Tariff impact grows as companies’ steps to soften blow fades: Deloitte do sex sex to

Apr, 30 2025 12:20 PM

Deloitte’s latest economic outlook sees the pain of tariffs gathering pace in the months ahead as the short-term boost from companies front-loading activity fades. The firm says the uncertainty from trade policies, and the efforts by companies to get orders in before tariffs hit, mean a sharp drop in investment and rising unemployment.Deloitte Canada chief economist Dawn Desjardins says a modest downturn is ahead for Canada, while a loss of free-trade access to the United States would create a more permanent hit, reducing Canadian real GDP by around three per cent by 2030.The firm emphasizes how little clarity there is going forward, making longer-term forecasts difficult, but in the near-term, it sees Canada’s GDP shrinking 1.1 per cent in the second quarter, then a further 0.9 per cent in the third quarter. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy. It says Canada should still have positive growth of 1.2 per cent for 2025 as a whole given the heightened activity early in the year. Story continues below advertisement if ( typeof( gn_monetize ) !== 'undefined' && typeof( gn_monetize.Ads ) !== 'undefined' && gn_monetize.Ads.initialRequestMade() ) { // Ads script has been loaded, create the ad. gn_monetize.Ads.create( {"sizes":"[300,250]","biddable":true,"id":"gpt-ad-300250-10","lazy":false,"targeting":{"pos":10,"slotid":"gpt-ad-300250-10"},"companion":false} ); } else { // if Ads script not yet loaded, queue up ad data for initialization. var gnAdSettings = gnAdSettings || {}; gnAdSettings.ads = gnAdSettings.ads || []; gnAdSettings.ads.push( {"sizes":"[300,250]","biddable":true,"id":"gpt-ad-300250-10","lazy":false,"targeting":{"pos":10,"slotid":"gpt-ad-300250-10"},"companion":false} ); } The early run-up in activity can be seen especially in areas like machinery and equipment investment, where Deloitte forecasts a 30 per cent year-over-year jump in the first quarter, but a 37 per cent drop in the second. 1:31 Carney slams Trump tariffs, unveils $2B plan to shield Canadian auto sector Trending Now Pierre Poilievre loses Carleton riding he’s held for 20 years Meet the man who ousted Pierre Poilievre: ‘Someone had to stand up’ Overall business investment is expected to see an 11.5 per cent drop in the second quarter, as areas like construction also pull back.Lower investments and business caution will also mean job cutbacks.Deloitte sees unemployment peaking at 7.5 per cent in the third quarter before starting to trend back under seven per cent next year.Along with uncertainty over U.S. tariff policies is how Canada’s re-elected Mark-Carney-led Liberal government will respond, though Deloitte says supports are expected to focus on infrastructure spending to prepare for shifting trade patterns. Story continues below advertisement if ( typeof( gn_monetize ) !== 'undefined' && typeof( gn_monetize.Ads ) !== 'undefined' && gn_monetize.Ads.initialRequestMade() ) { // Ads script has been loaded, create the ad. gn_monetize.Ads.create( {"sizes":"[300,250]","biddable":true,"id":"gpt-ad-300250-11","lazy":true,"targeting":{"pos":11,"slotid":"gpt-ad-300250-11"},"companion":false} ); } else { // if Ads script not yet loaded, queue up ad data for initialization. var gnAdSettings = gnAdSettings || {}; gnAdSettings.ads = gnAdSettings.ads || []; gnAdSettings.ads.push( {"sizes":"[300,250]","biddable":true,"id":"gpt-ad-300250-11","lazy":true,"targeting":{"pos":11,"slotid":"gpt-ad-300250-11"},"companion":false} ); } It’s also not clear yet how well the policies will work, but Desjardins says there is the potential that growth could be stronger than expected by focusing on productivity and diversifying trade.“If we can capitalize on this momentum, Canada’s economy may well find itself emerging from this shock stronger and more resilient,” she said. More on Canada More videos Meet the man who ousted Pierre Poilievre: ‘Someone had to stand up’ Pierre Poilievre loses Carleton riding he’s held for 20 years What next for the NDP after party loses leader, seats and official status? Trump congratulates Carney on election win, agrees to future meeting: PMO Canada Election 2025: Carney elected PM, vows to govern ‘for all Canadians’ in close victory Liberals to form minority government

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