The Conference Board of Canada released some projections for the Canadian economy over this year and next. Canada’s economy is expected to post lacklustre growth this year amid trade tensions and the possibility of slower global economic activity. The organization expects to see some improvement in Canada’s labour market over the next couple of years, but the labour market could be hurt this year due to slower trade with Canada’s largest trade partner.

• The Conference Board expects Canada’s economy to expand by 1.5% in 2025. The research organization believes trade tensions will weigh on consumer and business confidence, which could drag down economic activity. Canada’s economy is unlikely to fall into a recession but could see a contraction in the second quarter.
• Trade tensions are having a significant impact on Canada’s economic activity. The Conference Board says that some businesses have been able to increase exports to other countries, but not enough to offset the loss in shipments to the US.
• The Conference Board also identified the housing market as an area of weakness for Canada’s economy this year. Demand has been soft because of economic and employment concerns. The Conference Board doesn’t expect real estate activity to rebound until next year.
• The Canadian think tank believes the labour market has been more resilient than expected this year. The Conference Board expects the labour market to improve if trade tensions subside. Wage growth should expand in the coming years, with population growth expected to slow.

Canada’s economy expanded in the first quarter of 2025 but has slowed in recent months as trade disruptions take hold and weigh on the performance of several key sectors. Canada continues to engage with the US to reach a trade agreement by July 21. Canada wasn’t included in Monday’s list of higher tariffs. Hopes are that a trade deal will boost confidence and lift economic conditions in Canada.

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