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.
Big gap remains
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."
WATCH | O'Toole on Canada-U.S. trade talks: 'Our success can be their success': Erin O'Toole August 14| Duration 9:58
"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.
She described the state of the talks as "tough right now."
"My encouragement always to these negotiators is, you know, hold your nerve. Hold the line."
U.S. wants booze back on shelves
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.
In addition, the federal government has also asked provinces and territories to be prepared to drop retaliatory procurement rules that favour Canadian suppliers in case a deal is made, the sources said.
Trump cited complaints about provincial booze bans, dairy import quotas and the auto tariffs in threatening the new tariffs.
According to the sources, the current deal under discussion would see the U.S. refrain from imposing those new levies, while also lowering — but not fully eliminating — sectoral tariffs already in place on Canadian steel, aluminum, autos and forest products.
In exchange, Canada would have to make concessions on the three areas of complaints cited in Trump's latest threat.
Quebec Premier Christine Fréchette maintained Friday that no concessions should be made regarding the supply management system that protects Canadian dairy, a key U.S. trade irritant. Trump has repeatedly complained about the level of U.S. dairy farmers' access to Canada's market.
“There is a great deal at stake in the current negotiations; that is undeniable,” the premier said. “For us, it is essential to preserve supply management; we have made this a red line that must not be crossed.”
WATCH | Canadian 'retaliatory measures' forced new tariffs: U.S. trade representative: New tariffs set for next week are 'in response to Canadian retaliatory measures': USTR August 14| Duration 1:52
Talks called 'constructive'
CBC News reported last week that ending the booze bans was something Canada was prepared to offer in exchange for tariff relief.
In addition to the 50 per cent levy slated to come into force next Wednesday, Trump has maintained sectoral tariffs on specific industries since last year.
Prime Minister Mark Carney has previously said he's aiming to strike a deal that would address those levies in addition to the latest threat.
LeBlanc has met with U.S. Trade Representative Jamieson Greer multiple times in recent weeks. Greer said Thursday they are aiming to have "options" available for both Carney and Trump following the latest talks. LeBlanc is expected to stay in Washington over the weekend as talks continue.
On Friday, Greer told reporters in Iowa that talks with Canada had been "constructive" but that Washington was pushing to have retaliatory measures like the booze bans be pulled.
"My sense is the Canadians, they want to have a more conciliatory approach. But we'll see," Greer said.
"At the end of the day, we're going to do what's best for America. If there's a way to bring Canada along with that, we're happy to do that. But we're mostly focused, first and foremost, on making sure President Trump's trade policy is executed."
Industry sources previously told CBC News that Canadian negotiators have aggressively made it clear they see the Aug. 19 date as a cliff-type moment, meaning there would be no political appetite among Canadians to keep talks going if the 50 per cent tariffs come into force.
WATCH | Ford says 'fair deal' needed to return U.S. booze to Ontario shelves: 'Fair deal' required for U.S. alcohol to return to Ontario shelves, Ford says August 13| Duration 2:30
U.S. wine sales have plummeted
The booze bans were part of Canada's initial response to Trump threatening tariffs when he returned to the White House last year. They've been a sticking point for the Americans ever since.
The bans sent U.S. exports of wine, beer and spirits to Canada off a cliff. U.S. spirit-makers have said they've been "devastating" to their bottom line, while American wine sales in Canada plummeted $343 million US in 2025.
On Thursday, Ontario Premier Doug Ford — a frequent critic of Trump — said he'd be "more than happy" to bring U.S. booze back onto his province's shelves if a fair deal is reached that protects Ontario's steel, auto, forestry, agriculture and manufacturing sectors.
Ford also said his message to Americans is that "a tariff on Canada is a tax on the American people."
"Remember, when it comes to the [U.S.] midterms, you have to get that bully and send him a message," Ford said.
Even if American alcohol does become available again, a number of Canadians previously told CBC News that they've no intention of buying any.
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