Deloitte Canada has revised its growth forecast for Canada’s economy in 2027, reducing it by 20% due to challenging conditions for consumers and businesses. The accounting firm’s updated projection coincides with a recent American ban on certain Canadian imports that came into effect on Tuesday.
The escalation in the Canada-U.S. trade war is expected to result in a significant economic slowdown in the last quarter of this year and the beginning of 2027, according to Deloitte. Chief economist Dawn Desjardins highlighted that the impact of billions of dollars in U.S. tariffs and Canada’s retaliatory actions will impact various sectors differently, with some facing challenges while others see growth opportunities. Desjardins also mentioned that the government’s fiscal support, investment plans, and defense spending are positive indicators for targeted growth.
Deloitte’s latest economic forecast predicts a 1.6% GDP growth for Canada in 2027, down from the previous estimate of 2% made in late June. The firm also adjusted its 2026 GDP growth forecast from 0.7% to 0.9%, reflecting a slightly improved outlook.
Desjardins emphasized the uncertainty faced by Canadian businesses, including higher costs, potential trade friction with the U.S., and the prospect of increased interest rates, creating an unpredictable environment. This uncertainty is expected to lead to a slower growth trajectory for the economy.
In other economic news, Statistics Canada reported that Canada’s GDP for July remained stagnant compared to the previous month. The agency noted that while there were increases in construction and utilities, declines in retail and wholesale trade sectors offset these gains in the services-producing industries.
These economic developments underscore the challenges and adjustments needed in the Canadian economy amidst ongoing trade tensions and global uncertainties.
