The outlook hinges on the outcome of CUSMA negotiations, with the Trump administration’s latest 50% tariff announcement underscoring the risks. For now, we still think an agreement will be reached at some point in the next year to keep US-Canada trade policy broadly unchanged from its current state, with the Bank of Canada choosing to keep rates on hold during this time. Greater trade certainty, combined with the government’s infrastructure drive, should see GDP growth accelerate to 1.8% in 2027 and 2.0% in 2028.
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