It's estimated that up to 500,000 Canadian jobs will be lost if the new U.S. President imposes 25% tariffs on Canada

Many Canadians, like me, spent Tuesday watching Donald Trump’s inauguration as America’s 47th president.

The pageantry, pomp and circumstance associated with the day is unparalleled. From the swearing in ceremony in the Capitol Rotunda to the inaugural parade and Liberty Ball, the day was a show of American strength, signals of power and hints of what Trump’s administration promises to change.

And there were a few key moments from Trump’s first days and speeches as number 47 that can and will impact Canada.

It’s no secret that Trump has Canada in his cross hairs. While signing executive orders on Inauguration Day, Trump threatened to impose 25% tariffs on Canada as soon as Feb. 1. Some Canadian businesses are bracing for steep increases to business expenses as a result. To cut costs, it is estimated that up to 500,000 Canadian jobs will be lost as a result of new tariffs.

Employers will need to plan for terminations and legal layoffs this year. Some will make labour reductions before tariffs are even imposed to proactively reduce risk.

With recent changes to employment standards legislation, employers must be careful to ensure statutory minimum entitlements are being paid on time and benefits continued for terminated employees during statutory notice periods. Some employers will seek to layoff employees temporarily (for up to 35 weeks) but should be mindful that rights to layoff are complicated and could trigger wrongful dismissal claims if not rolled out legally.

Trump also made an executive order on his first day to eliminate remote work for federal workers, ordering them back into the office, full-time. His goal, he says is to shrink the size of the federal government through attrition, confident that a considerable number of workers will opt to resign employment rather than return to the office.

In response to Trump’s executive order, Conservative Leader Pierre Poilievre said last week that should he become prime minister, he too would cut the Canadian federal public service.

On the remote work issue, Canada, in contrast to the U.S., has maintained a hybrid working arrangement for most government workers. Government workers in Canada have staged rallies and protests to resist return-to-work orders.

Trump’s order to return government workers to full-time in-person work is sure to influence how Canadian public and private employers approach remote work in 2025. Canadian business leaders will strongly consider eliminating remote work programs to mirror the business dynamics of America – our biggest trading partner.

Those watching the events on inauguration day likely also noticed the presence of tech leaders, including Mark Zuckerberg, Jeff Bezos, Elon musk and Sundar Pichai. Tech innovation development and dominance will be a powerful theme for Trump’s administration.

To compete, Canadian employers must also adapt to new tech, such as AI tools, and embrace innovation. AI is operating in most of our workplaces already with few employers harnessing or governing the power it brings. This too will be a key consideration for employers in 2025.

Donald Trump is changing the way employment looks in America. That coupled with a brewing trade war, Canadian employers should plan early to weather the unpredictable storm the early days of this administration may bring.

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

The content of this article is general information only and is not legal advice.

 

 

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