Canada's Economy Stalls Amid Tariff Pressure

Canada's economy has ground to a halt in July 2025, with gross domestic product (GDP) growth of 0%. This is a sharp pullback from the 3.3% annualized pace recorded in the second quarter.

The flat result arrived as new American import restrictions took effect and Deloitte Canada issued a downgraded long-term growth outlook, adding to a fraught economic backdrop ahead of the Bank of Canada's October 28 rate decision.

While construction grew 1.3% in July, its fourth consecutive monthly gain, and utilities posted their strongest performance of 2025 with a 1.7% rise, declines were broad and punishing across various sectors, including manufacturing, mining, and retail trade.

Deloitte Canada cut its 2027 GDP growth projection by 20%, from 2% to 1.6%, citing the accumulated weight of US tariffs and Canada's retaliatory measures on consumer and business confidence.