Canadians are grappling with a significant dip in economic confidence, a sentiment not felt since the early days of the COVID-19 pandemic. A staggering 65 per cent anticipate an economic downturn over the next six months, with just nine per cent daring to express optimism for growth, according to a recent Nanos Research poll for Bloomberg News. This erosion of confidence is particularly pronounced in export-dependent regions like Ontario and British Columbia, home to vital automotive and natural resource industries.
The ongoing trade tensions, spurred by U.S. President Donald Trump’s tariff threats, are deeply unsettling Canadians. Although the tariffs—ranging from 10 per cent on energy to 25 per cent on steel and cars—have not yet been enforced, the potential for a trade war looms large. Economists have already revised growth forecasts down to 1.6 per cent from a previous 1.8 per cent, illustrating the potential economic fallout.
Tiff Macklem, the Governor of the Bank of Canada, has issued stern warnings about the possible repercussions of a U.S.-Canada tariff conflict, projecting a decline in Canadian output by nearly three per cent over two years. As fears mount, the Bloomberg Nanos Canadian Confidence Index has dipped to 49.3, reflecting a pervasive pessimism that under 50 signals overwhelming negative sentiment among consumers.
Canada maintains a complex trade relationship with the U.S., purchasing more American goods than any other nation. Last year, the trade balance showed a deficit for Canada, with goods sold to Canada amounting to USD 350 billion while Canadian sales to the U.S. reached USD 413 billion. The growing discontent with trade issues and tariffs has left the youth, those under 30, slightly more hopeful than older generations, reflecting a generational divide in economic expectations.
Canadians’ economic outlook has plunged, as 65% expect a downturn amidst U.S. tariff threats, marking the worst sentiment since June 2020. Confidence is particularly low in Ontario and British Columbia, with the Bloomberg Nanos Canadian Confidence Index dropping to 49.3. Tariffs could significantly hurt Canada’s economy, prompting economists to lower growth projections to 1.6%.
In summary, the outlook for Canadians is bleak amid looming trade threats from the U.S., with consumer confidence plunging to levels not seen since 2020. The impacts of potential tariffs are already shaping economic forecasts and affecting key sectors in regions heavily reliant on exports. As confidence remains teetering on the edge of negativity, especially among older citizens, the implications for Canada’s economic health could be profound if tensions do not abate.
Original Source: financialpost.com
