source with knowledge of the bilateral trade talks unfolding in Washington said this proposal has been discussed by Canadian and American negotiators. A Canadian industry source said Canada’s negotiating team had talked about such a proposal but it was unclear whether they had yet pitched it to their U.S. counterparts. A provincial source said it had been talked about with Canadian industry.
Prime Minister Mark Carney has promised a deal that reduces U.S. President Donald Trump’s tariffs on autos, steel, aluminum and forestry products. But so far, as The Globe has reported, the contours of an agreement for steel and aluminum have been clearer than one for autos. The two sides are aiming for a pact by Aug. 19, when Mr. Trump has threatened to impose tariffs of 50 per cent on a further US$20-billion of Canadian exports.
Not only is the auto industry central to the bilateral trade relationship, but it is politically crucial: The United States wants Canadian premiers to stop their bans on American alcohol sales as part of the deal, which would require the agreement of Ontario Premier Doug Ford, whose province contains most of the country’s auto industry.
Now, the first details of what a potential autos deal could look like are emerging.
Under the plan, according to the U.S. and Canadian industry sources, Mr. Trump’s auto tariff, imposed under Section 232 of the Trade Expansion Act of 1962, would be reduced from its current rate of 25 per cent on all Canadian auto exports that comply with the United States-Mexico-Canada Agreement.
In addition, all U.S. content in Canadian-made autos would continue to be excluded from the tariff calculation. If a Canadian-made car contains 50-per-cent U.S. content, for instance, the tariff is charged on only half the value of the car.
The Canadian industry source said Canadian officials had also discussed a proposal to have the tariffs apply only to any content in a vehicle that originated outside North America, which would have the effect of reducing the levies to a very small amount.
Canada’s top negotiator told U.S. counterparts Aug. 19 tariffs could halt trade talks, sources say
Two sources directly briefed on the talks said Canadian negotiators have been consulting with industry leaders to determine what concessions they could live with. A provincial source said that, in the case of the auto sector, the industry has said that it could survive a tariff of 10 to 15 per cent if U.S. content in the car were not subject to the levy. Because of the two countries’ integrated supply chains, the source pointed out, about 50 per cent of a Canadian-made car originates in the United States.
In addition to the auto industry consultations, one source said, negotiators have also consulted with agriculture, steel and aluminum industry representatives.
In separate negotiations with Mexico, the U.S. has demanded a requirement that would oblige all vehicles manufactured in Mexico and exported to the U.S. to contain at least 50 per cent U.S. content.
Gabriel Brunet, a spokesperson for Dominic LeBlanc, the minister responsible for Canada-U.S. trade, declined to comment on the auto proposal.
It was not immediately clear how receptive U.S. negotiators would be to the idea of a reduced auto tariff. The U.S. is also demanding that Canada drop all of its retaliatory tariffs on the U.S. auto sector.
Opinion: U.S. alcohol industry rightly fears a nasty hangover from Trump’s trade war with Canada
The Canadian industry source said that the U.S. has so far appeared to hold back on negotiating auto tariffs because they are its most powerful point of leverage. The source, however, expected that autos would be part of the deal, even if an agreement comes at the last minute.
One Canadian official, however, was skeptical that such complicated issues could be sorted out by Aug. 19. This source said that it was more likely the Aug. 19 deal would simply be for Mr. Trump to hold off on his next round of tariffs while talks continue. This source said that no deal on 232 tariffs would be possible without auto 232 levies being part of it.
Mr. Trump last year imposed Section 232 tariffs on steel, aluminum, autos and forest products. In the Washington talks, the U.S. is demanding that Canada agree to a long list of trade concessions in exchange for reducing – but not eliminating – those tariffs. Under such a deal, Canada would accept some level of U.S. tariffs without retaliating against them in exchange for not being hit with even higher tariffs.
Last month, Mr. Trump unveiled a plan to hit more Canadian goods with 50-per-cent tariffs under Section 338 of the Smoot-Hawley Tariff Act of 1930. This latest threat lit a fire under the previously sluggish talks between the two countries.
The Smoot-Hawley tariffs would target, among other things, alcohol, dairy products and electronic equipment. The largest tranche of tariffs would be imposed as retaliation against Canada’s retaliatory tariffs on U.S. autos.
Mr. LeBlanc has met with U.S. Trade Representative Jamieson Greer three times in as many weeks at the latter’s office in the Winder Building near the White House. In their most recent sit-down on Tuesday, the pair met for about an hour. The minister’s office said he remained in Washington on Wednesday.
Janice Charette, Canada’s chief negotiator, has been holed up at the Canadian embassy in Washington with officials and experts working on a deal.
The U.S. industry source said that, at last week’s meeting between Mr. Greer, Mr. LeBlanc and Ms. Charette, the U.S. gave Canada feedback on a proposal the Canadians had presented a few days earlier. The Canadian industry source said that Canada and the U.S. traded additional written proposals this week.
Ms. Charette last week told Mr. Greer that if there is no deal by Aug. 19 and Mr. Trump’s newest tariffs take effect, Canada would be forced to retaliate and negotiations would come to a halt, The Globe has reported. The U.S. industry source said the Americans understand the political pressures in Canada and are optimistic about a deal, but worry about the Carney government’s ability to sell it to the Canadian public.
Ottawa discussing trade concessions with U.S. in return for some tariff relief, sources say
A new report from the Canadian American Business Council concludes that since the U.S. and Canada began integrating their auto industries in 1965, the close connection has helped the North American industry maintain its competitiveness against Asian and European manufacturers. The report, prepared by Oxford Economics, points out that since single components cross the border up to eight times before a vehicle is completed, Mr. Trump’s tariffs are damaging the economy in both countries.
“The costs of higher tariffs fall not only on consumers via higher inflation but also on the manufacturing workers, states and provinces that tariff policy is designed to help,” the report says.
Beth Burke, the group’s chief executive officer, said her organization commissioned the report as part of an education campaign to soften the ground in Washington for a renegotiated trade deal. It has also launched games targeted at everyday consumers to raise more awareness on Main Street of how integrated the two countries’ economies are.
Despite all the trade talk since Mr. Trump won the 2016 election, people don’t always understand how important a market Canada is to the U.S. economy, she said.
“Canada isn’t just a neighbour or a trading partner. For many states, it’s their most important customer,” Ms. Burke said.

According to Fraser Institute, subsidies will total $87.7 Billion in 2024, including $44.7 billion federally and $43 from provincial governments.
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According to a study released by Fraser Institute, corporate welfare provided by Canada’s federal and province governments has tripled in the last three years and is choking economic growth.
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Study: GOLDSTEIN says corporate welfare is stifling the Canadian economy.
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The federal government alone will provide $44.7 billion of corporate subsidies in 2024, while the provinces and the federal governments together will contribute $43 billion.
This is more than three times the level in 2015, which was $25.1 billion.
The study stated that despite all this spending “an extensive research body shows there is little correlation between sustained and widespread economic growth, or the creation of jobs, and corporate subsidies.”
The massive increase in recent government spending for corporate welfare is a concern to all Canadians, said Alex Whelan. He was the co-author in the study of the fiscally conservative Think Tank, Eliminating Corporate Subsidies: An opportunity to boost growth.
It’s a wasteful expenditure at the cost of Canadian taxpayers, and puts the government in a position to pick favoured companies. “There are better policies to promote economic growth.”
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Government could reduce business taxes more than 80% according to a study
According to the study, by eliminating corporate tax breaks and transferring the saved funds into a broad corporate income tax reduction, federal and provincial governments can lower taxes for businesses by over 80% today, thus removing a further anchor from the Canadian economy.
The study concluded that between 2007 and 2024 the provincial governments had spent $474 billion on corporate welfare, while the federal government has spent $112,9 billion. This totals $787.3.
The amount of corporate welfare given today is far greater than the amounts that were given in the pre-pandemic year.
According to the study, instead of enhancing their products and services, and improving how they produce them to boost profit and compete, corporate welfare encourages businesses to continue seeking government subsidies (also known as “rent-seeking”) instead of increasing productivity through research and design.
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Carolyn Rogers, senior deputy governor at the Bank of Canada, has described low productivity as an “emergency to break glass”.
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Ontario surpasses Quebec in corporate subsidies, new report says
Ontario, the New Corporate Welfare King
According to a poll, 70% of Canadians believe that crushing taxes are destroying the standard of living.
If nothing is done, the Organization for Economic Co-operation and Development (OECD) has warned Canada that its real GDP per capita — which measures the country’s standard of living — could be among the lowest of all 38 industrialized nations from 2020-2060.
Mark Carney, the Prime Minister of Canada, is working to change this by increasing foreign investment to Canada in a decade to lessen our economic dependence on the United States.
It will take time.
Bloomberg News reported that Carney had the lowest economic growth rate of any Canadian prime minister during his first full year of office — a negative 0.5% growth.
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On Monday night, the five candidates vying to become leader of Ontario Liberal Party are set to debate each other.
Voting for a new leader online will start on November 9 and finish on November 20. The winner is chosen on the 21st.
Please see below for more information on each candidate:
Navdeep Bain
Navdeep will make the transition from federal politics to Ontario Liberal Party leadership.
Bains was a Member of Parliament in Mississauga Brampton South between 2004 and 2011. In 2015, after losing the election in 2011, he was elected to the House of Commons for the newly created riding of Mississauga – Malton.
From 2015 to 2021, Justin Trudeau, the former Prime Minister, was Justin Trudeau’s Master of Innovation, Science and Industry.
Then he worked for Rogers Communications as Chief Corporate Affairs officer before quitting to become Liberal Leader.
His campaign is centered around restoring Ontario’s promise. If you came to work, played hard and followed the rules you would be able to build a decent life. Job security and a good salary. “A home that you can afford, in a community with reliable and safe public services.”
Stephanie Bowman
Stephanie Bowman, one of the two Ontario Liberal MPs actively running for leadership is the latest candidate.
Bowman represents Don Valley West, and she has done so since 2022 when she replaced former Premier Kathleen Wynne. She is also the Ontario Liberal House Deputy Leader and Finance critic.
She was the co-chair of Rob Cerjanec’s campaign before declaring that she would be leading the Liberal Party. Rob Cerjanec is the Ajax MP who quit the race for the Liberal Party leadership in July.
Bowman worked as an accountant for 25 years before joining the public service. He was also on the Board of Directors of the Bank of Canada.
She stated that she was running for the Ontario election because “the province lacks responsible leadership, sound decisions and a focused government on its people.”
Lee Fairclough
Lee Fairclough represents Etobicoke Lakeshore, the other Liberal candidate in this race.
Fairclough was elected to her first term as MPP in 2025 after she defeated the incumbent, who had narrowly defeated her in the Ontario elections of 2022. She is the Liberal’s critic for addictions, homelessness and hospitals.
Her career began as a radiotherapy therapist in Princess Margaret Hospital. She was president of St. Mary’s General Hospital at the time of the COVID-19 Pandemic.
Her campaign, which is based on her background in health care, has focused on regaining public trust and increasing access to healthcare across the province.
Eric Lombardi
Eric Lombardi, an advocate for housing on the political stage is a newcomer. He has high ambitions with his debut campaign.
Lombardi started More Neighbours Toronto, a group that aims to reform housing zoning in 2021. Later, he became chair of Build Toronto which works to implement policies that promote Toronto’s prosperity and growth.
He also helped the Ontario Liberal Party develop their housing program.
Lombardi released a platform that includes 13 initiatives, including helping youth in Ontario and restoring the economic situation.
His campaign website stated: “I’m working to create an Ontario in which people are able to afford a house, have a fulfilling career, raise their families with security and believe that the public institutions work for them.”
Dylan Marando
Dylan Marando, a political staffer who has worked behind the scenes for nearly 15 years, is now putting forward himself as the potential next Ontario Liberal leader.
Marando has worked for former Premier Dalton McGuinty, Wynne and Trudeau.
Marando said on Breakfast Television in early this year, “I’ve put many tools into the toolbox. Now my team and me… are committed to using these tools to grow our party, beat Doug Ford, and revitalize Queen’s Park.”
Marando stated that he was involved in a number of initiatives, including the reforms to public sector accountability, progressive parental leaves, tax reductions for small business, Canada’s National Housing Strategy and child care at $10 per day.
He worked in politics before joining a medical technology global company.
Marando has said that he will run for MPP at the next election, regardless of whether he is elected as the Liberal leader.
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Newfoundland & Labrador, according to Canada’s highest military commander, has an important role in defence due to its geographic location.
There have been increasing concerns about Canada’s safety since U.S. president Donald Trump assumed office for the second time. This is due to increased geopolitical instabilities and Trump’s insults of Canada’s sovereignty.
Mark Carney, the Prime Minister of Canada, announced an increase in funding for Canada’s defense. Carney, along with NATO leaders last summer, promised to raise defence spending by five percent of GDP in the coming decade.
The Chief of Defence Staff, Gen. Jennie Cairignan, said that this province plays a crucial role in the security of the nation.
Carignan, CBC News, said that Labrador, and Newfoundland, are strategically located and offer incredible opportunities. This is true both for the base, but also training, and for positioning various sensors.
In response to a question about Trump’s repeated statements that the U.S. controls Greenland, coupled with N.L.’s geographic location and whether N.L. Carignan responded that Canada is closely involved with NATO and North American Aerospace Defense Command operations. Bases, training, and sensor positioning for defensive purposes are all ways that Canada contributes to NATO.
Carignan, who attended the National Leader Enhanced training Session of Junior Canadian Rangers in St. John’s for the closing ceremony said: “Newfoundland & Labrador has so many contributions to Canada’s overall defense.” N.L. N.L.
Rise recruitment
Ottawa reported in April that the Canadian Armed Forces reached their highest level of recruitment in thirty years. They enrolled 7,310 new members during the last fiscal year, exceeding the target set at 6,957.
Carignan said, “We are seeing Canadians all over the country. There is an incredible amount of interest for the Canadian Armed Forces.”
She added that there are many opportunities for Canadians to participate in this mission.
Carignan, referring to the recent announcements by Canada of spending billions on defence, said: “With additional investment right now, you can develop and modernize your equipment.” This is a very exciting time for Canadian Armed Forces personnel.
Ottawa announced in March a plan worth $35 billion to upgrade defence infrastructures throughout the Far North, to protect Canada’s sovereignty and defend the Arctic.
Joanne Thompson, MP for St. John’s East in St. John’s East announced that up to eight billion dollars of this money will go to Labrador’s Labrador’s Goose Bay 5 Wing to improve airfield operations facilities and infrastructure. Specifics are to be revealed at an unknown date.
Carignan didn’t share any more information about the use of this money, but said it was used to strengthen Goose Bay’s position and contribute to the overall mission.
She said they needed to complete the analysis to make sure the correct work was prioritized.
We won’t have the funds to accomplish everything at once, even though we will receive new funding. Carignan said that it would be a matter of prioritizing the work and sequencing.
She stated that the work would still include airfield improvements and operations, as well as electrical system underground.
Pierre Poilievre, Conservative leader and former Premier of Newfoundland and Labrador said that N.L. The province could get additional work relating to the increased spending on defence, including the construction of the new Continental Defence Corvettes – the name given to a new proposed fleet that would replace existing coastal defense ships in the country.
Poilievre said that there may also be additional opportunities for Royal Canadian Navy supply ships.

The group, which represents First Nations in British Columbia, is urging the governments of Alberta and Ottawa to stop efforts to build the West Coast Pipeline. They claim that expanding the oil sector will increase climate change and natural disasters.
The Union of British Columbia Indian Chiefs wrote to Alberta Premier Danielle Smith and Prime Minister Mark Carney in an open letter that the destructive and catastrophic consequences of increasing fossil fuel production go far beyond any one territory.
Climate change is already affecting this country. “Every new fossil-fuel project only deepens this crisis.”
This letter was sent Sunday morning, one day after B.C. The government declared a state-of-emergency as over 100 wildfires raged across the province. One of them forced nearly 25,000 residents to leave two communities in eastern Vancouver. Nearly half the wildfires burned out of control.
It also said that the group will publish the letter in honor of the International Day of the World’s Indigenous Peoples, which is celebrated on Sunday. The Indigenous group wanted to reiterate its opposition to the pipeline due the government’s failures to consult and work with the First Nations.
The government said it has developed a corridor for the project, identified potential development partners and publicly promoted its economic case.
The consultation will be ineffective if the First Nations only discuss a project that is already predetermined.
Karah Folk from Alberta’s Ministry of Indigenous Relations told CBC News in an e-mail that this project will provide “long term benefits” to Indigenous communities. They will also be consulted on its progress.
Folk stated that “our government is committed to continuing dialogue with First Nations as well as all other partners in this ongoing work.”
Carney’s and Smith’s offices didn’t immediately reply to Sunday request for comment.
A 1,250-kilometre pipeline on the West Coast would transport up to one million barrels per day of crude oil from Bruderheim in Alta. to a Port near Delta, B.C. for export to international markets.
Alberta is the project proponent. Trans Mountain, Alberta Petroleum Marketing Commission, and Pembina Pipeline Corp. would own the pipeline.
Ottawa has taken a first step in the direction of giving the project an official national interest status under the Building Canada Act. This would enable the government to expedite the pipeline while skirting some environmental regulations.
According to the government, it will accept public comments on this designation until mid-September.
Ottawa and Alberta agreed that the Pipeline would only be built if a project to store carbon called Pathways was completed. Pathways is a carbon storage project owned by several companies that would stop emissions from increasing oil production entering the air. It is linked to the pipeline’s success. The pipeline would transport carbon emissions to a storage facility near Cold Lake in Alta.
The Canadian Climate Institute, a think tank, said that in July that the emissions that would be released from increased production enabled by a new West Coast Pipeline would far exceed what Pathways could prevent entering the atmosphere.
Carney’s Major Projects Office in Calgary has approved and proposed several major projects, including the West Coast Pipeline.
Ottawa said that the projects were of national importance and would strengthen Canada’s autonomy. They also provide economic benefits and advance Indigenous interests, as well as meet Canada’s climate change targets in an ever-changing global environment.
Building Canada Act defines the regulatory path for projects.
To date, the Building Canada Act has been passed by the Conservatives and three projects have received the designation of national importance under this act.
These projects include the Grays Bay Road and Port Project in Nunavut; the Mackenzie Valley Highway project in the Northwest Territories; and the Nuclear Waste Management Organization’s deep geological repository located in northern Ontario.