-- United States tariffs remain topical for Canadian provinces, especially with the upcoming CUSMA trade deal review, but regional outlooks have also been sharply recast since the onset of the Iran war, said National Bank of Canada.
Combined with acute / targeted damage stemming from U.S. trade protectionism, the oil price shock threatens to exacerbate regional differences in economic and fiscal performance, noted the bank.
Economic concentration has proven itself a reliable indicator of the volatility in provincial growth and finances, the bank pointed out. Traditionally 'diverse' economies may not benefit from budgetary tailwinds to the same degree as resource /oil-levered provinces, and are also likely to continue facing tariff-related headwinds.
Others, with less exposure to the manufacturing sector, will remain relatively shielded, assuming CUSMA remains intact, it added.
To this end, National Bank stresses the importance of looking at Canada's tariff exposure through a regional / sectoral lens.