Canada's Tariff Pain Far from Over: Economists Warn of Looming Headwinds

Canadian economists are warning that the worst of the tariff pain is yet to come for the country's economy. According to experts, the recent flat GDP reading in July may be less significant than the headwinds that will hit Canada in the months ahead.

David-Alexandre Brassard, chief economist at CPA Canada, stated that 'economic activity typically takes longer than the labour market to react to tariffs, so we shouldn't assume the worst is over.'

The economists agree that while growth may have returned in August and Q3 GDP is tracking approximately 2% annualised, there are still significant risks to growth in the months ahead.

Andrew Grantham, senior economist at CIBC, characterised the July data as 'old news' given that it predates the fresh wave of US tariffs that came into force in late August. He argued that upcoming employment and consumer price index (CPI) data will carry far more weight for the Bank of Canada's October 28 decision.