Overview

• The report finds that accelerating defence spending will boost real GDP by just 0.1 percentage point in both 2025 and 2026.
• Oxford Economics projects a 0.8 per cent cumulative decline in real GDP through year-end, defining a trade war–induced recession.
• It forecasts 140,000 job losses that will push Canada’s unemployment rate up from 6.9 per cent in June to 7.6 per cent later this year.
• Higher defence outlays are expected to increase federal deficits and raise the debt-to-GDP ratio unless matched by spending cuts.
• Inflation is predicted to climb to 3 per cent by mid-2026, effectively handcuffing any further monetary easing by the central bank.