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Yahoo
28-05-2025
- Business
- Yahoo
These eight data points show how Trump's trade war is already affecting the Canadian economy
U.S. President Donald Trump's trade war has many economists predicting a recession for the Canadian economy this year, leading to unprecedented uncertainty for businesses and consumers. While the launch of Trump's tariffs has been haphazard, with delays, exceptions and backtracking galore, the signs that they are having an effect on the Canadian economy are already starting to roll in. Here are eight areas where the data is already showing the impact. The Canadian manufacturing sector lost 31,000 jobs in April and the unemployment rate climbed to 6.9 per cent, the highest it's been since November as uncertainty brought on by the tariffs has slowed hiring. Brendon Bernard, an economist with Indeed Canada, said last month's jobs data was the first real sign of a tariff impact, with job postings in the manufacturing sector down by 6.6 per cent since January. 'We also see when we look across regions, some of the areas that are bit more trade exposed to the U.S., have also seen weaker job postings than others,' said Bernard. 'For example, we see a noticeable drop in job postings in Windsor.' Another city that has showed declines is Saint John, N.B., which also relies more on trade with the U.S. Despite the uptick in unemployment, layoffs for April were up only slightly over last year, suggesting that while companies may be pulling back on hiring, they are taking a wait-and-see approach before making cuts. Bernard said overall job postings have also held up well, declining just 1.8 per cent since early February. A forecast released by Oxford economics recently projected that the Canadian economy will lose 120,000 jobs this year and the unemployment rate will climb to 7.4 per cent. Rising prices at the grocery store were one of the first expected signs of the trade war, but it turns out shoppers were not seeing the full impact. That's because retailers had pre-tariff inventory on hand. Now that we are a few months in, it looks like that reprieve may be coming to an end. Earlier in May, Loblaw Ltd. chief executive Per Bank warned that shoppers at the company's stores would 'be facing a large wave of tariff-related increases in the weeks ahead,' as inventories rolled off. Bank used a photo of orange juice in his LinkedIn post as an example, as U.S.-made orange juice is currently subject to the federal government's retaliatory tariffs on U.S. goods. Canadian consumers paid more for groceries in April, with the price of food purchased in stores increasing by 3.8 per cent year over year, compared to 3.2 per cent in March. Price increases for food purchased in stores have outpaced the all-items CPI for three consecutive months, according to Statistics Canada. University of Guelph professor Michael von Massow said that headline acceleration takes into account other factors besides tariffs, such as drought and seasonal issues, but that when it comes to orange juice, coffee and packaged food products, tariffs are driving up costs. On April 15, in response to concerns from the food industry in Canada, Finance Minister François-Philippe Champagne announced a six-month tariff exemption for U.S. imported goods used in food packaging, including cans and bottles. But other U.S. tariffs are still having an impact on the food supply chain. 'The problem is the U.S. has put tariffs on our aluminum and steel, so the U.S. tariffs are going to increase the cost of the cans that we import, even though they're not subject to tariffs in Canada,' said von Massow. 'So we are going to start seeing those impacts, but we haven't to a significant degree yet, because we burned through inventory.' A weaker Canadian dollar is also increasing the cost of food imports, von Massow said. Normally springtime in Canada means an increase in real estate activity across markets, but so far this year sales have been sluggish. Despite falling interest rates, a report released by the Canadian Real Estate Association (CREA) earlier this month showed actual home sales were down 9.8 per cent year over year in April. Concern that the trade war could trigger a recession has pushed potential homebuyers to the sidelines, according to CREA, likening the activity to the levels seen in 2022 when interest rates were high. A recent Bank of Montreal survey showed nearly three quarters of those considering buying a home have hit pause due to recession concerns. The most expensive markets are experiencing more challenges than others, with Toronto home sales plunging 23 per cent in April compared to a year ago and Vancouver down 23.6 per cent. 'Rising inventories have shifted market dynamics decisively in buyers' favour throughout Ontario and B.C., creating some of the most buyer-friendly conditions in decades,' said Robert Hogue, economist with the Royal Bank of Canada, in a note. Hogue added a correction could be underway in the Toronto market and in surrounding cities like London, Kitchener-Waterloo, Niagara and Hamilton. But not all regions are equal, with Montreal, Quebec City, Winnipeg, Edmonton and Fredericton faring better in resale activity. Hogue said the full impact of trade tensions on buyer sentiment 'may be peaking' with national home resales declining just 0.1 per cent between March and April, following a cumulative decline of 19 per cent over the previous four months. Businesses have hit pause on their investment plans as confidence has taken a hit amid the trade war uncertainty. A Bank of Canada survey on the Canadian business outlook, based on interviews conducted in February, said 22 per cent of firms were postponing their investment plans. 'What we hear talking to businesses is they're really pausing their investment, they're really waiting for more clarity on the way forward,' said Bank of Canada governor Tiff Macklem, during the closing press conference at the G7 finance ministers and central bank governors' meeting on May 22. Investment is key to addressing Canada's poor productivity levels, which lag its OECD counterparts, but a recent KPMG survey released this month found six in 10 Canadian business leaders can't move forward with investment plans due to the current economic climate. High-profile examples of this pullback are apparent in the Canadian auto sector. Dodge chief executive announced in May that it would be postponing the production of its Dodge Charger EV at the Stellantis Windsor plant, while the company assesses the impact of U.S. tariffs. Honda also made headlines earlier this month when it announced a delay to its $15-billion investment to build an electric vehicle and battery plant in Alliston, Ont. Although other factors are at play in the industry, particularly the slowdown in demand for EV vehicles, Trump's insistence on repatriating auto production is playing a role. The flow of Canadian goods showed signs of changing even before Trump introduced his first tariffs, as U.S. importers started to pull forward inventory in anticipation of trade disruption. In December, Canadian exports to the U.S. increased by five per cent compared to November, driven by exports of energy products and precious metals, according to Statistics Canada. In January, the month of Trump's inauguration, U.S.-bound Canadian exports increased by 7.5 per cent compared to the previous month, a record-high. In March, this front-loading came to an end, with Canadian exports to the U.S. declining by 6.6 per cent compared to the month before. Meanwhile, exports to other countries besides the United States increased by 24.8 per cent. While it is not possible for Canada to completely replace the U.S. as its number one trading partner, Canadian businesses are showing interest in diversifying exports to other markets. That same month, Export Development Canada launched a $5-billion program to help companies find new markets and Prime Minister Mark Carney has made trade diversification one of his government's key priorities in combatting U.S. tariffs. While economists say it's too early to say whether March's data is part of a larger trend, tariffs are definitely having an impact on Canadian trade flows. No country has been a bigger target of Trump's trade ire than China, and that is having an impact on Canada, too. The U.S.-China trade spat has pushed China to become one of the top customers for Canadian oil. In mid-April, following Trump's trade escalation with China, the Asian country decreased its U.S. oil purchases by 90 per cent, according to Bloomberg. In the meantime, China has been importing more barrels from Canada through the Trans Mountain Expansion pipeline. The TMX, which came online last year, has enabled Canada to export more Canadian crude oil to Asian markets. Though China's appetite for Canadian crude began to increase when the TMX was completed, Trump's trade war has led to an even bigger surge in demand. Calculations by the China Institute at the University of Alberta estimated that China imported a record 353,674 barrels per day of TMX oil in March 2025, up from below 250,000 barrels in January. Canadian oil exports to the U.S. also hit a two year low in March of 3.1 million bpd, the analysis found. Trump's global tariffs and OPEC's increase in production, have also had an impact on the global oil market. The combination of these two factors has sent oil prices down to four-year lows this month. The trade war with the U.S. has many Canadians rethinking their holiday plans south of the border. Preliminary data from Statistics Canada showed the number of Canadian resident return trips by air from the U.S. declined by 19.9 per cent in April, compared to the year before. Meanwhile return trips from overseas increased by 1.3 million or 9.9 per cent. During the same month, Canadian resident return trips by car from the U.S. fell even further, by 35.2 per cent year over year Americans are beginning to take notice. California state tourism in partnership with Expedia launched an ad campaign this month called 'California loves Canada' and offered a 25 per-cent discount on hotel stays to win back Canadian tourists. The U.S. Federal Reserve's April beige book, meanwhile, noted that communities in the U.S. are already experiencing the negative financial impact of fewer Canadian travellers. 'A North Dakota retailer saw a 'deep impact' starting in mid-February, pushing first-quarter revenues down seven per cent,' the report said. The number of American visitors to Canada has also declined notably. U.S. resident return trips from Canada by auto fell by 10.7 per cent in April from the same month in 2024. With economists forecasting that Canada could enter a recession in the second quarter, the fiscal picture is darkening for all levels of government in Canada. When the federal government last tabled its fall economic statement in December, the federal deficit was projected to be $42.2 billion for 2025-2026. But the Liberal Party's costed election platform, which promised $130 billion net new spending over the next four years, puts the deficit at a steeper $62.3 billion. Carney will not table a spring budget but economists have criticized the platform for not including the trade war's impact on growth this year, which puts downward pressure on government revenues. Kevin Page, president and chief executive at the Institute of Fiscal Studies and Democracy, noted the deficit projections in the Liberal Party's platform do not consider the economic fallout of U.S. tariffs, using growth projections from the parliamentary budget officer that are rosier. 'Finance rules of thumb published in budgets indicate a one per cent downward adjustment to real GDP will increase the budgetary deficit by $5 billion,' Page said. 'This would suggest the baseline budgetary deficit from the trade conflict will be $10 to $15 billion higher in 2026-27 than the PBO pre-election baseline.' Tariffs causing rising uncertainty in Canadian businesses: StatCan How Canada and Mexico could grow trade amid U.S. tariff fallout Anticipated increases in deficit levels are also playing out at the provincial level, with Ontario's deficit for fiscal year 2025-2026 set to rise to $14.6 billion from a previously estimated $4.6 billion. Quebec tabled its budget in March, which showed the province's deficit is expected to grow to $13.6 billion in 2025-26, the largest in the province's history. This was in part due to the province setting up a contingency reserve fund to help with slower growth brought on by Trump's trade war. • Email: jgowling@ Sign in to access your portfolio
Time of India
16-05-2025
- Business
- Time of India
Weeks after Mark Carney's win, Canada's economy appears in crisis; job data at its lowest almost in years
Newly elected Prime Minister Mark Carney is confronting a significant economic downturn as Canada's labor market shows alarming signs of deterioration, particularly impacting recent graduates. Fresh data reveals a concerning trend of rapidly rising unemployment and sluggish job creation, exacerbating existing economic vulnerabilities just months into Carney's tenure. In April 2025, Canada added a meager 7,400 jobs, a figure far below expectations and insufficient to keep pace with population growth, consequently pushing the national unemployment rate to 6.9%. However, the situation is considerably more severe for young Canadians entering the workforce. The unemployment rate for recent post-secondary graduates has surged to a troubling 11.2%, marking the highest rate at the beginning of a year in at least two decades, according to an analysis of Statistics Canada data by Brendon Bernard, a senior economist at Indeed Canada. This paints a stark and bleak picture for young Canadians attempting to launch their careers, gain financial independence, and secure their long-term financial futures. Indeed, sources like The Globe and Mail are reporting that the current labor market conditions represent the bleakest in decades for this demographic. Trump Tariffs and more: What is causing employment risis in Canada The delayed economic recovery, significantly hampered by external factors such as the ongoing trade disputes with the United States – involving substantial tariffs on key Canadian exports like steel, aluminum, and automobiles – has dashed earlier hopes for a swift rebound in the labor market following anticipated interest rate adjustments by the Bank of Canada. Economists are increasingly concerned that graduating during such a pronounced economic downturn could have enduring negative consequences on young individuals' career trajectories, potentially leading to prolonged periods of underemployment, slower income growth, and hindered career advancement. 'If the recovery is swift, people can regain momentum,' Bernard cautioned, 'But right now, it's unclear how long these conditions will persist, and the longer it takes, the greater the potential for lasting damage to their career prospects.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 2025 Top Trending local enterprise accounting software [Click Here] Esseps Learn More The financial ramifications of this employment crisis for young Canadians are substantial and long-lasting. Protracted delays in securing stable and meaningful employment directly impede their ability to initiate savings and investment early in their careers – a cornerstone of long-term financial security. Certified financial planner Desmond Nwaerondu of Sun Life in Calgary emphasizes the critical impact of delayed savings on retirement goals. He illustrates this with a compelling example: an individual who begins saving $200 per month at age 20 with a hypothetical 4% annual return would accumulate approximately $296,842 by age 65. In contrast, someone who delays saving until age 30, with the same monthly contribution and return, would amass only $180,642 – a difference of over $116,000 due to just a decade of delayed action. This highlights the power of compounding and the significant disadvantage faced by young individuals who are unable to start saving early due to unemployment or underemployment. What job seekers in Canada need to do Despite the challenging economic landscape, experts offer guidance for young job seekers striving to navigate this difficult market. Chris Raper, a portfolio manager at Aspira Wealth (Raymond James Ltd.), advises adopting a pragmatic approach by gaining any form of work experience available, even if it falls outside their immediate field of interest. He argues that these roles, such as camp counseling or positions in the hospitality industry, can be invaluable in developing essential soft skills that are highly valued by employers across various sectors. Furthermore, Raper underscores the growing importance of acquiring high-demand technical skills, particularly in areas like Artificial Intelligence (AI), suggesting the utilization of readily available free online resources such as YouTube for self-directed learning. Networking is also identified as a critical strategy, with professionals recommending active engagement on platforms like LinkedIn and attendance at relevant industry events to build connections and uncover potential opportunities. 'You need to get in front of the people working in the industry you want to join,' Raper advises. From a financial perspective, advisors strongly recommend that unemployed young individuals exercise caution in accumulating debt, especially high-interest credit card debt, which can create a significant financial burden as they attempt to establish their careers. Once employment is secured, prioritizing savings from the outset is crucial. Nwaerondu advocates for the 'pay yourself first' approach, which involves automatically allocating a portion of each paycheck to savings or investment accounts before any discretionary spending occurs. The emotional toll of the prolonged job search should not be underestimated. Individuals like Ms. Lashley, whose experience was referenced in the original article, highlight the demoralizing effects of repeated rejections. However, experts like Raper emphasize the importance of resilience and maintaining a long-term perspective, asserting that 'Every rejection brings you one step closer to the right opportunity.' Grim Economic Outlook The broader economic outlook for Canada under Prime Minister Carney's leadership appears increasingly precarious. The combination of high unemployment, particularly among young people, and sluggish overall job growth raises serious concerns about potential economic stagnation. The ongoing trade tensions with the US, manifested in tariffs on key Canadian exports, further exacerbate these challenges by negatively impacting crucial sectors of the Canadian economy. Statistics Canada data indicating that approximately 1.6 million Canadians are currently unemployed underscores the significant strain on the national labor market. The net addition of only 7,400 jobs in April, following a loss of 32,600 jobs in March, highlights the volatile and uneven nature of the current economic recovery, further amplifying anxieties about Canada's economic stability in the face of persistent trade headwinds and a weakening labor market. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Globe and Mail
15-05-2025
- Business
- Globe and Mail
The summer job market is getting trounced
Young Canadians have suffered the most in a weakening labour market – and the outlook doesn't look great, either. As of early May, summer job postings on Indeed Canada were down 22 per cent from last year, according to a new report from the job-search site. The decline is being driven by summer camp roles, which have tumbled by 32 per cent. As part of its analysis, Indeed tallied job postings with 'summer' (or in French, 'été') in the title, which included everything from camp counsellors to lifeguards and painters. Summer job postings typically peak from mid-April to mid-May, so the weak trend this year bodes poorly for the warmer months to come. 'The dip in job postings comes at a time when growth in youth employment has fallen far short of rapid population growth over the past two years, suggesting 2025 could be another difficult summer for seasonal job seekers,' wrote senior economist Brendon Bernard in the report. The youth unemployment rate (for those aged 15 to 24) hit 14.1 per cent in April, steadily rising from a low of 9 per cent in the summer of 2022. Higher interest rates, meant to curb inflation, have weighed on economic growth and job creation, while strong immigration has led to an influx of job seekers. Now, the U.S.-driven trade war is forcing some families to tighten their budgets and companies to scale back their hiring plans. 'With other risks to the Canadian labour market looming, there are few signs of near-term turnaround amid what's already a troubled job market for youth,' Mr. Bernard wrote. Decoder is a weekly feature that unpacks an important economic chart.
Economic Times
15-05-2025
- Business
- Economic Times
Bad news for Mark Carney: Canada's job market is so weak that candidates aren't getting offers even after sending out 50 applications
Synopsis Canada's young workers are facing a challenging job market, with postsecondary graduates experiencing an unemployment rate of 11.2% in early 2025, the highest in over two decades. Emmersen Lashley's experience of submitting numerous applications without success reflects this struggle. Economists warn that this economic downturn could have long-term financial consequences, impacting savings and career growth for young Canadians. Canada's young workers are confronting the worst job market in decades and for most, that means submitting dozens of resumes and hearing back from none. ADVERTISEMENT Emmersen Lashley, a 19-year-old political science major at Queen's University, has sent out over 90 applications in the last two summers, with 50 applications last summer and 40 applications this year, as per the Globe and Mail. She's looked outside of her industry, applying to movie theaters, grocery stores, and anything that could possibly provide regular pay, however not even a single offer has been made yet. She said, 'I need to start saving, but I can't start because I can't find a job,' quoted the Globe and Mail. The absence of income isn't only postponing short-term objectives such as summer savings, it's causing her to worry about her long-term goals like establishing a secure career after graduation, home ownership and other things she had planned. ALSO READ: Working 7 days a week comes with solid perks: Nvidia executives earn millions - here's how much CEO Jensen Huang pocketsLashley is not the only one, Canadian youths are having a hard time finding their place in the job market. According to Statistics Canada data analyzed by Indeed Canada, the unemployment rate for recent postsecondary graduates younger than 25 reached 11.2% in the first quarter of 2025, as per the Globe and Mail. That's the worst year-to-date jobless rate for this age group in over 20 years, apart from the pandemic year, according to the report.A senior economist at Indeed Canada, Brendon Bernard, attributed the high unemployment rate to economic headwinds, including Canada-US trade tensions that have made it very hard for young people to get a job, as per the report. Bernard also pointed out that graduating into a weak economy can have long-term consequences and can slow early career momentum and income growth, reported the Globe and Mail. ADVERTISEMENT ALSO READ: Elon Musk meltdown? Billionaire goes ballistic at Grok, the chatbot he created, fuels speculation about internal chaos at X and xAIA certified financial planner at Sun Life, Desmond Nwaerondu highlighted that 'Time out of the work force is going to be crucial in terms of how much they can save, or they'll have to save more in their later years once they start working in order to reach the same retirement goals had they started now," as quoted in the report. ADVERTISEMENT What are the long-term risks of not working now?Missing out on job experience, savings, and resume-building can delay career growth and financial goals like home ownership. Can this delay retirement savings? Yes. If you miss saving in your early 20s, you'll need to save significantly more later to make up for lost time. (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates. NEXT STORY
Time of India
15-05-2025
- Business
- Time of India
Bad news for Mark Carney: Canada's job market is so weak that candidates aren't getting offers even after sending out 50 applications
Multiple Applications, Zero Job Offers Canada's Young Workers Face the Worst Job Market in Two Decades Live Events Economic Headwinds Hit Youth Hard Long-Term Financial Toll FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Canada's young workers are confronting the worst job market in decades and for most, that means submitting dozens of resumes and hearing back from Lashley, a 19-year-old political science major at Queen's University, has sent out over 90 applications in the last two summers, with 50 applications last summer and 40 applications this year, as per the Globe and Mail. She's looked outside of her industry, applying to movie theaters, grocery stores, and anything that could possibly provide regular pay, however not even a single offer has been made said, 'I need to start saving, but I can't start because I can't find a job,' quoted the Globe and Mail. The absence of income isn't only postponing short-term objectives such as summer savings, it's causing her to worry about her long-term goals like establishing a secure career after graduation, home ownership and other things she had READ: Working 7 days a week comes with solid perks: Nvidia executives earn millions - here's how much CEO Jensen Huang pockets Lashley is not the only one, Canadian youths are having a hard time finding their place in the job market. According to Statistics Canada data analyzed by Indeed Canada, the unemployment rate for recent postsecondary graduates younger than 25 reached 11.2% in the first quarter of 2025, as per the Globe and Mail. That's the worst year-to-date jobless rate for this age group in over 20 years, apart from the pandemic year, according to the report.A senior economist at Indeed Canada, Brendon Bernard, attributed the high unemployment rate to economic headwinds, including Canada-US trade tensions that have made it very hard for young people to get a job, as per the report. Bernard also pointed out that graduating into a weak economy can have long-term consequences and can slow early career momentum and income growth, reported the Globe and READ: Elon Musk meltdown? Billionaire goes ballistic at Grok, the chatbot he created, fuels speculation about internal chaos at X and xAI A certified financial planner at Sun Life, Desmond Nwaerondu highlighted that 'Time out of the work force is going to be crucial in terms of how much they can save, or they'll have to save more in their later years once they start working in order to reach the same retirement goals had they started now," as quoted in the out on job experience, savings, and resume-building can delay career growth and financial goals like home If you miss saving in your early 20s, you'll need to save significantly more later to make up for lost time.
