The Big Story AI, EVs and HBC: Looking back at Canada's biggest business stories of 2025
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Dec 23, 2025 In a captivating discussion, Eric Kam, a professor of economics at Toronto Metropolitan University, analyzes Canada's tumultuous business landscape of 2025. He reflects on the dramatic collapse of Hudson's Bay as a symbol of retail decline. The conversation dives into the auto industry's struggles, including dwindling EV demand and tariff impacts. Kam explains why Canadian banks remain resilient amid market uncertainties and explores the complex dynamics of AI investment versus consumer hesitancy. A thought-provoking look at a pivotal year for Canada!
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Tariff Shock Drove 2025 Uncertainty
- Donald Trump's tariff threats injected pervasive uncertainty into the Canadian economy throughout 2025.
- Eric Kam says this single story froze investment, labour decisions, and business confidence across sectors.
Manufacturing Took The Biggest Hit
- Tariff exposure hit manufacturing hardest, with autos, steel, aluminium and forestry suffering immediate blows.
- Kam notes winners were scarce and manufacturing faced the biggest structural damage.
Rate Cuts Don't Raise Productive Capacity
- Low interest policy kept consumption afloat but didn't raise potential GDP or productive capacity.
- Kam warns rate cuts help short-term jobs and consumption but don't strengthen long-term output.