Bank of Canada Governor Tiff Macklem said that Trump's actions are a once-in-a-century shock and may plunge Canada into a year-long economic recession. This may mean increased inflation, rising unemployment, supply chain disruptions, and “some exporters” declaring bankruptcy. This makes the central bank's core function — trying to predict economic trends and adjust policies and loan interest rates accordingly — “virtually useless,” he said. Despite this, Macklem proposed two scenarios. The first scenario is that “most of the new tariffs are eliminated through negotiations,” but economic growth will stagnate and then recover “moderately” in a still weak economic environment. “In the second scenario, we assume that the trade conflict continues for a long time, then the economic consequences will be severe... and the Canadian economy will fall into a year-long recession. Economic growth will gradually resume in 2026, but will remain weak in 2027, as US tariffs will permanently reduce Canada's potential output and reduce our standard of living.” Macklem added: These scenarios are just two of many possibilities.

Bank of Canada Governor Tiff Macklem said that Trump's actions are a once-in-a-century shock and may plunge Canada into a year-long economic recession. This may mean increased inflation, rising unemployment, supply chain disruptions, and “some exporters” declaring bankruptcy. This makes the central bank's core function — trying to predict economic trends and adjust policies and loan interest rates accordingly — “virtually useless,” he said. Despite this, Macklem proposed two scenarios. The first scenario is that “most of the new tariffs are eliminated through negotiations,” but economic growth will stagnate and then recover “moderately” in a still weak economic environment. “In the second scenario, we assume that the trade conflict continues for a long time, then the economic consequences will be severe... and the Canadian economy will fall into a year-long recession. Economic growth will gradually resume in 2026, but will remain weak in 2027, as US tariffs will permanently reduce Canada's potential output and reduce our standard of living.” Macklem added: These scenarios are just two of many possibilities.