Canada, U.S. far apart on tariff deal as deadline looms: sources

Canada and the U.S. remain far apart as negotiations toward a tariff deal continue ahead of U.S. President Donald Trump's latest deadline, according to sources.

The sources said the federal government does not believe a tariff deal is imminent because there are still major disagreements between the two sides, and they remain far apart on some issues that need to be resolved.

Canada-U.S. Trade Minister Dominic LeBlanc briefed his provincial and territorial counterparts on the state of the negotiations on Friday. He held a separate briefing with members of the prime minister’s advisory committee on Canada-U.S. economic relations. The sources are familiar with the briefings but were not authorized to speak publicly.

Canada and the U.S. have ramped up trade talks after Trump threatened to slap a hefty 50 per cent tariff on hundreds of Canadian goods starting Aug. 19.

One source with knowledge of the talks said optimism on the Canadian side is eroding and the Americans are not budging from their latest offer. That offer includes a willingness to halve the sectoral tariffs on autos to 12.5 per cent, an offer that the Canadian side believes is not good enough, the source said.

Quebec's Economy Minister Bernard Drainville, who was briefed by LeBlanc, said a big gap remains between Canada and the U.S.

“There is still no agreement; in fact, they are quite far from reaching one," said Drainville. "At the moment, there is no indication that Mr. Trump might postpone the application of the 50 per cent tariffs."

Erin O’Toole, former Conservative leader and member of the prime minister’s advisory committee who received a briefing, also described the two countries' positions as "still very far apart."

"So while there's optimism in terms of talking and a willingness to look at a deal of some sort, we're still quite a ways apart, and it may come down to the final days," O'Toole said in an interview on CBC's Power & Politics .

"It may be only in the last hours when you start to see the real final position the Americans have. Right now, what [the U.S. is] offering is not sufficient…. We shouldn't make any agreement unless it respects all our workers and comes up with a deal that we can both live with."

Lana Payne, Unifor national president and another advisory committee member, stressed that Canada "can't afford to give any more concessions."

"If in the end, we can't get a deal that is acceptable for Canada, we have to look at these other options. And that means retaliating against the U.S. because we cannot sustain any more of these tariffs, and we have to draw a line in the sand," Payne told Power & Politics .

"My encouragement always to these negotiators is, you know, hold your nerve. Hold the line."

The federal government has told the provinces to be ready as soon as possible to put American alcohol back on the shelves in case a tariff deal is reached, sources said.