Scotiabank Trims 2027 Canadian Growth Forecast Amid US-Canada Trade Turmoil

Canada's economy is expected to slow down in 2027 due to trade turmoil between Canada and the US, Scotiabank Economics predicts. The collapse of Canada-US trade negotiations has left the Bank of Canada navigating one of its most difficult policy crossroads in years.

The new US tariffs have pushed Canada's effective tariff rate on total goods exports to 6.5%, and to 8.6% on exports destined solely for the United States, while the composite goods-and-services rate rose to 4.6%. Scotiabank has trimmed its 2027 GDP forecast to 2.0%

The central bank's next move is unclear, as Governor Macklem repeatedly emphasized at earlier stages of the trade wars started by the US that retaliation would complicate their options.