Canadian economy headed for recession this year, according to Deloitte outlook

 

Deloitte’s outlook has growth coming in at –1.1 per cent in the second quarter and –0.9 per cent in the third quarter. A recession is defined as two back-to-back quarters of negative GDP growth.

Desjardins added that there is a level of uncertainty in their forecasts, given the current trade environment, but said Canadians should be prepared for “really soft economic activity over the next six to eight months.”

Business investment is expected to fall by 11.5 per cent in the second quarter and by 3.5 per cent in the third quarter, due to uncertainty brought on by the trade war. This is supported by recent surveys by the Bank of Canada, which show 22 per cent of firms plan to back off on their investment plans.

Desjardins said the unemployment rate will hit above seven per cent this year and they are expecting a loss of 75,000 jobs over the next couple of quarters, with employment in export sensitive industries such as manufacturing, steel and aluminum the most at risk. Desjardins said there could be some job losses in other parts of the economy, such as the services sector, as well.

The outlook has economic activity rebounding at the end of 2025, with GDP growth projected to hit 2.4 per cent in the final quarter of this year. Still, Deloitte leaves room for significant downside risks in its forecasts.

https://financialpost.com/news/economy/canadian-economy-headed-recession-2025-deloitte