Deloitte Cuts Canada's 2027 GDP Forecast Amid Trade Tensions and Stalled Growth
Deloitte Canada has lowered its 2027 GDP growth forecast to 1.6%, citing escalating trade tensions with the U.S. This adjustment follows new import bans on Canadian goods and data showing economic growth stalled in July.
Deloitte Canada has reduced its gross domestic product (GDP) growth forecast for 2027 by 20%, now predicting a 1.6% expansion compared to the previous estimate of 2% made in late June. The firm cited the impact of escalating trade tensions and tariffs between Canada and the United States as the primary driver for this downward revision.
The adjustment comes after the Trump administration halted American imports of specific Canadian products, including alcohol, motorcycles, molasses, and whey products, effective Tuesday. Earlier in the month, the White House had also added more Canadian goods to the list subject to 50% tariffs prior to these import bans.
Concurrently, Statistics Canada reported that economic growth was essentially flat in July, following three consecutive months of expansion. Increases in construction and utilities were offset by declines in other sectors. However, the agency’s flash estimate for August predicts that GDP will resume growth at 0.2%.
Deloitte’s current outlook sees Canada’s economy growing by 0.9% in 2026, a slight improvement from its June estimate of 0.7%. Economists note that uncertainty is causing consumers to save more and spend less. Dawn Desjardins and Andrew Grantham have observed an uneven impact across sectors, with some facing hard hits while others may prosper. A sharp economic slowdown is expected in the final quarter of this year and into early 2027.
The Bank of Canada is scheduled to make its next interest policy rate decision on Oct. 28, as it prepares for upcoming data releases.