OTTAWA – A pair of reports from the Bank of Canada pointed to declining business and consumer sentiment in the first quarter as the uncertainty over U.S. tariffs took their toll.
The central bank’s business outlook survey said 32 per cent of firms are now planning with the assumption that a recession will occur in Canada over the coming year, up from 15 per cent over the past two quarters.
The reading came as a smaller proportion of businesses expected sales growth to improve over the coming year, while plans for investment in machine equipment declined.
Meanwhile, the Canadian survey of consumer expectations said concerns about job security increased because of the trade conflict. The report also said that for the first time since the first half of 2024, there was an increase in the share of consumers who said they are reducing or planning to reduce their overall spending.
The reports come ahead of the Bank of Canada’s next interest rate decision and monetary policy report set for April 16.
The surveys were done before U.S. President Donald Trump’s so-called reciprocal tariff announcement last week that prompted increased fears of a global recession and a plunge on stock markets around the world.
This report by The Canadian Press was first published April 7, 2025.
