Canada’s economy avoided a recession in 2025 despite widespread concerns triggered by renewed trade tensions with the United States, but growth remained largely stagnant, according to economist, author and speaker Todd Hirsch.
Hirsch said the Canadian economy proved more resilient than many forecasters expected following the escalation of U.S. tariff threats last year. While he had anticipated a recession, the downturn did not materialize. Instead, Canada experienced a year of minimal economic growth, which he characterized as a modest but important achievement under challenging conditions.
Todd Hirsch
Looking ahead to 2026, Hirsch said economic forecasts remain highly uncertain. Current projections from the Bank of Canada and major financial institutions suggest real GDP growth of roughly 1.2 to 1.5 per cent, but he cautioned that global and political developments could quickly alter that outlook. He pointed to the upcoming renegotiation of the Canada-U.S.-Mexico Agreement as a key risk, noting that trade frictions and the persistence of tariffs could weigh on economic performance.
Hirsch described Canada’s labour market as soft but stable, with unemployment sitting well above ideal levels but far below recessionary peaks. He said job conditions vary significantly by region, particularly in areas affected by steel, aluminum and automotive tariffs. Youth unemployment remains a particular concern, as limited access to entry-level work could have long-term consequences for younger workers.
Inflation has moderated to near the Bank of Canada’s target range, Hirsch noted, but elevated price levels continue to strain household budgets, especially for essentials such as food, transportation and rent.
He added that geopolitical developments, including shifting U.S. foreign policy, could have significant economic implications for Canada, while consumer spending has so far remained more resilient than expected despite ongoing cost pressures.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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Canada’s Entrepreneur is the number one community media platform in Canada for entrepreneurs and business owners. Established in 2016, our podcast team has interviewed over 800 Canadian entrepreneurs from coast-to-coast. With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 250,000 + audio downloads, 50,000 + average monthly social impressions, 15,000 + engaged social followers and 120,000 newsletter subscribers. Canada’s Entrepreneur is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
About Us
Canada’s Entrepreneur is the number one community media platform in Canada for entrepreneurs and business owners. Established in 2016, our podcast team has interviewed over 800 Canadian entrepreneurs from coast-to-coast. With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 250,000 + audio downloads, 50,000 + average monthly social impressions, 15,000 + engaged social followers and 120,000 newsletter subscribers. Canada’s Entrepreneur is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story
