While the effects of the U.S. tariffs on Canada’s economy depend on how long the trade war lasts—and whether it escalates—comparisons with past recessions can give an idea of how bad things could get for Canadians.
A Scotiabank report indicates that, at 25 percent tariffs, Canada’s GDP could be as much as 5.6 percent lower in the first quarter of 2027 with full retaliation, 4.7 percent lower with half retaliation, and 3.8 percent with no retaliation.
For comparison, during the COVID-19 pandemic, Canada’s GDP saw an annual decline of 5.4 percent in 2020, and during the 2008–2009 recession, the country’s GDP fell by 3.3 percent over three quarters, according to Statistics Canada….