Navigating Economic Uncertainty in Canada

Canada's economic outlook for 2025 is characterized by significant uncertainty influenced by global events such as geopolitical conflicts and shifting U.S. trade policies. The economy is expected to experience a challenging first half due to high interest rates and rising unemployment, yet a potential easing of rates in the latter half could bring relief. Notably, Canada may experience a divergence from U.S. economic trends, marking a permanent shift in economic models influenced by fiscal policies and inflationary pressures. Economists will need to unpack a complex narrative in which Canada's structural challenges, such as low fertility rates and productivity issues, persist even as surface-level data paints a more resilient picture.