The Canadian economy faces heightened uncertainty as U.S. tariffs on Canada officially take effect. While strong consumer spending and a resilient export sector were expected to drive growth, these tariffs introduce significant risks to key industries.

Housing Market & Tariff Pressures

At the end of January, the newly inaugurated U.S. president threatened 25% tariffs on Canadian goods—and now, that threat has become reality.

Interest Rates & Mortgage Renewals

The Bank of Canada will have to navigate these new economic pressures carefully. If the trade war intensifies, the BoC may cut rates further to cushion the impact. This could bring mortgage rates lower, especially for variable-rate loans.

Mortgage Renewals Impact

1.2 million mortgages will renew this year, mostly at higher rates.
30% of homeowners plan to switch to a variable rate, up from 24%.
81% of those facing higher payments say it will strain their finances.

Housing & Immigration Trends

Rents have dropped sharply, and slower immigration—particularly among non-permanent residents—is easing housing shortages in major cities.

Trade & Economic Risks

Canada exports 75% of its goods to the U.S., making tariffs a direct threat to economic growth. With unemployment at 6.6%, job losses could mount if trade tensions escalate. However, Canada remains a crucial partner for U.S. businesses, which could limit the worst-case scenario.

What’s Next?

With inflation under control at ~2% and the government pushing for housing affordability measures, interest rates are still expected to decline. A potential housing market recovery could emerge later this year—but the extent of damage from these new tariffs remains to be seen.