Canada's Economy Finds New Growth Spur Beyond US Trade

Canada's economy is showing resilience in the face of US-Canada trade tensions. According to Macquarie, an Australian investment banking firm, Canada can continue growing even if tariffs weigh on trade with its largest customer.

The bank's economists, David Doyle and Chinara Azizova, point out that over the past 18 months, exports to countries beyond the US have grown faster despite increased costs from cross-border business due to tariffs and counter-tariffs.

At home, provincial leaders are taking steps to reduce interprovincial trade barriers, which could boost real GDP per worker by nearly 7%, according to estimates from the International Monetary Fund.

Macquarie also highlights Canada's 'buffer' story: its AAA credit rating, relatively low government debt, and small federal deficit compared to the size of the economy. This credibility matters for a newer growth lane highlighted by the bank - data centers, where projects are expensive upfront and paid back over years.

Alberta represents 92% of planned capacity in this sector, and a jump in imports of computers and peripherals suggests that the buildout may already be starting to show up in the data.