How to tariff-proof your finances

This news comes at a time when household finances in Canada are already stretched. A survey by Equifax Canada released in August showed that 29% of Canadians are already using credit and savings to cover everyday expenses.

What to do if your income is threatened

If you think your employment could be disrupted in the foreseeable future, Kristy Rachkowski, chief member experience officer at Your Neighbourhood Credit Union in Sault Ste. Marie, Ont., recommends taking the following steps:

• Take an inventory of your monthly spending and identify the things you must pay for. Think groceries, rent or mortgage payments, other debt servicing, utilities, and transportation expenses.
• Identify the monthly expenses that can be reduced should you lose your job, including non-essentials like entertainment, charitable giving, commuting costs, and child care.
  
• Avoid adding new high-interest debt, for example by making credit card purchases that can be put off.
• Add to or establish an emergency fund to draw on in case you lose your job or face an unexpected expense such as a furnace repair, uninsured dental work, or veterinary surgery. “Tariffs serve as a reminder why having accessible savings matters,” Rachkowsky says.

What does an emergency fund look like?

Ideally an emergency fund should be able to cover three to six months of essential living expenses. “For some people that sounds like a really high number, so if you’re not there, it’s OK. Any amount of savings helps to build that buffer,” Rachkowsky says. “Even a small cash cushion can make a difference.”

Your emergency fund can be held in a tax-free savings account (TFSA) or a non-registered, taxable account. The key thing is that it should be accessible in a pinch, and can be withdrawn any day of the week (this rules out guaranteed income certificates). It should also generate a return, so that it doesn’t lose value to inflation, but not be subject to market volatility like stocks or bonds with maturities greater than a year. The usual go-to is a high-interest savings account (HISA).

What if you have high-interest debt?

The decision to set aside money in an emergency fund becomes more complicated if you have consumer debt such as a credit card balance, payday loan, car loan, or instalment payments to make. The deciding factor then might be the rate of interest you’re paying on this debt, which may dwarf the interest you might earn with a HISA.

“The higher the rate, the higher you want to prioritize paying that off,” Rachkowsky says. The interest on credit-card debt typically exceeds 10% and should be dealt with first. But if you have a lower-interest car loan, it may make sense to divide your attention between emergency savings and debt repayment.

Whatever you do, don’t let tariffs lead you to make extraordinary purchases of goods you think will cost more in the near future, Rachkowsky advises. The future is impossible to predict and panic buying almost always ends in regret.

The news around tariffs can make families anxious. Having a plan and a budget in case the worst happens can at least remove some of the uncertainty, she notes. “Control what you can. Stick to your plan if you have one. Pay attention to what’s happening but don’t overreact.”

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Read more about saving:

• How to find room to save in 2026—even with tight budgets
• Canadians are demanding more local products as retailers face pressure to respond
• Bank of Canada holds interest rate at 2.25%, warns trade war could sabotage recovery
• The best no-fee high-interest savings accounts in Canada right now

About Michael McCullough

Michael is a financial writer and editor in Duncan, B.C. He’s a former managing editor of Canadian Business and editorial director of Canada Wide Media. He also writes for The Globe and Mail and BCBusiness.

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