Despite stronger-than-expected economic growth this year, Canada’s trade dispute with the United States and elevated energy prices are expected to significantly hamper growth in the year ahead, according to a recent report from Deloitte Canada.
The professional services firm raised its fall 2026 forecast for Canadian economic growth from 0.7 percent to 0.9 percent following stronger-than-expected economic performance in the second quarter.
However, it lowered its 2027 growth projection from 2 percent to 1.6 percent, citing the impact of U.S. tariffs and Canadian counter-tariffs, along with higher energy costs.
“The effects of the recent flare-up in trade tensions are expected to become more pronounced in 2027 with growth forecast to slow sharply in the final quarter of this year and into early 2027 as the economy adjusts to the initial Section 338 tariffs and the Canadian government’s retaliation,” Deloitte Canada chief economist Dawn Desjardins wrote in the Sept. 29 analysis….