Ontario’s order for new subway trains could be hit by Canadian counter-tariffs

Canada’s retaliatory tariffs on products from the United States could significantly increase the cost of driverless trains currently on order by the provincial government for the Ontario Line in Toronto.

On Tuesday, Canada unveiled a list of some 700 items that would be subject to tariffs when entering the country from the United States, including rail locomotives running on electrical power.

The retaliatory tariffs were the latest twist in a growing trade war and could apply to self-driving, electric trains ordered by the Ford government for the Ontario Line that will be built south of the border.

In 2022, Infrastructure Ontario signed a $9 billion contract with a consortium of companies, including Hitachi Rail, to provide trains, rolling stock and maintenance for the Ontario Line, a new downtown relief subway route in Toronto.

Hitachi’s trains are built at a facility in Maryland in the United States and, before the Ontario Line is complete in the early 2030s, will be shipped to Toronto and across the border.

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If the current tariffs remain in place when the order is completed, substantial tariffs could be slapped on the trains by the federal government.

A Metrolinx spokesperson didn’t directly address questions about the potential tariffs in a statement sent to Global News.

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“As with all provincial agencies, Metrolinx always makes every effort to procure from Ontario and Canadian-based companies,” they wrote.

“We will continue to support our municipal, provincial, and federal partners in responses to the United States tariffs.”

The federal government’s Department of Finance, which leads tariff decisions, said the counter-levies were a “focused and strategic” move, with targeted exemptions that can be applied if the tariff would hurt the domestic economy.

“Requests for remission of the new counter-tariffs will be considered by the Department of Finance to provide targeted surtax relief on an exceptional basis, where necessary to mitigate unintended negative impacts on the Canadian economy,” they wrote in a statement.

But critics say the situation was avoidable.

Ontario NDP Leader Marit Stiles, who has repeatedly questioned why a Canadian company wasn’t given the Ontario Line contract in 2022, said the situation could have been avoided.

“When the province signed this agreement, we sounded the alarm over and over again. Good jobs that would be transformative for Thunder Bay went down south because of choices this government made,” she wrote in a statement.

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Alstom, which has facilities in Canada, previously confirmed to Global News it had submitted a bid to build the Ontario Line trains, but lost out.

Work on the Ontario Line is well underway in Toronto, with tunnel boring machines working beneath the city, but it is not expected to be completed until the early 2030s.

It is not clear exactly when the purchase and import of U.S.-made trains will take place, and whether the current tariffs will still be in place when the order is made.

If the tariffs remain as they are and Metrolinx or Hitachi are not eligible for a federal tariff exemption could add substantially to the cost of the trains.

Ontario Premier Doug Ford addressed the potential of increased prices in Canada as a result of the trade war on Monday.

“It is going to hurt, that’s the cost of war,” he said when asked if Canadian tariffs were also a tax on Canadian people.

“We’ll wait it out for two years, even if he lasts two years, but we’ll wait it out, and hopefully (American voters) will come to their senses when they see the pain he’s putting on the American people.”

The total value of the contract signed with a consortium that features Hitachi and includes rolling stock operations and maintenance is $9 billion.

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The Ontario Line is now predicted to cost $34 billion when it is completed.