Deloitte sees the fallout of recent escalations in the Canada-U.S. trade war causing a sharp economic slowdown in the final quarter of this year and into early 2027.
Chief economist Dawn Desjardins says the weight of billions of dollars in U.S. tariffs and Canada’s reciprocal measures will not fall evenly across the Canadian economy, hitting some sectors hard, while others prosper. At the same time, the federal government’s fiscal supports, investment initiatives and defence spending are positive signals for targeted growth, she said.