Overview

• Deloitte forecasts Canada will enter a modest recession in the second and third quarters of 2025 with real GDP growth of just 1.1% for the year.
• Business and consumer confidence has plunged to its lowest level outside the pandemic as firms delay investment in the face of trade policy uncertainty.
• Exports to the United States have fallen sharply, particularly for steel, aluminum and finished autos subject to steep tariffs.
• Energy-exporting provinces such as Alberta, Saskatchewan and Newfoundland and Labrador are expected to drive growth while Ontario, British Columbia and Quebec lag.
• Ottawa's ‘One Canadian Economy’ legislation and two additional quarter-point interest rate cuts by the Bank of Canada aim to bolster investment and cushion the slowdown.