Canada growth up but Trump tariffs starting to hurt
The nation has been shaken by the mercurial Republican billionaire's repeated tariff threats -- and his targeting of its automotive, steel and aluminum sectors in particular with 25 percent levies.
The protectionist policy has fractured longstanding relations between the two neighbors that had seen a progressive melding of their supply chains over decades.
The Canadian economy grew by 2.2 percent in the first three months of 2025, as exports surged to try to get ahead of the US tariffs, according to the national statistical agency.
Most analysts had expected only modest growth.
The rise was largely driven by exports and a buildup in business inventories mostly by wholesalers, said Statistics Canada.
But lower household spending in the quarter suggests the "domestic economy looked very frail," Desjardins analyst Royce Mendes said in a research note.
He noted the "boost in outbound shipments was the result of US buyers trying to get ahead of tariffs" imposed by Trump.
At the same time, domestic demand "stagnation points to a disappointing underlying growth rate relative to the already-tempered expectations," he said.
TD Economics senior economist Andrew Hencic agreed, saying: "The top line measure would suggest the Canadian economy continues to chug along at a decent clip, but digging beneath the surface suggests otherwise."
"Trade tensions and the uncertainty they heaped on the economy have started to show through on activity," he said, with consumers pulling back on spending.
Trump had announced -- then halted, pending negotiations -- several levies on Canadian imports into the United States, while Canada hit back with counter tariffs.
'Worrying signs'
Canada, whose economy is heavily reliant on trade, sends about 75 percent of its exports to its southern neighbor.
According to Statistics Canada, exports led by passenger vehicles and industrial machinery rose 1.6 percent in the first quarter of 2025.
Imports also increased in the first three months of the year.
Household spending, however, slowed 0.3 percent after rising in the last three months of 2024.
The GDP figure is the last economic indicator before Canada's central bank on Wednesday makes its next interest rate announcement.
That decision is going to be "a close call," commented Nathan Janzen of RBC Economics. He predicted the Bank of Canada would continue to hold its key lending rate steady.
The central bank in April paused a stream of recent rate cuts at 2.75 percent.
Janzen said the economy has shown itself to be "relatively resilient relative plunging consumer and business confidence."
But he acknowledged "worrying signs of softening" in the labor market, with tens of thousands of manufacturing jobs shed last month.
Preliminary estimates indicate the economy would expand only slightly in April at the start of the second quarter.
Hencic said this, combined with rising unemployment, suggests that "domestic demand has all but petered out."
But he added, "With the tailwinds from last year's rate reductions fading, the Bank of Canada should have room to deliver two more rate reductions this year and give the economy a bit more breathing room."
Prime Minister Mark Carney, elected at the end of April, promised to radically transform the Canadian economy, the world's ninth largest economy, by focusing particularly on internal trade and energy.
But he faces pressures to act quickly as several auto companies have already announced temporary production reductions in one of Canada's largest industrial sectors.
© 2025 AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
2 hours ago
- France 24
Canada, US warn of air quality hazards as Canadian fire smoke reaches Europe
Alerts were issued for parts of Canada and the neighboring United States warning of hazardous air quality. A water tanker air base was consumed by flames in Saskatchewan province, oil production has been disrupted in Alberta, and officials warned of worse to come with more communities threatened each day. "We have some challenging days ahead of us," Saskatchewan Premier Scott Moe told a news conference, adding that the number of evacuees could rise quickly. Every summer, Canada grapples with forest fires, but an early start to the wildfire season this year and the scale of the blazes -- over two million hectares (494,000 acres) burned -- is worrying. The provinces of Saskatchewan and Manitoba have been hardest hit. Both declared wildfire emergencies in recent days. "This has been a very difficult time for many Canadians," federal Emergency Management Minister Eleanor Olszewski told reporters in Ottawa. "This wildfire season has started off more quickly, and it's stronger, more intense," she said, adding that the Canadian military has deployed aircraft to evacuate remote towns in Manitoba and was ready to also assist Saskatchewan and Alberta with firefighting. Climate change has increased the impact of extreme weather events in Canada, which is still recovering from the apocalyptic summer of 2023 when 15 million hectares of forests were scorched. As of Tuesday, there were 208 active fires across Canada. Half of them were listed as out of control, according to the Canadian Interagency Forest Fire Centre. Many of the affected populations are Indigenous, and some small communities have burned to the ground. 'Very intense few weeks' Heavy smoke from the fires, meanwhile, has engulfed part of the continent, forcing residents of four Canadian provinces and the US states of Michigan, Minnesota, Nebraska and Wisconsin to limit outdoor activities. "Smoke is causing very poor air quality and reduced visibility," Environment Canada said in a statement. Wildfire smoke is comprised of gaseous pollutants such as carbon monoxide, along with water vapor and particle pollution, which can be particularly hazardous to health. Some of the worst smoke was in Alberta where three major oil sands producers -- Canadian Natural Resources, MEG Energy Corp, and Cenovus Energy -- this week evacuated workers and temporarily shut down hundreds of thousands of barrels of production per day. Huge plumes of smoke even reached Europe, the European Union's climate monitoring service said Tuesday. Due to their very high altitude, they do not pose an immediate health risk, according to the Copernicus Atmosphere Monitoring Service (CAMS), but are likely to result in hazy skies and reddish-orange sunsets. Additional plumes are expected to shade both continents in the coming days. "Central regions of Canada have experienced a very intense few weeks in terms of wildfire emissions," noted Mark Parrington, scientific director at CAMS. Canadian authorities have forecast a more intense fire season than usual in central and western Canada, due in particular to severe or extreme drought. "The significant reduction in snowpack in the spring led to early exposure of soil and vegetation, accelerating surface drying," explained University of Ottawa professor Hossein Bonakdari. "This early exposure acted as a silent amplifier, subtly setting the stage for extreme fires long before the first flame ignited," he said. Elsewhere, extensive forest fires have been raging in Russia's Far Eastern Federal District since early April, particularly east of Lake Baikal, generating carbon emissions of around 35 million tons, Copernicus reported.
LeMonde
3 hours ago
- LeMonde
Musk blasts Trump mega-bill, days after White House farewell
Tensions between allies Elon Musk and Donald Trump erupted Tuesday, June 3, as the world's richest man derided the president's key piece of economic legislation in a startling rupture just days after exiting a controversial job in the White House. Musk was lauded by the Republican leader as he left his advisory role atop Trump's "Department of Government Efficiency" last week, despite criticism over his failure to deliver on promises of a transformative program of spending cuts. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination," Musk posted on X as he followed its progress from the sidelines, in by far his most caustic remarks on Trump's agenda. "Shame on those who voted for it: you know you did wrong." It was not Musk's first comments on Trump's so-called "big, beautiful bill," which is set to add $3 trillion to US deficits over a 10-year horizon, despite deep cuts to health and food aid programs. But Musk's previous criticism was more restrained, with the Tesla and SpaceX magnate offering only that it undermined his cost-cutting efforts. On Tuesday, he said the bill, being considered by Congress, would burden "citizens with crushingly unsustainable debt." His post laid bare an increasingly tense relationship between the White House and Musk, who donated almost $300 million to Trump's 2024 election campaign. Yet the normally pugilistic Republican has pulled his punches, aware of his biggest backer's enormous influence over young, tech-savvy and historically apathetic voters – a key Trump constituency in 2024. "The president already knows where Elon Musk stood on this bill, it doesn't change his opinion," White House Press Secretary Karoline Leavitt told reporters in a rapid response to Musk's tweet. "This is one big, beautiful bill, and he's sticking to it." The spat came with House Republicans gearing up to pass legislation due from the White House later Tuesday that proposes to enshrine into law $9.4 billion of DOGE's cuts. House Speaker Mike Johnson called Musk's comments "disappointing," adding that he had talked his "good friend" through the bill during a 20-minute phone call on Monday, and that he "seemed to understand." 'Incredible service' As the world's richest person bowed out of his role as Trump's cost-cutter-in-chief, their relationship appeared on an even keel as the Republican hailed his fellow billionaire's "incredible service." Trump even insisted that Musk was "really not leaving" after a turbulent four months in which the South African-born tycoon cut tens of thousands of jobs, shuttered whole agencies and slashed foreign aid. Help us improve Le Monde in English Dear reader, We'd love to hear your thoughts on Le Monde in English! Take this quick survey to help us improve it for you. Take the survey DOGE – announced after Musk became a regular fixture on the campaign trail for Trump – led an ideologically driven rampage through the federal government, with its young "tech bros" slashing tens of thousands of jobs. But its achievements fell far short of Musk's original boast that he could save $2 trillion, more than the government's entire discretionary spending budget for 2024. The DOGE website claims to have saved taxpayers less than a tenth of that total, just $175 billion, and fact-checkers even see that claim as dubious, given previous serious inaccuracies in its accounting. Senate Democrats released a report Tuesday itemizing 130 examples of "unethical or potentially corrupt" administration actions they say have helped Musk add $100 billion to his wealth during his tenure. The report came as senators began what is expected to be a fraught month of negotiations on Trump's mammoth policy package, expected to add between $2.5 trillion and $3.1 trillion to deficits over a decade. The White House says the legislation will spur robust economic growth to neutralize its potential to blow up America's already burgeoning debt pile, which has ballooned to $36.9 trillion. Trump said on Monday it was "the single biggest Spending Cut in History," although he added: "The only 'cutting' we will do is for Waste, Fraud, and Abuse."
AFP
3 hours ago
- AFP
Flyer does not prove assisted death legal for minors in Canada
"Looks like the Canadian gov't reccomends (sic) offering MAiD to our children," says the caption of a May 20, 2025 video shared on Facebook. "Unbelievable! They have to be stopped!" The clip, viewed more than 35,000 times, includes images of what appears to be a brochure discussing a recommendation from Canadian lawmakers to expand assisted dying to mature minors. Similar claims citing the pamphlet as alleged proof of changes to MAID spread in online articles and on X, TikTok and Instagram. Image Screenshot of a Facebook post taken June 3, 2025 Image Screenshot of an Instagram post taken June 3, 2025 The posts gained traction as bills allowing assisted death are currently under debate in France and the United Kingdom. Canada first legalized MAID, intended for people with a "grievous and irremediable" medical condition, in 2016 (archived here). Different forms of euthanasia are also legal in other jurisdictions outside Canada. Initially, a person's natural death had to be "reasonably foreseeable" to be granted the procedure, but updates in 2021 opened eligibility to people whose deaths were not immediately imminent (archived here). False and misleading claims about MAID in Canada frequently surface online, often the program is being opened up to children. In 2023, a parliamentary committee did recommend that mature minors should be given the right to choose MAID. But as of June 3, 2025, people under 18 years old have never been eligible for the procedure in Canada. "The eligibility criteria set out in the Criminal Code require that a person must be a minimum of 18 years of age and capable of making decisions with respect to their health," said Mark Johnson, spokesman for Health Canada. "The Government of Canada is not considering any legislative changes to this requirement that minors cannot be assessed for nor receive MAID." Additionally, a reverse image search reveals that the pamphlet highlighted online was printed by the Evangelical Fellowship of Canada in 2024, as part of a push to discourage the expansion of access to the procedure (archived here). It did not come from the Canadian government, as the posts imply. Studies and recommendations A Special Joint Committee on Medical Assistance in Dying studied issues related to MAID between 2021 and 2023 (archived here). During this time, individuals, experts and advocacy groups presented their points of view on what could be changed in Canada's approach to assisted death. Following the testimonies, the committee recommended that mature minors should be eligible to access MAID with safeguards in place, including restrictions limiting requests for people under 18 years old to only those whose deaths were reasonably foreseeable (archived here). The government responded to the recommendation with concerns about balancing minors' personal autonomy with safety, and it did not include any provision allowing medically assisted death for people under 18 (archived here). "This could only happen if legislation was introduced and passed to change the Criminal Code," said Alisha Hall, spokeswoman for Dying With Dignity Canada, a group that advocates for mature minors to be allowed the right to choose MAID. Hall told AFP that since Dying With Dignity's report to the committee in 2022, it had not made any further presentations to government bodies on MAID and mature minors (archived here). Eligibility While some of the posts referencing the pamphlet also implied that MAID could be used by those dissatisfied with life, Canada requires an applicant to have a "grievous and irremediable" medical condition. According to the Justice Canada website, MAID applications need to be approved by at least two medical professionals, and information must be provided about how to withdraw a request (archived here). The ministry also says people applying for the procedure who do not have reasonably foreseeable deaths must be informed about alternative options of treatment. The latest annual report on MAID recorded that 95.9 percent of people who received the procedure in 2023 did so while their deaths were reasonably foreseeable, with cancer being the most frequently cited underlying condition (archived here). Those whose deaths were not foreseeable reported living with issues such as diabetes, frailty, autoimmune problems and chronic pain, according to the report. Some argue the availability of the procedure can leave other issues unaddressed, including those surrounding quality of life for people living with disability or in poverty. Media have previously reported on applicants seeking medically assisted death for social reasons including isolation, and practitioners struggling with requests for MAID from people living with disabilities or difficult economic situations. Offering MAID as an option for people suffering solely from a mental illness was slated to go into effect in 2024, but this change was postponed until at least March 2027 (archived here). Read more of AFP's reporting on misinformation in Canada here.
