Canada collected more than $3 billion in retaliatory tariffs on U.S. goods before removing most of those levies in September, according to the Finance Department. This amount is significantly lower than the $20 billion the Liberal government projected in its spring election platform for the current fiscal year.

The tariffs were initially imposed in response to U.S. trade actions and were applied to a wide range of imports, including steel and aluminum. However, most tariffs were removed on September 1, 2025, as part of Canada’s efforts to ease tensions and advance trade discussions with Washington. Some levies—especially on products like steel and aluminum—remain in place for goods deemed non-CUSMA compliant.

Prime Minister Mark Carney defended the rollback, explaining that the cost of maintaining the tariffs on Canadian industries had started to outweigh their strategic value. He emphasized that Canada was among the few countries still imposing retaliatory measures, making them less effective and more economically burdensome domestically.

Finance Minister François-Philippe Champagne acknowledged that the decision to remove tariffs would impact the federal budget. The upcoming budget is expected to show a deeper deficit, partly due to lower-than-expected tariff revenues. However, he said the government’s priority remains supporting Canadian industries rather than generating revenue through tariffs.

Industry voices, such as the Canadian Steel Producers Association, argued that numerous exemptions watered down the potential tariff revenue. The Finance Department confirmed that recent exemptions resulted in forgoing an additional $78 million in revenues, which were effectively returned to affected Canadian businesses.

Experts like Bill Robson of the C.D. Howe Institute commented that while tariff revenue shortfalls are problematic amid a larger deficit, tariffs themselves are an inefficient revenue tool due to the broader economic damage they cause. He suggested that Canada explore less harmful ways to raise funds.

The full details of tariff collections and revenue implications will be disclosed in the federal budget announcement. However, the shift in policy signals a broader recalibration of Canada’s trade strategy, prioritizing long-term economic stability over short-term fiscal gain.