Deloitte Canada has reduced its 2026 GDP growth projection by 20%, citing escalating uncertainty from the Iran conflict and strained U.S.-Canada trade relations.
The revised forecast now expects 1.2% growth, down from the earlier estimate of 1.5%. Chief economist Dawn Desjardins attributed the weaker outlook to surging energy prices and regional instability disrupting global oil supplies.
Canadian consumers and businesses face mounting pressure from rising fuel costs, which are driving up supply chain expenses and dampening investment. The national average gasoline price has climbed above $1.80 per litre.
Desjardins emphasized that continued military action and unresolved trade issues with the U.S. pose risks to economic recovery. Labour markets remain soft, especially in manufacturing, while healthcare sees job gains.
Exports show signs of rebounding, but housing starts are expected to fall to 243,000 units in 2026, weighed down by high construction costs and low buyer confidence.
Looking ahead, Desjardins remains optimistic about 2027, anticipating renewed business investment and government infrastructure spending could boost growth.
