Canada's Economy in Jeopardy as US Tariffs Threaten to Cut Growth

Bank of Canada Governor Tiff Macklem warned that new US tariffs could slash Canada's fourth-quarter growth to below 1%, citing a fresh wave of uncertainty. This uncertainty threatens to hit investment and hiring decisions, according to Macklem.

The Middle East conflict has sent oil prices soaring, with crude oil prices near $100 a barrel. As a result, Canada's annual inflation rate could edge up from its current 3% level, which is already above the Bank of Canada's 2% target.

The bank had previously forecasted a third-quarter growth rate of 1.5%, and recent indicators suggest it will likely be around that range. However, Macklem cautioned that if new tariffs remain in place, growth could be roughly halved in the fourth quarter, to below 1%.