Deloitte Canada has reduced its growth projection for Canada’s economy by 20 percent in 2027, attributing this adjustment to challenging conditions faced by consumers and businesses. The accounting firm’s most recent forecast coincides with a new American ban on specific Canadian imports, which went into effect on Tuesday.
Deloitte anticipates that the repercussions of the recent escalation in the Canada-U.S. trade conflict will lead to a significant economic slowdown towards the end of this year and into early 2027. Chief economist Dawn Desjardins highlights that the impact of billions of dollars in U.S. tariffs, along with Canada’s retaliatory actions, will vary across different sectors of the Canadian economy. While some industries may struggle, others are expected to experience growth and job creation.
Deloitte’s latest economic outlook predicts a 1.6 percent GDP growth for Canada in 2027, down from the initial estimate of a two percent growth rate. The firm also revised its forecast for 2026, now projecting a 0.9 percent growth, a slight improvement from the earlier estimate of 0.7 percent.
The ongoing economic uncertainty, according to Desjardins, is influencing consumer behavior and business decisions. Canadians are becoming more cautious with their spending, leading to increased savings and a slower pace of economic growth.
In a separate development on Tuesday, Statistics Canada reported that the country’s GDP growth for July remained stagnant compared to the previous month after three consecutive months of expansion. The agency noted that while certain sectors such as construction and utilities saw gains, declines in retail and wholesale trade offset these increases.
Looking ahead, economists like Andrew Grantham from CIBC anticipate the impact of the latest tariffs on the Canadian economy. The focus now shifts to upcoming economic indicators, including the September jobs report and inflation data, as policymakers at the Bank of Canada evaluate the need for any adjustments to interest rates. Governor Tiff Macklem of the Bank of Canada previously described the Canada-U.S. tariffs as significant but limited in scope, emphasizing the importance of a broad-based economic recovery.