>**Tariffs** on Canadian goods are currently at 12%, expected to drop to 5% by year-end and potentially 2.5% by late 2026 if a new **USMCA** deal is reached.
>Canada’s **real GDP growth forecast** has been revised down to **0.8% in 2025** and just over **1% in 2026**.
>Caranci expects **two more Bank of Canada rate cuts**, but questions their effectiveness due to the nature of tariff-induced supply shocks.
>A formal **recession** is expected mid-year, with potential **job losses of 100,000** and an **unemployment rate** rising to around **7.2%–7.3%**.
>Canada’s **housing market** is especially weak in **Ontario and B.C.**, where **condo prices could drop 15–20% from their peak**, with minimal recovery expected before 2026.
>While **U.S. growth** is also slowing, TD forecasts **2% GDP growth in 2026**, more optimistic than consensus (1.5%), assuming major **tariff deals are reached** by Q3 2025.
>**Stagflation risks** are real but balanced against recession risks.
>**Inflation** may rise due to tariffs, with impacts visible by **summer 2025**.
>**The Canadian dollar** has stabilized despite economic headwinds, reflecting optimism about a future trade deal.
1 Comment
>**Tariffs** on Canadian goods are currently at 12%, expected to drop to 5% by year-end and potentially 2.5% by late 2026 if a new **USMCA** deal is reached.
>Canada’s **real GDP growth forecast** has been revised down to **0.8% in 2025** and just over **1% in 2026**.
>Caranci expects **two more Bank of Canada rate cuts**, but questions their effectiveness due to the nature of tariff-induced supply shocks.
>A formal **recession** is expected mid-year, with potential **job losses of 100,000** and an **unemployment rate** rising to around **7.2%–7.3%**.
>Canada’s **housing market** is especially weak in **Ontario and B.C.**, where **condo prices could drop 15–20% from their peak**, with minimal recovery expected before 2026.
>While **U.S. growth** is also slowing, TD forecasts **2% GDP growth in 2026**, more optimistic than consensus (1.5%), assuming major **tariff deals are reached** by Q3 2025.
>**Stagflation risks** are real but balanced against recession risks.
>**Inflation** may rise due to tariffs, with impacts visible by **summer 2025**.
>**The Canadian dollar** has stabilized despite economic headwinds, reflecting optimism about a future trade deal.
>