Economic and Social Reports
How tariffs are conceptually reflected in key economic statistics

The effects of tariffs on Canadian exports or on imports into Canada will, over time (as they affect economic activities), be reflected in various statistical estimates published by Statistic Canada.

While some programs measure tariffs directly, others do not because of their underlying concepts. However, the impact of tariffs is embedded in data collected across multiple statistical programs that are used to calculate estimates such as the Consumer Price Index (CPI); various producer price indexes (PPIs); retail and manufacturing sales; and key macroeconomic indicators, including the balance of payments, gross domestic product (GDP), supply and use tables (SUTs), and government finances.

This note outlines how these effects are captured across various statistical programs.

Supply and use tables

The SUTs track the supply of products from domestic production and imports through their uses by industries as part of production, by households or government as final consumption, or as investment or exports.

SUTs are calculated at the national and provincial or territorial levels, on an annual basis. They form the benchmark estimates for the entire macroeconomic accounts, including the measures of GDP by income, expenditure and value added. The SUTs are available two and a half years after the end of the reference year.

For the SUTs, taxes on intermediate consumption and fixed capital formation by industries and final consumption by households will show the tariffs. The purchaser price of these expenditures will also embed the value of the tariffs.

The input–output models and related analytical products, which are based on the SUTs, will fully incorporate the impacts of any new tariffs with the release of the benchmark SUTs for 2025.

Gross domestic product by industry

GDP by industry projects the level of value added created through the production of goods and services on a monthly basis. It is the timeliest indicator of macroeconomic trends. Monthly GDP projects value added by industry from the latest SUTs with output (or revenue) indicators and the assumption of a static value added to output ratio for the projection period.

Monthly GDP by industry will reflect changes to the output of industries. However, the full impact of changes to their production functions—including any direct or indirect impacts of changes in tariffs on the relationship between value added and output—will only be fully reflected with the benchmarking process following the release of the 2025 SUTs.

Gross domestic product by income and expenditure accounts

GDP by income and expenditure accounts records the production of goods and services in the economy, the incomes arising from this production, expenditures on production, and the resulting saving (dissaving) and investment. Recording the information in a series of interrelated accounts means that analysts can formulate consistent interpretations of productive activity, income, expenditure, saving, investment, financing and wealth. The economic series estimates that appear in the sequence of accounts are consistent, because common definitions, classifications and valuations are used across the entire set of accounts.

Once imposed, the impact of tariffs will flow through the economy as the value of household expenditure and capital investment will be affected based on the increase in prices (mostly attributable to tariffs applied to imports). The costs for intermediate inputs used in the market and non-market sectors will also be affected. Higher prices for inputs could affect corporate surplus depending on the adjustments that may be made to the selling prices of goods.

International merchandise trade and balance of payments

The balance of payments covers all economic transactions between Canadian residents and non-residents. The current account is one of the key components of the balance of payments. The current account balance is the broadest indicator of Canada’s trade with the rest of the world. It covers transactions not only in goods, for which the international merchandise trade statistics are the source of information, but also in the form of services, investment income and current transfers.

For goods, tariffs do not directly affect export and import values. They are applied after the change of ownership, so no direct impact on these values is observed on the balance of payments. While Statistics Canada has access to information to quantify Canadian import tariffs, the agency would not be able to quantify tariffs imposed by other countries.

Consumer Price Index

The CPI is a key measure that tracks the average change over time in the prices Canadians pay for a typical basket of goods and services.

The prices included in the CPI are final prices paid by consumers, inclusive of all taxes on products such as the goods and services tax (GST), the provincial retail sales tax, or the harmonized sales tax (HST), as well as import duties; excise taxes; and any environmental, liquor and tobacco taxes, if applicable.

The CPI does not measure tariffs directly, but their effect is included in product prices. The tariff is paid by the importer, and some of it may be partially absorbed by the importer, wholesaler or retailer before being passed on to the consumer.

Producer price indexes

PPIs monitor price changes for businesses, across various sectors of the economy. They are categorized into three main types:

1. Output price indexes: These track the prices of finished goods and services produced by Canadian industries. Examples include the Industrial Product Price Index and the New Housing Price Index. Prices collected for the calculation of output price indexes exclude tariffs as these indexes measure the prices received by producers. Output price indexes do not measure the tariffs directly, but their effect may be included in the prices. Any inputs used in the production process that are imported and for which a tariff is applied may affect the prices charged by producers, as they may pass on this cost to their customers.
2. Input price indexes: These measure the cost of raw materials and inputs used by manufacturers. A primary example is the Raw Materials Price Index. Prices collected for the calculation of input price indexes include tariffs as these indexes measure the actual costs paid by producers. For any imported inputs for which a tariff is applied, there would be a direct impact on input price indexes.
3. Margin price indexes: These assess the difference between the purchase and selling prices in the wholesale and retail sectors. Examples include the Wholesale Services Price Index and the Retail Services Price Index. The purchase prices of wholesalers and retailers that are used in the calculation of margin price indexes include tariffs, as these indexes measure the actual prices paid by wholesalers and retailers for their products. For any imported products for which a tariff is applied, there would be a direct impact on margin price indexes.

Retail trade

The Monthly Retail Trade Survey (MRTS) measures the sales of retailers across Canada. It provides timely and detailed insights into consumer spending patterns by tracking sales from many types of retail businesses, such as clothing stores, motor vehicle dealers and online retailers.

The sales included in the MRTS exclude all taxes on products and services such as the GST, the provincial retail sales tax or the HST, as well as excise taxes.

Manufacturing sales

Manufacturing statistics capture vital data on production, employment and trade, playing an important role in assessing Canada’s economic activity. The Monthly Survey of Manufacturing sales data capture both domestic and export sales.

In the Annual Survey of Manufacturing and Logging Industries, sales are reported “free on board,” excluding excise taxes, provincial or territorial sales taxes, the HST or GST, trade discounts, returns and allowances, and charges for outward transportation by common or contract carriers. Tariffs imposed by importing countries on Canadian goods are not reflected in Statistics Canada’s monthly or annual manufacturing sales data. These tariffs are collected from the purchaser by the importing country’s government.

By contrast, if tariffs are applied to Canadian imports, then Canadian companies importing affected materials would bear the cost of these tariffs, which are treated as part of the cost of material and supplies and not detailed separately.

Wholesale trade

Statistics Canada provides information on the performance of the wholesale trade sector. The Monthly Wholesale Trade Survey presents data on monthly sales and inventory levels for merchants in Canada, representing an important indicator of the health of the Canadian economy. Wholesale sales data include sales within Canada and exports.

Like manufacturing statistics, sales are reported excluding sales taxes (the GST or HST, provincial sales taxes and the Quebec sales tax), returns, discounts, sales allowances, and charges for outward transportation by common or contract carriers. Tariffs imposed by importing countries on Canadian goods are not reflected in Statistics Canada’s monthly or annual wholesale sales data.

Similarly, if tariffs are applied to Canadian imports, Canadian companies purchasing these goods would incur the cost. Such tariffs are treated as part of the cost of goods sold but not detailed separately in the Annual Wholesale Trade Survey.