On April 2, 2025, Donald Trump announced a sweeping expansion of U.S. tariffs, accelerating a shift away from a rules-based international trading system toward one increasingly shaped by American economic power. For Canada, the challenge is not simply to absorb higher tariffs. It is to adapt an economy deeply integrated with the U.S. market to a more unpredictable trading environment.

This post begins tracking the performance of the Canadian economy by industry since April 2025. The figures provide an initial baseline, not a final verdict on the consequences of the tariff war.

Understanding the industrial response

Statistics Canada organizes economic activity through the North American Industry Classification System (NAICS), a nested framework that allows performance to be examined at different levels of detail. Broad T-level aggregates include goods-producing and services-producing industries, followed by 20 two-digit NAICS sectors, subsectors, industry groups, industries and six-digit national industries. This hierarchy allows economic shocks to be traced from broad sectors down to individual industries.

The underlying market mechanism matters. A competitive market economy responds to changes in relative prices by adjusting production, suppliers, investment and the logistics connecting them. Businesses may react immediately to a new price signal, but building alternative supply chains, redirecting trade and establishing new productive capacity can take years.

Since April 2025, repeated and often unpredictable changes in U.S. tariffs have altered the relative prices of competing products from different countries. This uncertainty makes it harder for businesses to determine where to invest, which markets to serve and which supply chains will remain commercially viable. Even when the direction of change is clear, uncertainty over the next policy decision can delay the investment needed to respond.

The initial industry-level results

The following table reports changes in economic output measured as GDP at basic prices in chained 2017 dollars. Statistics Canada Table 36-10-0434-01.  This measure tracks changes in real output, with the effects of price changes largely removed.

Industry Aggregate	Code	Change in real output
Information and communication technology, manufacturing	T014	+4.7%
Information and communication technology sector	T013	+3.1%
Information and communication technology, services	T015	+3.1%
Energy sector	T016	+2.8%
Business sector industries	T004	+2.1%
Services-producing industries	T003	+2.1%
All industries	T001	+1.9%
Industrial production	T010	+1.5%
Goods-producing industries	T002	+1.3%
Public sector	T018	+1.0%
Non-business sector industries	T007	+0.6%
Durable manufacturing industries	T012	+0.4%
Non-durable manufacturing industries	T011	−0.8%

One pattern stands out: the four strongest industry aggregates are all AI-adjacent, encompassing information and communication technology (ICT) and energy. ICT manufacturing leads with growth of 4.7%, followed by the broader ICT sector and ICT services, each at 3.1%, and the energy sector at 2.8%.

This is a potentially important signal. AI development depends on computing equipment, semiconductors, communications networks, data centres and substantial supplies of electricity. The performance of these enabling industries deserves attention as Canada adjusts to the changing trade environment.

The figures do not establish that AI investment caused this growth, nor that it will continue. They do, however, identify a divergence worth investigating: AI-adjacent industries are performing relatively well while other parts of the economy, particularly manufacturing, show weaker results.

Overall real output increased by 1.9%, but this headline conceals considerable variation. Goods-producing industries grew 1.3%, compared with 2.1% for services-producing industries. Durable manufacturing increased only 0.4%, while non-durable manufacturing contracted by 0.8%.

These differences matter because tariffs can affect industries through several channels: higher input costs, lost market access, changing competition from foreign suppliers and uncertainty that discourages investment. Broad aggregates cannot reveal which individual industries are adapting successfully, redirecting exports or losing market share. They provide a starting point for examining those questions in greater detail.

An adjustment measured in years

These results are an early snapshot, not a final assessment of the tariff war. It may take another three to five years for the scale of the industrial adjustment to become clear. The maturation of new supply chains, productive capacity and alternative export markets could take up to a decade.

Markets respond quickly to changing prices, but industrial adaptation takes longer. Businesses must identify suppliers, redirect transportation and logistics, secure financing, develop customers and sometimes build entirely new production facilities. Uncertainty over future tariff decisions can delay these responses further.

Sustained monitoring is therefore essential. Industry-level data can help identify where Canadian businesses are adapting, where production and employment are under pressure, and where transportation, infrastructure, financing or market access are impeding progress. Tracking AI-adjacent industries alongside traditional manufacturing will also help determine whether technology-related growth is strengthening the wider economy or coexisting with persistent weakness elsewhere.

The objective is not simply to document economic damage after it occurs. It is to identify emerging problems early enough for governments and businesses to consider practical solutions.

Canada’s response to the tariff war must be judged over years, not months. The task now is to establish a credible baseline, monitor the changing evidence and use it to guide the investments and adjustments needed to build a more resilient, productive and diversified economy.