Quebec’s trade relationship with the United States has become an increasingly important economic pressure point, and a new analysis puts numbers on what could be at stake. The 2026 Prospera economic barometer estimates that current U.S. tariffs, existing trade measures and Canadian counter-tariffs could reduce output in some of Quebec’s most exposed industries by between $5.3 billion and $6.6 billion.
When the wider effects on suppliers, workers and household spending are included, the analysis estimates that between 17,000 and nearly 23,000 jobs could be at risk. The findings arrive as manufacturers are already navigating new tariffs, changing supply chains and weaker U.S.-bound trade, raising a larger question about how much economic disruption could persist if the dispute becomes a longer-term feature of Canada–U.S. commerce.
The Headline Estimate Is a Range, Not a Forecast
The most important detail behind the $6.6-billion figure is that it represents the upper end of a modeled range rather than a prediction that Quebec will definitely lose that amount of production. Prospera examined ten economic subsectors considered particularly exposed to the trade measures and calculated possible net output reductions ranging from $5.3 billion to $6.6 billion. The same scenarios produced an employment exposure of between 17,000 and nearly 23,000 jobs after broader economic effects were considered.
That distinction matters. A job classified as “at risk” is not necessarily a job that will disappear. Businesses can redirect exports, absorb some costs, change suppliers, raise prices or qualify for tariff relief. Similarly, the output estimate should not be confused with an equivalent decline in Quebec’s overall GDP. It refers specifically to net production losses modeled in the industries examined, making the figures better understood as a measure of economic vulnerability under the study’s assumptions than as a final tally of damage.
Quebec’s Exposure to the U.S. Market Is the Core Vulnerability
The scale of Quebec’s cross-border commerce helps explain why changes in U.S. tariff policy can create such large economic effects. Prospera found that the ten subsectors it studied exported $120.6 billion worth of goods worldwide during the 12 months from August 2025 through July 2026. Of that amount, $55.3 billion went to the United States. Collectively, those industries represented 68% of Quebec’s merchandise exports to the U.S. during the period examined.
The concentration is visible in official trade data as well. Quebec exported about $84.8 billion in goods to the United States during 2025. Major products included $7.38 billion in unwrought aluminum and aluminum alloys, $6.4 billion in aircraft, $4.4 billion in aircraft engines and nearly $2 billion in paper excluding newsprint. That mix shows why the dispute reaches beyond one recognizable industry. Quebec’s exposure stretches across metals, aerospace, forest products, machinery and advanced manufacturing, tying thousands of businesses and suppliers to changes in access to the American market.
Electrical Equipment and Paper Appear in the First Risk Picture
Prospera constructed more than one picture of tariff exposure because not every U.S. measure operates in the same way. In its first assessment, which covers duties that can be more directly connected to affected products, electrical equipment and paper stand out. Quebec’s own tariff guidance says Section 338 measures currently cover various electrical, construction, plastics, paper and paperboard products, with some Canadian products facing additional U.S. duties of 50%.
Paper is hardly a minor export category for Quebec. During the first half of 2026 alone, Quebec exported roughly $1.1 billion of paper other than newsprint to the United States, making it one of the province’s ten largest U.S.-bound product categories. The challenge for producers is therefore not limited to paying a tariff at the border. A duty can change the price seen by an American buyer, alter purchasing decisions and squeeze margins when competing products are available from suppliers facing different trade conditions. For mills and manufacturers operating on large volumes, relatively small changes in orders can become meaningful quickly.
Metals Push the Upper-End Scenario Higher
The picture becomes more serious when steel, aluminum and metal-derived goods are included. Prospera says its second assessment adds tariffs whose application sometimes depends on the amount of metal contained in a product, requiring more assumptions and making the estimates less precise. Under that broader scenario, fabricated metal product manufacturing shows the strongest combination of exposures, while primary metal manufacturing joins electrical equipment among the industries identified as particularly vulnerable.
As of September 23, Quebec’s government listed U.S. tariffs of 50% on steel and aluminum, 25% on certain derivatives and separate rates for several categories of metal-intensive industrial equipment. That creates exposure at multiple stages of production. A Quebec company may export primary aluminum, fabricate a metal component, or sell equipment containing significant amounts of affected metals. The consequences therefore depend on product classification, metal content, origin rules and other trade provisions rather than simply whether a company considers itself part of the steel or aluminum business.
Counter-Tariffs Create Pressure Inside the Supply Chain
The study also recognizes an important complication: Quebec companies can be affected while importing goods, not only while exporting them. Canada expanded its countermeasures on September 8, 2026, imposing tariffs of 15%, 25% or 50% on products covering $27.6 billion of U.S. imports. Targeted categories include steel and aluminum, agricultural equipment, appliances, electronics, pulp and paper, dairy products and other goods.
That means a manufacturer could face weaker demand for products sold into the U.S. while simultaneously paying more for an American-made input used in Quebec. Prospera describes this as a dual exposure: U.S. duties pressure exports, while Canadian counter-tariffs can affect supply chains. Ottawa has maintained a remission process for exceptional cases, including situations where affected inputs cannot reasonably be sourced within Canada or from non-U.S. suppliers. The existence of that process illustrates how interconnected the two economies remain; replacing an established supplier is not always as simple as buying the same component somewhere else.
The Job Risk Extends Beyond the Factory Floor
The estimate of nearly 23,000 jobs at risk includes more than people directly producing goods that cross the border. Prospera says its employment calculation incorporates direct, indirect and induced effects. Direct effects can include activity inside the affected industry. Indirect effects spread through suppliers and other businesses serving that industry, while induced effects arise when changes in employment and income alter household spending elsewhere in the economy.
Statistics Canada uses the same basic categories in its provincial input-output multiplier framework, which measures how a change in demand for one industry can affect output, GDP, employment and imports elsewhere. Consider a metal fabricator that loses a major U.S. order: fewer production hours can also mean reduced purchases from trucking companies, maintenance contractors, packaging suppliers or machine shops. If earnings and employment subsequently fall, spending at restaurants, retailers and other local businesses may soften as well. That is why an export shock can produce a job effect larger than the number of positions located directly inside exporting plants.
Trade Data Already Show a Changing Export Pattern
Quebec’s trade numbers provide some real-world context for the modeled risks. During the first seven months of 2026, merchandise exports to the United States were 6.3% lower than during the same period of 2025, according to the Institut de la statistique du Québec. Yet exports to countries other than the United States increased by 15.0%. Total merchandise exports were consequently down only 0.3% on the same current-dollar, non-seasonally-adjusted basis.
The data also show why it would be misleading to describe Quebec trade as moving uniformly downward. Overall international exports jumped 7.2% in July from June in seasonally adjusted constant-dollar terms, helped by strong gains in aircraft, aluminum, aerospace parts and iron ore. Those movements suggest businesses still have markets and areas of strength outside the immediate tariff pressure. At the same time, growth outside the United States does not automatically replace a lost American customer. Geography, transportation costs, product standards and established supply relationships can make diversification a gradual process rather than an immediate substitute.
Aluminum Illustrates the Stakes for Quebec Regions
Few products demonstrate Quebec’s American exposure more clearly than aluminum. In 2025, the province exported approximately $7.38 billion in unwrought aluminum and aluminum alloys to the United States. The U.S. accounted for 81.5% of Quebec’s worldwide exports in that product category that year. During the first half of 2026, U.S.-bound unwrought aluminum exports were still worth roughly $4.02 billion.
The sector also carries regional significance. The Aluminum Association of Canada says primary aluminum operations support more than 7,700 jobs in Quebec, alongside thousands more positions in processing, equipment and supply businesses. Current U.S. duties of 50% on steel and aluminum therefore matter well beyond the value of metal crossing the border. Smelters purchase services, equipment and materials from surrounding communities, while downstream manufacturers turn aluminum into higher-value products. When Prospera’s broader tariff scenario shifts more risk toward primary and fabricated metals, it captures an economic chain that extends well beyond any single plant or shipment.
Governments Are Trying to Cushion the Adjustment
Federal and provincial governments have responded with programs intended to reduce the immediate financial strain. Ottawa announced $7.5 billion in new and enhanced tariff-related support in August, on top of nearly $25 billion it said had already been committed since U.S. tariffs began. The new package includes an additional $1.5 billion for the Regional Tariff Response Initiative, aimed partly at providing liquidity and adjustment assistance to small and medium-sized businesses.
Quebec has created its own set of measures. The FORCE program targets liquidity needs among eligible manufacturing and primary-sector businesses with annual revenue of at least $2 million, while a separate emergency program serves qualifying smaller companies. Under the latter, eligible firms with revenue between $200,000 and $2 million can obtain loans of up to $150,000. Businesses generally must demonstrate significant U.S. exposure and tariff-related financial pressure. Other provincial initiatives focus on export diversification, productivity, training and working capital—signs that policymakers expect adaptation to involve more than simply waiting for tariffs to disappear.
The Bigger Risk Is a Longer Investment Slowdown
The immediate numbers attract attention, but the longer-lasting economic question may be what businesses stop doing because trade conditions have become harder to predict. The Bank of Canada reported in July that U.S. tariffs and trade-policy uncertainty had already contributed to weaker exports and uneven growth nationally. It expects investment outside the oil and gas sector to recover, but to remain on a lower path than before the tariff shock for some time.
Prospera reaches a similar concern from a Quebec perspective. Its broader index finds that Quebec’s structural prosperity factors have improved substantially since 1980, supported by investment, research and development, energy efficiency and improvements in human capital. The report nevertheless warns that persistent trade tensions could interfere with investment and innovation and eventually weaken those gains. The $5.3-billion-to-$6.6-billion output range is therefore only part of the story. The more durable test will be whether Quebec companies can preserve investment, productivity and market diversification while adapting to a U.S. trade environment that has become significantly less predictable.
