The big picture: Deloitte predicts a significant slowdown in Canadian economic activity into 2027, primarily driven by escalating U.S. trade tensions and high energy prices.

Why it matters: This economic deceleration could impact business investment and consumer spending, directly affecting talent acquisition strategies, workforce planning, and overall labor market stability for staffing and HR leaders.

Between the lines:

• Deloitte revised Canada's 2026 GDP forecast up slightly to 0.9% but anticipates a sharp weakening in exports by Q3 2026.
• New U.S. tariffs on Canadian imports are a major factor, leading to a 0.4 percentage point cut from the 2027 GDP forecast.
• Business non-residential investment is identified as a key weak spot, despite expected increases in 2026 and 2027 due to policy changes.

Staffing & HR impact: A slowing economy may lead to reduced hiring, increased competition for available roles, and potential pressure on staffing firm margins. HR departments may need to adjust workforce strategies to navigate a more cautious investment climate.

The bottom line: Watch for how Canadian businesses adapt to new trade realities and how government policies stimulate investment to counter the economic headwinds.