>The country’s gross domestic product will grow 1.1 per cent in 2025 and 1.6 per cent next year, gaining momentum from falling borrowing costs, infrastructure spending and rising business investment, according to projections from Deloitte’s fall economic outlook. But without those exemptions for key exports – a premise the accounting firm itself calls “ambitious” – GDP could instead fall 2.5 per cent below Deloitte’s 2030 baseline projection, the level of output expected if all assumptions hold.
>That risk, combined with a weak labour market and subdued housing, makes the recovery uncertain, even if unemployment – now at 7.1 per cent – is unlikely to climb much higher, Deloitte said in its report published Monday.
>“It’s not a huge growth story,” Dawn Desjardins, Deloitte’s chief economist, said in an interview ahead of the report’s release. “But we’d anticipate navigating through this period and laying the groundwork for stronger growth ahead.”
>The forecast hinges on Canadian officials’ ability to preserve exemptions on key exports in a tense standoff with the Trump administration – a test made sharper now that Ottawa and Washington are entering the review process of the United States-Mexico-Canada Agreement on free trade. Deloitte leaves political outcomes out of its forecast, Ms. Desjardins said, focusing instead on factors it expects to evolve – such as lower interest rates and steadier household financing. “If you put in things you don’t necessarily have a line of sight on, your forecast gets whipped around.”
>Deloitte’s forecast also models out the hit if carve-outs were lost. “It’s damaging to both sides of the border,” Ms. Desjardins said. “Our view is that this will be maintained. But it’s uncertain, and the impact if we lose them is not pleasant.” The USMCA review will cover more than tariffs, opening the door to changes in rules of origin, labour and digital trade that shape Canada’s access to its largest market at a time when growth depends heavily on it.
>Pent-up housing demand and lower borrowing costs could act as stabilizers. Manufacturers, meanwhile, have been cushioned by Canada’s relatively low average tariffs compared with peers. But interprovincial trade barriers and limited export capacity mean Canadian companies can’t always move goods to market quickly or cheaply, while complex approval processes make it costly and slow for businesses to put new capital to work, Ms. Desjardins said.
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[https://www.proquest.com/canadiannews/docview/3255247079/82DC2D4C12DE4188PQ/](https://www.proquest.com/canadiannews/docview/3255247079/82DC2D4C12DE4188PQ/)
>The country’s gross domestic product will grow 1.1 per cent in 2025 and 1.6 per cent next year, gaining momentum from falling borrowing costs, infrastructure spending and rising business investment, according to projections from Deloitte’s fall economic outlook. But without those exemptions for key exports – a premise the accounting firm itself calls “ambitious” – GDP could instead fall 2.5 per cent below Deloitte’s 2030 baseline projection, the level of output expected if all assumptions hold.
>That risk, combined with a weak labour market and subdued housing, makes the recovery uncertain, even if unemployment – now at 7.1 per cent – is unlikely to climb much higher, Deloitte said in its report published Monday.
>“It’s not a huge growth story,” Dawn Desjardins, Deloitte’s chief economist, said in an interview ahead of the report’s release. “But we’d anticipate navigating through this period and laying the groundwork for stronger growth ahead.”
>The forecast hinges on Canadian officials’ ability to preserve exemptions on key exports in a tense standoff with the Trump administration – a test made sharper now that Ottawa and Washington are entering the review process of the United States-Mexico-Canada Agreement on free trade. Deloitte leaves political outcomes out of its forecast, Ms. Desjardins said, focusing instead on factors it expects to evolve – such as lower interest rates and steadier household financing. “If you put in things you don’t necessarily have a line of sight on, your forecast gets whipped around.”
>Deloitte’s forecast also models out the hit if carve-outs were lost. “It’s damaging to both sides of the border,” Ms. Desjardins said. “Our view is that this will be maintained. But it’s uncertain, and the impact if we lose them is not pleasant.” The USMCA review will cover more than tariffs, opening the door to changes in rules of origin, labour and digital trade that shape Canada’s access to its largest market at a time when growth depends heavily on it.
>Pent-up housing demand and lower borrowing costs could act as stabilizers. Manufacturers, meanwhile, have been cushioned by Canada’s relatively low average tariffs compared with peers. But interprovincial trade barriers and limited export capacity mean Canadian companies can’t always move goods to market quickly or cheaply, while complex approval processes make it costly and slow for businesses to put new capital to work, Ms. Desjardins said.
Further reading:
[It’s complicated – The conditions required for Canada’s economic comeback](https://www.deloitte.com/content/dam/assets-zone3/ca/en/docs/services/consulting/2025/economic-outlook-fall-2025-aoda-en.pdf) – Deloitte
[‘Buy Canadian’ includes steel for Parliament Hill renos, documents show – The Globe and Mail](https://www.theglobeandmail.com/politics/article-buy-canadian-centre-block-renovations-parliament-steel-tariffs/)
[Algoma Steel secures $500-million in government loans to help fight trade war – The Globe and Mail](https://www.theglobeandmail.com/business/article-algoma-steel-government-loans-trade-steel-tariffs/)
[As unemployment climbs, the promise of a grocery store job lures hundreds | CBC News](https://www.cbc.ca/news/canada/ottawa/as-unemployment-climbs-the-promise-of-a-grocery-store-job-lures-hundreds-1.7644463)
Other news:
[Coming byelections in at least three safe Liberal ridings will mark first test of Carney government’s popularity, say political players – The Hill Times](https://www.hilltimes.com/story/2025/09/28/coming-byelections-in-at-least-three-safe-liberal-ridings-will-mark-first-test-of-carney-governments-popularity-say-political-players/475002/)
[With confidence votes coming, it’s important to keep political strategist Pitfield in the PMO, say some top Liberals – The Hill Times](https://www.hilltimes.com/story/2025/09/29/with-coming-confidence-votes-important-to-keep-top-political-strategist-pitfield-in-the-pmo-say-some-top-liberals/474899/)
[Alberta health officials were also directors at a company linked to a supplier – The Globe and Mail](https://www.theglobeandmail.com/canada/article-alberta-health-services-supplier-procurement-mhcare/)
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