The real reason prices are exploding in Canada is not what you're told

The real reason prices are exploding in Canada is not what you're told

Facts matter, especially when families are stretching every dollar and business owners are watching margins shrink by the month. Canadians keep hearing that the jump in prices is because of one person: Donald Trump. That line has been repeated so often it has moved from speculation to accepted truth for many. But it does not stand up to evidence. When you trace the price of the clothes you buy, the electronics you use, the toys your kids ask for, or the tools a contractor relies on, the story is far more Canadian than the headlines suggest.

More than 90 percent of U.S. goods entering Canada are tariff-free under the USMCA. That is not political spin. It is drawn directly from current trade data. Nearly all the goods an average family buys at a mall fall into tariff-free categories. Appliances, consumer electronics, apparel, household goods, toys, sports equipment. These products are still crossing the border without added duties because they meet the rules of origin required under the agreement. Even with the surge in U.S. tariffs in 2025, the overwhelming majority of goods Canadians buy have not been touched by those measures.

Yet Canadians are paying more every month. The real question is why.

Start with the Canadian dollar. A weak dollar hits every imported product and every business that relies on U.S. equipment or materials. This year the loonie slid to levels we have not seen in years. It did not fall because of U.S. tariffs. It fell because investors around the world are losing confidence in the direction of Canada’s economic policy. Markets measure risk in real time and they punish uncertainty. When a government signals it is more interested in expanding taxes than expanding production, money leaves. When policies create friction for investment instead of competition for it, capital goes elsewhere. The value of our currency reflects that loss of confidence.

Investors have watched Ottawa attack the very sectors that built Canada’s economy. Energy, manufacturing, agriculture, and mining are the cornerstones of our prosperity. These are the sectors that pay wages strong enough to support families and communities. They also anchor the tax base that funds social programs. When the Prime Minister signals he is willing to delay, discourage, or block major resource projects, markets react immediately. The value of the dollar reacts with them.

Large companies are also turning away from Canada because of the carbon tax. The government argues that the tax is designed to “nudge behaviour,” but global firms do not operate based on nudges. They operate based on bottom lines. When they see billions in added costs over the lifespan of a project, they take their investment to jurisdictions that want them, not ones that punish them. Several companies have stated this publicly. Others have simply left quietly. The carbon tax increases the cost of transportation, production, and heating. Those costs show up in your grocery bill, your restaurant bill, your fuel bill, and every item moved by a truck. For many businesses, it is now the difference between expanding and retreating.

GST adds a second layer to the problem. Taxes compound. When the price of fuel rises, the cost of moving goods rises. Then GST is added to the final price. This is why a small shift in the cost of transportation can create a much larger shift in the price paid by consumers. Canadians often hear that the GST is a “modest” tax. Anyone who has looked at a receipt knows that is not how it works in practice. The GST hits the total, not the base. That means you are paying tax on tax. Critics call this double-dipping. They are not wrong.

Put these pieces together and you get a clear picture. The weak dollar, the carbon tax, and stacked sales taxes do far more damage to the cost of living than cross-border tariffs on a handful of goods. The media narrative that Trump is solely responsible for your higher grocery total or your blown shopping budget falls apart the moment you compare the facts.

If tariffs were the driving force, prices would spike only in the categories that are tariff-exposed. That is not what is happening. Prices are rising across the board because the problem is structural. It starts in Ottawa, not Washington.

The government’s own economic agenda confirms this. The Prime Minister announced a list of ten so-called nation-building projects. It was an opportunity to support the sectors Canada needs to strengthen: energy, critical minerals, and the infrastructure required to export both. These are the projects that attract investment, create high-income jobs, and support long-term economic growth. They are also the projects that would signal to global markets that Canada is serious about competing. Yet none of these priorities made the list. Oil and gas were absent. Mining was ignored. Transportation routes that would move Canadian products to global markets were pushed aside in favour of initiatives that sound good in speeches but do nothing to improve the economy families rely on.

This is what investors see. So does every business owner trying to plan for the next decade. Policies that treat major industries as political inconveniences instead of national assets drive investment away. Every lost project is lost revenue, lost income, and lost confidence. That lost confidence shows up first in the value of the Canadian dollar. It shows up next in the price of everything on your receipt.

Some in the media continue to frame this as a story about the United States. It is not. Canada has the power to bring prices down. The federal government could restore market confidence by supporting projects that generate real growth. It could reduce the carbon tax burden on businesses and families. It could review the GST structure so Canadians are not paying tax on tax. It could make long-delayed decisions that would unlock billions in investment. These steps would strengthen the dollar, reduce costs, and improve affordability far more effectively than blaming another country’s president.

When you look at your bill today, the explanation is not complicated. The pressures driving up prices are here at home. They can be fixed. But they can only be fixed by a government willing to face the facts, acknowledge its own role, and choose policies that support growth instead of hindering it.

Until that happens, Canadians will keep paying the price.