Canada's Economy Faces Severe Impact If US Exits CUSMA

A new report by Deloitte Canada examines the potential economic impact of the US withdrawing from the North American trade pact, CUSMA. The worst-case scenario projects a decline in Canada's real GDP of 1.6% or $402 billion over the next decade if CUSMA is dissolved.

The report also outlines a best-case scenario where Canada maintains existing free-trade agreements while forging new ones. In this case, the country's real GDP would grow by 0.6% or $141 billion in the next decade.

Manufacturing and oil and gas sectors are expected to bear the brunt of the impact if CUSMA is dissolved, with motor vehicles and parts projected to see a 28% plunge in real GDP compared to the baseline.