Tariffs Could Cut Canada's Growth Rate in Half, Warns Bank of Canada Governor

Bank of Canada Governor Tiff Macklem warned that the latest U.S. tariffs could halve Canada's fourth-quarter growth to below 1 percent, citing the nearly $28 billion worth of Canadian goods affected.

Macklem made this statement in a speech to the Halifax Partnership on Monday, where he also noted that businesses have shown resilience after adapting to the trade war, but this latest escalation could push them back to reassessing their investment and hiring decisions.

The governor emphasized that the global backdrop is marked by structural change, geopolitical fragmentation, and supply disruptions, which are becoming routine. He pointed out that many companies had adapted to the Section 232 levies and Canadian retaliatory measures in place since the trade war began in 2025.

According to Statistics Canada data, 542 fewer enterprises exported to the U.S. in 2025, a 1.3 percent drop and the largest decline in U.S.-bound exporters since 2020. Nearly 51,800 manufacturing jobs were lost over 12 months, and a Canadian Manufacturers and Exporters survey found 44 percent of manufacturers had cancelled investments and 39 percent had frozen hiring or laid off staff.