Canada’s unemployment will go past 7% this year — but no recession: OECD
Global News
A new report from the OECD projects Canada's economy will lag behind other developed nations due mainly to the trade war, but narrowly avoid a recession.
The Canadian economy may narrowly avoid a recession this year, but the outlook for growth and the job market is still expected to take a hit from the trade war, according to the latest report from the Organization for Economic Co-operation and Development.
In its Canada economic survey, the OECD outlines key areas that are already slowing or forecast to decline this year, including per capita GDP, housing affordability, adapting to climate change and business sector productivity.
The organization cites the U.S. trade war and tariff impacts as one of the main headwinds for Canada’s economy, and provides recommendations for the best ways to counteract those challenges.
The report says the trade war is expected to weigh on Canada’s overall GDP — a measure of the total value of all goods and services produced within Canada on a monthly and quarterly, or three-month, basis.
The OECD adds in its study that boosting business development within the country can help offset some of the negative impacts.
On the labour front, the OECD forecasts that unemployment will rise this year to 7.1 per cent, and in 2026 to 7.3 per cent as the trade war and tariffs are expected to continue leading to more job losses in Canada.
The most recent employment report from Statistics Canada showed unemployment increased in April to 6.9 per cent compared with 2024, and that’s up from 6.7 per cent in the March report.
The OECD says Canada will see economic growth in 2025 of one per cent, with a contraction, or negative growth, in the second quarter and flat, or zero per cent, growth for the third and fourth quarters.
The agency says more than 22,000 people have been removed from the country in the last 12 months, and nearly 30,000 removals were "in progress" as of Oct. 31.
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