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4w ago

Ontario Faces Modest Recession in 2025 Due to U.S. Tariffs, Warns Provincial Watchdog

Financial Accountability Office projects slowed GDP growth, significant job losses, and rising consumer prices as U.S.-Canada trade tensions escalate.

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Trucks enter into the United States from Ontario, Canada across the Ambassador Bridge, Monday, Feb. 3, 2025, in Detroit.
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Overview

  • Ontario's GDP growth is expected to drop to 0.6% in 2025, down from a projected 1.7% without tariffs, as U.S. levies on steel, aluminum, and auto parts take effect.
  • The province could lose 68,100 jobs in 2025, with job losses rising to 137,900 by 2029, particularly impacting manufacturing and supply chain industries.
  • Regions like Windsor, Guelph, and Brantford are forecast to experience the steepest employment declines due to their reliance on export-driven industries.
  • Consumer prices are projected to rise modestly, with inflation increasing by 0.2 percentage points in 2025 and 0.3 points in 2026 under the tariff scenario.
  • Premier Doug Ford has publicly disputed the recession forecast, expressing optimism about Ontario's economic resilience despite the FAO's warnings.