Deloitte Canada has revised down its growth projection for Canada’s economy in 2027 by 20 percent due to challenging conditions faced by consumers and businesses. This adjustment comes in light of a recent American ban on specific Canadian imports.
The trade tensions between Canada and the U.S. have led Deloitte to predict a significant economic slowdown in the last quarter of this year and early 2027. Chief economist Dawn Desjardins highlighted the uneven impact of U.S. tariffs and Canada’s countermeasures on different sectors of the Canadian economy. While some sectors will face challenges, others are expected to see growth and job opportunities.
Deloitte’s latest economic forecast anticipates a 1.6 percent GDP growth for Canada in 2027, down from the previously projected 2 percent. The firm also revised its estimate for 2026, forecasting a 0.9 percent growth, slightly better than the earlier prediction of 0.7 percent.
The ongoing economic uncertainties are affecting both consumers and businesses, leading to a cautious approach towards spending and a slower pace of growth. Statistics Canada reported that the GDP growth for July was stagnant compared to the previous month, with the goods-producing and services-producing industries showing mixed performances.
Andrew Grantham from CIBC noted that the flat growth in July was expected as the economy cooled down from a strong second quarter. With the impact of the latest tariffs yet to be fully realized, economists are closely monitoring upcoming data releases, including the September jobs report and October’s inflation figures, to gauge the economic trajectory.
The Bank of Canada is keeping a watchful eye on the evolving situation, with policymakers emphasizing the need for a broader economic recovery. There is a consensus among economists that the Bank will maintain interest rates until the end of 2026, with a potential gradual increase in 2027, although recent communications suggest a possibility of earlier rate hikes.
The economic landscape remains uncertain, with various factors influencing the growth prospects of the Canadian economy in the coming months.