Deloitte Canada has reduced its growth projection for Canada’s economy in 2027 by 20%, attributing it to challenging conditions faced by consumers and businesses. This adjustment coincides with a recent American ban on specific Canadian imports.
The trade tensions between Canada and the U.S. are expected to lead to a significant economic slowdown towards the end of this year and into early 2027, according to Deloitte’s chief economist, Dawn Desjardins. While billions of dollars in U.S. tariffs and Canada’s retaliatory measures will impact different sectors unevenly, Desjardins highlighted that certain industries may experience growth and job creation.
Deloitte’s latest economic forecast predicts a 1.6% GDP growth for Canada in 2027, down from the initial estimate of 2% made in late June. The firm also revised its 2026 GDP growth projection from 0.7% to 0.9%.
Desjardins emphasized the current economic uncertainty affecting both consumers and businesses, leading to increased caution in spending and a slower pace of growth. This sentiment aligns with Statistics Canada’s report stating that GDP growth in July remained flat following three consecutive months of expansion.
Looking ahead, economists are monitoring the impact of escalating trade tensions on the economy. The Bank of Canada is closely watching upcoming data releases, including the September jobs report and inflation figures, as they evaluate the possibility of adjusting interest rates in the future.
The ongoing trade disputes and their implications on the Canadian economy remain a focal point for policymakers and economists, with expectations of a cautious approach towards interest rate decisions in the coming months.