President-elect Donald Trump's threatened tariffs could prompt Canada to pursue dollar-to-dollar retaliation or an export tax on oil and gas bound for the U.S.

President Donald Trump said that he plans to enact across-the-board tariffs of as much as 25 per cent on Canada and Mexico by Feb. 1, reiterating his contention that the U.S.’s two immediate neighbours are allowing the flow of migrants and drugs into the country.

Canada’s outgoing prime minister and the leader of the country’s oil rich province of Alberta are confident Canada can avoid the 25% tariffs President Donald Trump says he will impose on Canada and Mexico on Feb.

Federal government sources have said if Trump sets the tariffs at 25%, Canada’s response would be to impose counter-tariffs worth roughly $37 billion, and possibly follow up with another $110 billion in tariffs. If the duties are lower, Canada’s tariff response would be more modest.

Ontario premier Doug Ford has triggered an early election in the province, saying he needs a strong mandate to take on the tariff threat.