Canada’s economy could rebound in 2026 — but there’s a catch: report
Global News
Canada is projected to record a GDP growth rate of 1.3 per cent in 2025 and tick higher, to 1.7 per cent, in 2026, Deloitte’s fall 2025 economic outlook said.
Canada’s economy is headed towards a rebound in 2026, a report by Deloitte said on Monday, but there’s one catch — the country must maintain a key exemption from U.S. President Donald Trump’s tariffs.
Canada is projected to record a GDP growth rate of 1.3 per cent in 2025 and tick higher, to 1.7 per cent, in 2026, Deloitte’s fall 2025 economic outlook said.
“The big highlight really is that we no longer expect to see the economy slip into recession. That’s not to say we’re not going through a period of very slow growth. We still think the economy will struggle in the latter part of 2025,” said Dawn Desjardins, chief economist at Deloitte Canada.
However, Desjardins said there’s one key caveat.
Currently, the vast majority of Canada’s exports to the United States are exempt from Trump’s tariffs as long as they comply with the Canada-U.S.-Mexico trade agreement (CUSMA).
Economists believe those exemptions have buffered Canada against the worst impacts of the trade war.
“A lot of things have to come together, of course. And one of those is that we maintain the carve-outs we have for our exports to go south of the border tariff-free as long as they comply with the CUSMA agreement. So that’s a pretty broad and big assumption,” she said.
The report said the CUSMA exemptions have meant 95 per cent of Canada’s exports to the U.S. face either zero or very low tariffs.
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