Deloitte Canada has revised its growth projection for the Canadian economy in 2027, reducing it by 20 percent due to challenging conditions faced by consumers and businesses. The update from the accounting firm coincides with a recent American ban on specific Canadian imports.
The escalating trade tensions between Canada and the U.S. are expected to result in a significant economic slowdown towards the end of this year and early next year, according to Deloitte. Chief economist Dawn Desjardins highlighted the uneven impact of billions of dollars in U.S. tariffs and Canada’s retaliatory measures on different sectors of the Canadian economy. She also pointed out that while some industries may struggle, others are poised for growth and job creation.
Deloitte’s latest economic forecast predicts a 1.6 percent GDP growth for Canada in 2027, down from the previously anticipated 2 percent. The firm also revised its 2026 outlook to a 0.9 percent increase, a slight improvement from the earlier estimate of 0.7 percent. Desjardins emphasized the uncertainty faced by Canadian businesses, including higher costs, trade friction with the U.S., and potential interest rate hikes, leading to a slower growth trajectory for the economy.
The trade dispute between Canada and the U.S. escalated with the imposition of bans on certain Canadian products by the Trump administration, including alcohol, motorcycles, molasses, and whey. This move followed previous tariffs on Canadian goods. The ongoing economic uncertainty is affecting both consumers and businesses, leading to cautious spending and slower growth expectations.
In a separate report, Statistics Canada revealed that the GDP growth for July remained stagnant compared to the previous month, following three consecutive months of expansion. The agency attributed this to mixed performances in different sectors. Looking ahead, economists are closely monitoring the impact of the latest tariffs on the economy, with a focus on upcoming data releases, including the September jobs report and October inflation figures, which will influence the Bank of Canada’s interest rate decision later in the month.