Cracks in Ontario's economy were starting to show before Trump's tariffs

With all the noise of back-to-back provincial and federal election campaigns, you'd be forgiven for not hearing the cracking sounds coming from Ontario's fragile economy since January, even before U.S. President Donald Trump's tariffs began to bite. 

It all paints a picture of an economy that was already rather feeble, just as Trump's tariffs appear poised to kneecap Ontario's export-oriented industries. 

Daniel Tisch, president and CEO of the Ontario Chamber of Commerce, says roughly two-thirds of its business members expect to be affected negatively by U.S. tariffs. 

"There's a lot of anxiety, there's a lot of concern," Tisch said in an interview. "You see them [businesses] deferring decisions to expand, to invest and to hire people, none of which are good things."

The Chamber highlighted this vulnerability in February in its 2025 economic report, with the image of a "FRAGILE" sticker slapped on its cover saying, "Ontario Economy: Handle With Care." 

"As we ended 2024, there were some encouraging signs, in that consumer confidence was rising, as was consumer spending, we saw interest rates and inflation coming down," said Tisch. 

"We were beginning to see a turnaround, but it's like a candle has been snuffed out," he added.  

Back in the fall, the 2025 economic growth forecasts for Ontario averaged 1.8 per cent.

The big banks have now slashed those forecasts, with TD predicting real GDP growth of one per cent, RBC forecasting 1.2 per cent and Scotiabank expecting 1.3 per cent growth. 

Meanwhile, the province's independent Financial Accountability Office predicted last week that U.S. tariffs and Canada's retaliation could result in some 119,000 fewer jobs in Ontario by next year, pushing unemployment upward by another 1.1 percentage points.   

While Premier Doug Ford has been vocal about the future threats that tariffs pose to jobs and the economy in this province, he's been far quieter about the tepid growth and rising unemployment figures that predate Trump's re-election. 

At a news conference last week, CBC News asked Ford to explain why Ontario's unemployment rate is so high. 

"The tariffs are a major, major factor," Ford responded, ignoring the fact that unemployment has risen steadily for the past two years. 

"But let's talk about since we've been elected," Ford continued. "There's over one million more people working today than there was seven years ago because we've created the climate and conditions for companies to come here and invest."