Imagine Canada and the US getting into a trade fight! This means they might add extra taxes (called tariffs) on things they buy and sell to each other. The Bank of Canada's boss, Governor Macklem, is worried about this.
He explained that a tariff war could be really bad for Canada's economy. It could make things more expensive and cause fewer jobs.
Here's what could happen:
- Canada's economy could shrink by almost 3% in two years.
- Canadian exports (things Canada sells) could drop by 8.5%.
- People might buy less stuff, and businesses might invest less.
| Impact | Percentage Change |
|---|---|
| Canadian economic output (GDP) | -3% (over 2 years) |
| Canadian exports | -8.5% (after 1 year) |
| Consumer spending | -2% (by mid-2027) |
| Business investment | -12% (by 2026) |
